Artnet : A Hedge-Fund Manager Whose Company Sold a Fake Frans Hals at Auction Is

A Hedge-Fund Manager Whose Company Sold a Fake Frans Hals at Auction Is Appealing a Court Order to Return $6 Million to Sotheby’s
A case linked to a high-profile Old Master forgery ring is back in court.


The investment company Fairlight Art Ventures is appealing a December court ruling ordering that it reimburse Sotheby’s $6 million after the auction house sold on its behalf a Frans Hals painting now believed to be a forgery.

The once-purported Old Master canvas is one of a number of works purchased from French art dealer and collector Giuliano Ruffini that were exposed as likely fakes in 2016. The alleged forgery ring is linked to sales of as much as €200 million ($255 million) in suspect works.

Fairlight Art Ventures, owned by US hedge fund manager and art collector David Kowitz, teamed up with London art dealer Mark Weiss to buy what they believed was an authentic Hals from Ruffini in 2010. They then sold the work at Sotheby’s for $11.75 million to American collector Richard Hedreen in a 2011 private sale.

In last week’s appeal, Fairlight’s lawyer, James Collins, argued that there was no contractual relationship between Fairlight and Sotheby’s, according to the Art Newspaper. The auction house acted merely as a “sub-agent” for Mark Weiss, he said in court. (Collins declined to comment on pending litigation.) During the hearing, a lawyer for Sotheby’s countered that Fairlight gave Weiss full authority “to enter the contract,” and the three were “partners in the project.”

When the alarm was sounded about works linked to Ruffini five years after the sale, when police seized a painting by Lucas Cranach the Elder from a French exhibition, forgery expert James Martin of Orion Analytical, a scientific analysis firm later acquired by Sotheby’s, conducted testing on the Hals. He determined it was “undoubtedly a forgery.” That prompted the auction house to issue Hedreen a refund.

But Weiss and Fairlight initially maintained their belief in the painting’s authenticity and refused to reimburse Sotheby’s for their proceeds from the sale. The auction house sued. Weiss agreed to pay Sotheby’s $4.2 million as part of a settlement.

In December, London’s High Court ruled in favor of Sotheby’s, ordering Fairlight to return the funds from the painting’s sale. A new decision is expected early next year.

Sotheby’s did not respond to inquiries from Artnet News, but told the Antiques Trade Gazette in June that “we are confident the Court of Appeal will uphold the First Instance Judgement which was entirely in Sotheby’s favor.”

The court’s initial ruling did not weigh in on the issue of the painting’s authenticity. At one point, the French government had issued an export ban on the work in an effort to acquire it for the Louvre in Paris. That deal fell through due to a lack of funds. Subsequently, Christie’s passed on brokering the painting’s sale due to a lack of satisfactory provenance and attribution for the work.

Criminal prosecution over the suspected forgeries hit a major roadblock in March when appeals courts in Italy rejected arrest warrants issued by Paris judge Aude Buresi for both Ruffini and Lino Frongia, the Italian painter suspected of having forged the works.

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

  • IQ -9.4%, API -8.4%, GAN -5.6%, SMMT -4.3%, SE -3.9%, SDC -3.8%, BEKE -2.4%, BIDU -2.1%, KSS -1.9%, HD -1.5%, SLP -1.4%

Other news:

  • GDRX -17% (Amazon announced two new pharmacy offerings)
  • WBA -11.8% (Amazon announced two new pharmacy offerings)
  • PLUG -10.8% (prices offering of 38 mln shares of common stock at $22.25 per share)
  • TREE -9.6% (prices offering of 2,955,984 shares of common stock by Selling Stockholder at $295.00 per share)
  • CVS -8.8% (Amazon announced two new pharmacy offerings)
  • PRAX -8.8% (provides update on PRAX-114 IND submission for the treatment of major depressive disorder)
  • BSX -6.4% (initiated a global, voluntary recall of all unused inventory of the LOTUS Edge Aortic Valve System due to complexities associated with the product delivery system)
  • ORA -6.3% (launched public common stock offering and filed mixed securities shelf offering)
  • PDD -5.2% (announced offerings of convertible senior notes and ADSs; filed offering prospectus)
  • GME -4.6% (stakeholder calls for strategic review, according to WSJ)
  • STAG -4.1% (prices offering of 8 mln shares of common stock for gross proceeds of $243.2 mln)
  • PLYA -3.8% (announced secondary offering of Ordinary Shares)
  • KDP -3.6% (Keurig Dr Pepper announces completion of sale and distribution for its largest shareholder; Mondelez International's (MDLZ) position reduced to strategically important level)
  • VRTV -3.5% (prices offering of 1.4 mln shares of common stock by selling shareholders at $18.50 per share)
  • JAMF -3.5% (launched follow-on public offering of common stock)
  • CAE -3.4% (announced stock offering and concurrent private placement; also acquired Flight Simulation Company)
  • KOD -1% (launched common stock offering)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

  • YY +8%, AQUA +1.4%, WMT +0.9%, GDS +0.7%

Other news:

  • LXRX +45.7% (reports SOLOIST and SCORED Phase 3 studies achieved their primary endpoints; Published in The New England Journal of Medicine)
  • TSLA +13% (to join S&P 500)
  • NEPT +10.5% (received over $100 mln in purchase orders)
  • PGRE +8.6% (rejected unsolicited Bow Street acquisition proposal)
  • SQNS +7.2% (filed for offerings)
  • AXTI +5.9% (initiated process toward IPO for Tongmei subsidiary in China)
  • RDHL +3.9% (second COVID-19 Candidate, RHB-107, cleared by FDA for Phase 2/3 study in symptomatic COVID-19 disease)
  • KRMD +3.8% (authorized $10 mln stock repurchase program)
  • COST +2.1% (declared $10/share special cash dividend)
  • BMY +1.9% (provided regulatory update for liso-cel BLA)
  • VRCA +1.6% (announces receipt of final FDA minutes following type A meeting regarding resubmission of the NDA for VP-102 in molluscum)
  • AVRO +1.1% (new positive clinical data and preclinical data, as well as expanded leading lysosomal disorder gene therapy pipeline)

>>> US Early premarket gappers


Early premarket gappers

  • Gapping up:
    • LXRX +56.6%, SQNS +15.8%, NEPT +13.6%, TSLA +12.4%, YY +8.8%, PGRE +8.6%, KRMD +6.2%, AXTI +4.5%, BMY +2.9%, COST +1.9%, FSR +0.7%, ADSK +0.5%
  • Gapping down:
    • SMMT -14.5%, PLUG -10.4%, IQ -9.9%, GDRX -9.7%, WBA -9.3%, API -8%, TREE -6.9%, CVS -6.5%, ORA -5.7%, PDD -5.2%, SDC -4.6%, KOD -4%, PLYA -3.8%, VRTV -3.5%, STAG -3.4%, CAE -3.4%, JAMF -3.2%, SE -3.2%, HD -3.1%, BSX -2.7%, BEKE -2.1%, BIDU -1.9%, SLP -1.4%

SCMP : China now has the nuclear strength to hit back at a first strike, former

China now has the nuclear strength to hit back at a first strike, former PLA colonel says
  • The military has built an ‘underground Great Wall’ of tunnels to hide and move its arsenal of ballistic missiles, Wang Xiangsui tells Moganshan forum
  • The defences add up to a credible ability to mount a second strike, resulting in a deterrent effect, he says

China has spent the last two decades building defences for its nuclear armoury on land and at sea, ensuring that the military can hit back at a nuclear attack and deter others from launching one, according a former Chinese senior colonel.
Wang Xiangsui, now a professor at Beihang University in Beijing, said these defences – which included a vast network of tunnels to transport and protect missiles – meant China’s security was guaranteed even in the worst scenario.
“Launching nuclear strikes on China has always been a military option for the US,” Wang told a closed-door meeting last month.
“But for this option they are facing increasing uncertainties due to our adjustment and changes in the past 20 years.”

He delivered the assessment at the four-day Moganshan forum to discuss domestic and international issues and China’s new five-year plan, but the transcript of his remarks was only made public on Wednesday.
Without specifying the source, Wang said some US assessments claimed that only one Chinese nuclear warhead would be able to survive a US first strike and reach American soil in a counter-attack.
He dismissed the claims as “clearly nonsense”.

He said China had taken a series of measures over the years to establish a credible “second-strike” capability to respond to a nuclear attack.
In addition to intercontinental ballistic missile tunnels, China had developed advanced missiles and expanded “bastion waters” in the South China and Yellow seas in which its ballistic missile submarines could operate safely.
“These have drawn a bottom line for China-US confrontation – that the confrontation is unlikely to become a massive invasion, which is an important basis [of calculation for both sides],” he said.

China has pledged “no first use” of nuclear weapons and is thought to have 200 or 300 nuclear warheads, a fraction of the 4,000 or so Russia and the US have each.
Its nuclear strategy depends on ensuring its nuclear forces can survive the first wave of an enemy strike.
State media reported in 2018 that the military had built an “underground Great Wall” of 5,000km (3,100 miles) of tunnels throughout the country to hide, move and launch its nuclear counterstrike forces. In the footage, ICBMs were shown being loaded on trucks and driven through the tunnels.
China also established a firm maritime nuclear capability in 2015 when its Type 094A ballistic missile nuclear submarines (SSBNs) were fitted with JL-2 missiles (SLBM) on patrols.
This added to the potential to hit back if land-based silos were taken out.
The PLA has one SSBN base in the South China Sea, where the waters are deeper and therefore safer for covert submarine operations; and two in the Yellow Sea, closer to the mainland United States for missiles sent over the north pole.
“[US spy planes] found our SSBNs in the South China Sea operating in trenches as deep as 3,000m and the artificial islands we built as an SLBM missile launch area,” said Wang, adding that the Yellow Sea was another bastion area.

The JL-2 has a range of 7,400km, and its successor, the JL-3, is estimated have a range of over 12,000km, putting the US well within reach from the Chinese coast.

The People’s Liberation Army has also developed its missile portfolio, creating the world’s first hypersonic glider missile the DF-17, which is fast enough to penetrate the US missile defence system, according to Wang.

He said that all these measures meant it was not possible for the US to launch a massive nuclear strike against China.
Also at the forum, Wang revealed for the first time that the PLA’s DF-26B and DF-21D “aircraft-carrier killer” missiles successfully hit a moving vessel in the South China Sea in a test in August, sending a warning to the US “not to take any military risks”.

FT : EasyJet posts £1.3bn loss and extends rescue loan

EasyJet posts £1.3bn loss and extends rescue loan
Flight schedule cut back as quiet Christmas expected

EasyJet has slumped to a £1.3bn loss annual loss, the first in its 25-year history as Covid-19 swept historic disruption through the aviation industry.

The low-cost airline on Tuesday said it only expected to fly a fifth of its normal schedule for the rest of this year, as it tried to keep losses to a minimum with demand for flying anticipated to be low even over the traditionally busy Christmas season.

EasyJet’s chief executive Johan Lundgren has long called for more government support to help airlines through the crisis.

On Tuesday, he announced that the carrier had agreed an extension to the repayment of a £600m UK government rescue loan to help it manage its finances through the winter season. The company will repay the loan in two stages in March and November, rather than in full in March.

EasyJet, which had already warned it was facing its first ever full-year loss, reported a £1.27bn pre-tax loss for the year to September, including £438m of non-recurring costs such as ineffective fuel hedges and costs related to a broad restructuring.

The company has built up reserves of £3.1bn to last it through the crisis, including the Bank of England loan and selling off its planes, which it has leased back.

The losses bring down the curtain on a grim earnings season for Europe’s largest airlines. A second wave of infections and new travel restrictions has extinguished hopes of a swift recovery following nine months of crisis.

Still, Mr Lundgren said two positive vaccine test results in 10 days have offered the industry some “welcome news”.

EasyJet’s shares have risen more than 40 per cent since Pfizer and Moderna announced successful test results for their coronavirus jabs, although they remain 45 per cent lower this year.