The collection of teddy bears and soft toys belonging to Paul Greenwood, a hedge-fund manager who pleaded guilty to fraud charges, has sold at auction in London for 1.1 million pounds ($1.75 million.)
The total price includes fees and compares to a presale estimate, at hammer prices, of 800,000 pounds to 1.2 million pounds. The 10-hour auction of 1,300 items made by the German company Steiff was held by Christie’s International.
Paul Greenwood, the former general partner in WG Trading Co., was the seller, art dealers said. Christie’s does not publicly comment on the identities of consigners. Greenwood’s lawyer didn’t reply to e-mails asking for comment.
“It was encouraging to see some lots selling over their estimates,” Rebekah Kaufman, a Cambridge, Massachusetts,-based collector and blogger, said in an interview after attending the auction. “The market has been bad over the last two or three years. It’s been difficult for sellers, so it was good to see a truly outstanding collection come up for auction.”
Greenwood and Steve Walsh, his fellow manager of WG Trading and WG Investors, were indicted in July 2009 on charges that they conspired to defraud investors of $554 million. The U.S. said the scheme stretched from 1996 until their arrest in February 2009.
Greenwood told U.S. District Judge Miriam Cedarbaum in Manhattan on July 28 this year that he had surrendered his assets to the government, saying they would be auctioned off. Cedarbaum said Greenwood, who remains free on bond and is co-operating with the U.S. against co-defendant Walsh, may face as long as 85 years in prison and hundreds of millions of dollars in fines. She set a Dec. 1 sentencing date.
Christie’s sale included a Steiff “Harlequin” bear, dating from about 1925, featuring alternating halves of red and blue plush. Acquired in June 1999 at the German company’s annual auction of toys, it was “possibly unique.” It was estimated to fetch between 50,000 pounds and 80,000 pounds at hammer prices, said Christie’s. It sold to a bidder in the room for 46,850 pounds including the buyer’s premium.
A lace-up teddy bear with a hot-water bottle carried a high estimate of 30,000 pounds at the auction. Just 90 examples of the Hot-Water Bottle Bear were made by Steiff between 1907 and 1914, said Christie’s. It sold for 18,750 pounds including fees.
A 1953 black original teddy was another of the other successful bears, reaching 30,000 pounds against a high estimate of 20,000 pounds.
The collection was amassed over the last 15 years. More than 80 percent of the sale’s 641 lots were Steiff animals. One of a small number of samples of a never-manufactured Bonzo the Dog toy fetched 16,250 pounds, while a perfectly preserved Mickey and Minnie Mouse was among the 11 percent of failures. They had been expected to fetch as much as 20,000 pounds and 15,000 pounds respectively.
The hedge-fund manager bought from auctions and dealers that were able to offer rare and unique pieces by Steiff, the world’s oldest and most avidly collected manufacturer of soft toys.
The German maker, founded in 1880 near Ulm, created the “teddy” bear in 1902, following its adoption as a political mascot by President Theodore “Teddy” Roosevelt. Then, as now, Steiff toys are distinguished by the presence of a trademark metal stud in the ear.
Greenwood said on July 28, 2010, that he had taken in excess of $75 million from clients.
The U.S. Securities and Exchange Commission, in a release on July 29, said the money taken was used “to purchase multimillion dollar homes, a horse farm and horses, luxury cars, and rare collectibles such as Steiff teddy bears.”
Greenwood also settled civil claims brought by the SEC, agreed to refrain from violating securities laws and to pay yet-to-be determined disgorgement and penalties, the SEC said in the July statement.
Auctions for vintage teddy bears reached their zenith in December 1994 when a Japanese museum paid a record 110,000 pounds for a Steiff toy dating from about 1906 at Christie’s.
According to his plea agreement, Greenwood will have to forfeit at least $331 million to the government, representing the money he and Walsh obtained from their securities and wire fraud. Greenwood also agreed to pay the U.S. an $83.5 million judgment, the proceeds he “personally obtained” as a result of the fraud.
(Scott Reyburn writes about the art market for Muse, the arts and culture section of Bloomberg News. Opinions expressed are his own.)