Friday, 24 October 2014
Last updated 51 min ago
Apr 5 2013 | 10:27am ET
SAC Capital Advisors founder Steven Cohen moved this week to elaborate on his purchase of a famed Pablo Picasso painting for a record price.
Word last week of Cohen's acquisition of "Le Rêve," coupled with his purchase of a new $60 million home in the Hamptons, came in the wake of SAC's $616 million settlement of insider-trading charges, leading to criticism of his timing. But Cohen didn't buy the Picasso as the settlement was being negotiated or in its immediate aftermath, his art adviser said, but in early November, prior to the arrest of former SAC portfolio manager Mathew Martoma on insider-trading charges and the Securities and Exchange Commission's lawsuit against the firm.
"The timing was bad," Sandy Heller said. "We're correcting the chronology."
Also corrected is the purchase price: Reports last week said that Cohen had paid casino magnate Stephen Wynn $155 million for the canvas, which depicts Picasso's mistress masturbating. The price was actually $150 million, The New York Times reports.
It remains, however, the most ever paid by a U.S. collector for a painting.
Cohen has coveted the 1932 canvas for years. He had agreed to buy it from Wynn in 2006 for $139 million, but shortly after the deal was struck, Wynn, who suffers from an eye disease, put a silver-dollar-sized hole in the painting with his elbow while showing it off in his Las Vegas office. Following restoration, the painting appraised for only $85 million, apparently not enough for Wynn to part with the Picasso.
According to Heller, the deal last year came together quickly. A Manhattan art dealer called Cohen in late October to tell him that Wynn was ready to sell. "We were at the gallery the next morning," Heller said. "In three minutes, we had a deal."
Heller said the damage is not visible in any way.
"We had to step back, take a deep breath and see how the restoration would turn out," he said. "This is a painting that has haunted Steve for nearly a decade."
"When you stand in front of it, you're blown away," Cohen told the Times.
Cohen is not the first hedge fund manager facing legal trouble to own the painting. Wynn acquired it in 2001 from Wolfgang Flöttl of Ross Capital Markets. Seven years later, Flöttl was sentenced to 10 months in prison for misuse of an Austrian bank's funds.
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