Christie's Auction House, it turns out, had a rat.
Christopher Davidge, the CEO of the art auction house, took the only path he saw that would keep him out of jail. He went to the authorities.
At issue was a price-fixing scheme – a cartel – that had lasted for seven years and funneled untold millions from the pockets of rich art collectors to the accounts of the wealthy auction houses.
For decades, competition between Christie's and rival Sotheby's had been fierce, each vying for the best artwork to bolster its auctions and collect the most fees.
In 1993, Davidge and Sotheby's CEO Diana Brooks – along with the chairmen of the two companies, Anthony Tennant and A. Alfred Taubman – were tired of competing.
Instead, they held secret meetings to establish fixed fees.
When a customer sold a piece of art through the auction house, they'd pay a fee. And like anyone else, they preferred to pay as little as possible.
Instead of engaging in an endless price war, Christie's and Sotheby's formed a cartel to agree on an artificially elevated price. The scheme worked for seven years.
But it eventually broke down, as most cartels do. Not only is it illegal, but it's hard to keep up a price-fixing scheme. If the industry agrees to a set price, one participant can attract extra business and make a lot of extra money by just lowering its price a small amount. And before long, one of the cartel members will give in to temptation.
Or sometimes the scheme can attract the scrutiny of regulators... That's what happened to Christie's. Davidge was leaving the firm, and he decided he didn't want to carry the risk and guilt with him to his next job. The chairmen, Tennant and Taubman, had kept good records of their illegal activities – the best criminals do.
Davidge dumped it all into the lap of investigators in exchange for leniency. The businesses paid out half a billion dollars in civil settlements. Taubman and Brooks went to jail. And you can see what the scandal did to the companies' shares...
Despite the risks (and questionable ethics)... you can see the appeal of trying to set your prices. Most of the time, businesses must compete on quality and price. And except for a few businesses with strong brands or no competition, companies take what the market gives them.
This leads to a cyclical flow of high and low prices. When you can spot these cycles, they make for outstanding trades. If you can buy when supply is tight and prices are high, you position yourself to win.
There are a handful of industries that follow regular, recurring cycles of this competition.
The airline industry has traditionally been one of them. When the economy gets hot, people start traveling more and paying more for tickets. The airlines start chasing more dollars and expanding the number of flights they offer. Then, prices come crashing down.
Another cyclical industry is oil. When oil supplies are low, prices are high... And producers plow money into exploring and drilling. That process increases production and drives oil prices down. Everyone goes bust. The drilling party stops. Eventually, though, that lack of drilling leads to lower supply... And prices rise.
These businesses would love to find ways to smooth out these cycles. Oil, for one, has established an international pricing cartel known as OPEC. The managers of airlines have likewise promised investors that they'll be "disciplined" with their expansions, and they have been so far.
By understanding these cyclical moves, you can avoid getting the timing wrong on your investments...
And my team and I have created a way to help you. With my StockTracker system, you can get an inside line on what stocks and sectors will be the hottest over the next month, three months, and up to a year.
You can see what's in favor... what's out of favor... and what's next to outpace the rest of the market with a simple glance.
You can find the stocks that are bottoming... and those that are topping out after a big run... all with a peek at a chart.
It's a way to look at stocks that you've probably never seen before. And for many folks, it doesn't make any sense... at first.
But it can become one of the most intuitive technical indicators you use.
Last week, I went on camera to show how my StockTracker works. If you haven't seen my big reveal yet, make sure to check it out before it goes offline tomorrow.
What We're Reading (and Watching)...
- Something different: Hear the otherworldly sounds of skating on thin ice.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
July 20, 2026