"I remember going out there with a friend. And we were amazed by this house," says Richard Polsky, author of the Art Market Guide. "We looked at each other. I said, 'I don't get it! We both work pretty hard, we're pretty good at this. But this guy's on a different level.' My friend said, 'For the first time in my life I feel depressed. Like a loser! How does this guy do this?' "

"I think he had a bit of a buying addiction," says David Tunkl, a private dealer in Los Angeles. "I don't think that he's a dishonest guy. And I don't think people in my business should too much take the high road. I think we have all been in a 'robbing Peter to pay Paul' situation at some point.

"He had his hands in so many things at once," Tunkl says, "that for me he lost the whole feeling of being an art dealer. He was a merchandiser."

"I would look at a painting and say, 'How much do you want for it?' And he'd say, 'Well, I paid three hundred. Give me a hundred and seventy-five,' " Polsky says. "It didn't add up!"

It did for some. Marc Richards had started Cohen trading stock options in New York in 1993. Soon he was an addict sitting with an old-fashioned electronic ticker watching where the stocks were at. "He used to talk to you and stare at that thing transfixed," says someone who knew him then.

"Three people bought that painting," dealer Paul Kantor said tartly of a Picasso he lent money for. In the end, did he feel sorry for his former protégé or angry? "Angry?" he retorted. "He stole $6 million from me."

"I met him at an opening," a broker says. "Do you know anything about trading options? Ten would be a lot. He told me that he bought a thousand." Which meant Cohen was risking hundreds of thousands of dollars a throw.

The broker took over Cohen's account but found him needy. "I literally would speak to him ten times a day," he says. "People in the firm would yell across the room 'Michel! Michel!' They thought Michel was my girlfriend."

"He was great! Fantastic!" says Damien Hirst, the British artist who had his first one-man show in Cohen's gallery in 1992. "Michel used to have, you know, one of these little boxes. Stocks and shares and things. He was absurd! While we were having breakfast in a café he lost a hundred thousand pounds.

"Tanya got really upset. She said, 'We could use that money to start my gallery. Money you just lost over coffee and breakfast,' " Hirst chortles. "Eggs over easy!"

The problem was that Cohen never mastered the game. "Michel just wasn't good at it," the broker said. "Options move very, very fast. It's a very, very narrow window. You have to be careful about giving advice. People in my firm were paranoid that this guy might sue you. It really wasn't a good trip."

Cohen took a breather from the market in the late nineties. "Up to the end of 1999, he always paid very sharply on time," Martin Muller says. But he told a dealer that in early 2000, he had gotten into commodities.

"He was dealing through a few different futures companies, and he had an account here. We had his money out," says Joe Murphy, CEO of Refco, which is the biggest trader in the world aside from the banks. "And he was trading."

"He came to us as a very high-net-worth individual," Murphy goes on. "He had plenty of money, and he opened an account to speculate in the futures markets. And he did okay for a while. The assumption was that it was always his money, of course."

What Murphy didn't know was that though Cohen always seemed liquid, much of the money was on a float from his art deals. "He needed cash," says an international dealer. "So if I gave him a million-dollar painting, he would first ask a million two. If no one responded, he would try to break even. Then he would sometimes sell it for $800,000. Everyone in the world will pay $800,000 for a painting that's worth a million."