An internal Sotheby's meeting invitation dated March 25, 2013 explained how Mr. Baltser's club would work:
The client [Mr. Baltser] would have members bid on his account. He could have members bidding against each other but under the same account, on different paddles. He would remain liable to Sotheby's for any bids his members provide—he would control that his end to effectively manage his risk . . . Mostly his members would pay him and he would pay us. His members may wish to be invoiced directly—in which case, if not already known to us, our KYC rules apply and they set up an account and we invoice directly—although in the event of non-payment he knows he can't "excuse himself". . . . We'd have/keep the veto—e.g. would not allow a transfer to a No Bid client.[1]
The Baltser Account Representative explained that Sotheby's invoiced Mr. Baltser directly and would divide his purchases into multiple invoices if he requested.[2] She asserted Mr. Baltser was the client: "That's how he bid and that's how he paid. As far as I'm concerned the client is Greg Baltser."[3] The Baltser Account Representative made clear that she could not register a bid for Mr. Baltser unless the payment would be coming from his company.[4] However, she also explained that Mr. Baltser "would almost never tell us on behalf of who he is bidding for."[5]
The Baltser Account Representative continued to advocate partnering with Mr. Baltser and forwarded several documents from Mr. Baltser to her colleagues regarding his club on May 31, 2013.[6] One of the documents noted that Mr. Baltser would "obtain all the necessary KYC/AML checks required."[7] The document also noted "one of the key components of the KYC/AML process implies checking the identity of every client and collecting personally identifiable information."[8] The Baltser Account Representative recalled there were extensive discussions internally at Sotheby's about Mr. Baltser performing the KYC checks on his own because Sotheby's wanted to know who his clients were for KYC purposes.[9] Sotheby's asked him to reveal the identity of his clients, which "obviously made him very uncomfortable as a dealer would never do this normally."[10] She explained that Mr. Baltser was reluctant to do this, but Sotheby's was unsure how it could satisfy itself
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