Diana Brooks is testifying against her former boss Alfred Taubman

Former chief executive Diana Brooks, who has admitted her guilt, is giving evidence against the former chairman of the company, Alfred Taubman.

She says that for much of the 1990s, the chairmen of the apparently rival auction houses had a secret deal to fix prices.

Mr Taubman denies knowing anything about the conspiracy against customers, who include some of the richest people in the world.

Sir Anthony Tennant, his opposite number at Christie's, also denies involvement, but has refused to leave Britain to appear in court.

Bottom line

Ms Brooks told the jury that her chairman said the two companies were "killing each other on the bottom line and that it was time to do something about it".

Mr Taubman could face up to three years in prison and a $350,000 fine

Asked why she had lied about the secret deal, she said she had been "involved in a conspiracy" with Mr Taubman, former Christie's chief executive Christopher Davidge and Sir Anthony.

"As a result, I didn't tell anyone."

Mr Taubman was indicted by a federal jury in New York in May along with Sir Anthony.

The charges against the two men relate to commission fees charged to customers of the world's biggest auction houses between 1993 and 1999.

If convicted, Mr Taubman, who is from Michigan, could face up to three years in prison and a $350,000 fine.

Secret pact alleged

Prosecutors allege the two chairmen breached American anti-trust laws and exploited their control of 90% of the world's art, jewellery and furniture sales by forming a secret pact to fix fees instead of undercutting each other's rates.

The US Government says sellers lost their main bargaining tool because of the scheme. Before the alleged conspiracy, the two auction houses primarily competed on the basis of the commission fees because they both provide substantially the same service.

Mr Taubman, who remains the controlling shareholder of Sotheby's, has maintained his innocence.

He resigned from his post when the federal investigation into possible price-fixing began last year.

Witnesses

His co-defendant Sir Anthony, a British citizen, cannot be extradited because there is no equivalent criminal offence in Britain.

The prosecution is also expected to call Mr Davidge, as a key witness.

Earlier this year, a US district judge threw out three lawsuits alleging that Christie's and Sotheby's had conspired to overcharge for auctions held outside the US.

The judge said that the US law which banned monopolisation of trade - known as the Sherman Act - could not be applied in this case.