PSA/SGC Waiting Lines At 2019 National

[bnorth]

Originally Posted by jhs5120

Personally, I do not agree. It doesn't take a minute to grade a 1980's common. For ~80% of PSA grades, it shouldn't take more than 20 seconds or so to authenticate and grade.

I agree, especially with the lower value bulk submissions.

This is just my opinion. I have been involved with a few bulk submissions. It is like they see a pile of cards and go those look like 8's and the pile is graded. This happened to me the last time I was involved with one. I got back cards that ranged from 6s to 10s all graded 8s. Luckily I found a buyer willing to buy the cards and not the grades on the ones that should have been 10s. I also disclosed the obvious crease in one of the 8s I sold to a fellow forum member.

[BobC]

Originally Posted by Peter_Spaeth

Yeah the way it's evolved it's somewhat chaotic on the Board but the events keep unfolding. But certainly the warranty is a big pressure point on Collectors Universe and obviously they have to review the adequacy of the reserve as do the auditors. Of course, since they control the ultimate decisions (short of litigation) as to whether to reimburse, that may play into their calculation. And they clearly, see Sloan's statement several weeks ago, are hoping to foist this onto the sellers.

Peter, agree completely. I know you're an attorney, but I'm a CPA and perform and issue audited statements and know what is involved and goes into the reporting and financials of these companies, and what the auditors are required and supposed to be doing. I wasn't merely trying to re-hash what had already been talked about and explained in numerous other threads, I was also trying to show and highlight issues as they specifically would be looked at and dealt with by an actual auditor. Apologies for not being so clear on that. That was why I was mentioning about how Collector's Universe's year-end is June 30, so the audited financials and Annual Report are going to be coming out pretty soon in the next few months. I am going to be extremely interested in seeing what, if anything, is reported or shown in their financials and Annual Report in regards to all these recent events. And those excerpts from CU's Annual Report I was posting were to highlight what was being said by the company itself, not someone else, and how they are supposed to be factual and accurate as part of their financials and Annual Report. And to whoever their auditor is, they would have to sign off and basically guarantee in writing to them that all their statements and everything they had been telling them as part of the audit and including in the Annual Report and all were factual and true, to the best of their knowledge, or they wouldn't be getting a clean and unqualified audit opinion from me if I was their auditor.

And if I were their auditor, I would be required to review their reserves for things such as warranty costs, and assess if they appear to have adequately reserved for it. If in my assessment they did not, I would discuss and suggest to them that they should change the reserve to what would appear to be a more appropriate number. And that assessment would stem from and be based on the warranty policy as stated by them that I had posted. And if they did not agree to change their reserve to what I felt was more appropriate, and the difference was egregious enough and material to the financial statements, I would be obligated to at least make mention of the difference in our report or footnotes, or even to issue an exception and a qualified opinion of the overall financial statements. And CU being a publicly traded company, exceptions and qualified opinions would likely not go over well with the investing community. And also being a publicly traded company, CU must conform and operate under the rules and requirements of the SEC, who look at financial statements and reporting in an extremely serious manner. An auditor of a publicly traded company would not want to sweep something under the rug that could later come out and get them blasted by the SEC and the public.

That warranty policy as stated by PSA/CU doesn't mention anything about them having to be taken to court and have litigation to force them to pay such warranty claim costs. It merely states that PSA is liable if a card previously graded by them is re-submitted to them, still in its original PSA holder, and is subsequently found and proven that it had been over graded incorrectly, or ended up not being authentic, that they would either offer to buy back the card from the current owner/customer at the value based on the incorrect grade, or AT THE CUSTOMER'S OPTION, not buy back the incorrectly graded card and instead pay the owner/customer the difference in value between the incorrect grade and what the card really should have been graded at. And I assume that means that if a card doctor had picked up say a PSA 4 version of a card and then altered and submitted it so that it now came back as a PSA 6, which was then later proven to have been altered/doctored when a subsequent owner resubmitted it to PSA looking for a grade bump, the true grade of that former PSA 4 card would/should now and forever after be no better than an "A", correct? And in that case, under their warranty policy, PSA would be liable to pay the owner/customer the difference in value between a PSA 6 version of that card and one that was just an "A" (authentic) version, and the customer/owner still keeps the card apparently, if the custoner/owner chooses that option. So if I was their auditor, I would have to use those parameters in looking at their warranty reserve calculation and determine if I felt it was adequate and reasonable given the known facts and circumstances.

Quite frankly, if I was PSA/CU's auditor, and knowing what I know about the whole thing, I would look at the warranty reserve calculation PSA did as of 6/30/19, along with their facts and calculations in how they came up with it, and start with the questions from there. Again, because of my knowledge of cards and the industry, I would be extremely critical of whatever reserve figure they came up with and be very demanding in knowing how they came up with and then justified it. Quite clearly to me, because the number of questionable cards in PSA holders already purported to be out there are being considered as maybe only the tip of the iceberg, there is no possible way to really and truly come up with an anywhere near complete list of what potential cards may be subject to the warranty. And couple that with the added difficulty of then having to decide what the potential values of those incorrectly graded cards are that PSA could be on the hook for, and there is no possible way currently to really come up with a good, reasonable and defensible figure as to that the reserve should be, at least not in my opinion. So as their auditor, I would probably end up telling them that I was going to at least explain how we arrived at whatever number we ended up using as the warranty reserve, and then be sure to add footnote disclosure to further explain the issue and the inability to determine an accurate, reasonable potential reserve with what information was currently available. I would also further explain that the warranty reserve costs could be significantly higher than reported in the current and future years, and have a serious material, negative impact on the business andc its financial statements going forward.

And trust me, the idea/concept of materiality is not simply a vague, unknown term or amount when it comes to audits. There are set and prescribed calculations and formulas that all auditors are supposed to follow in calculating materiality. In the case of PSA/CU, based on their 6/30/18 financial statements and total sales reported for that fiscal year, the entire company's planning materiality amount/level for that year was $498,694, which would/could then be rounded up or down slightly at the auditor's discretion. What that then means is that in looking at the financial statements of PSA/CU for that year as their auditor, if I ended up finding that I disagreed with amounts the company was reporting, and those differences netted to more than this materiality amount/level, I would have to go back to PSA/CU and tell them that they would either have to make some adjustments to their financial statement figures that I would propose to them to remove the differences, or if they did not agree to do so, I would have to at least have them disclose those material differences in the footnotes to the financial statements. And if they refused to even allow the footnote disclosure of the the material differences, I would most likely only issue them a qualified opinion and have to explain the material differences in my report then, or depending on how egregious the differences actually were, I could even possibly back out and refuse to issue an opinion because I didn't think an accurate opinion could then be given. And if you think that if I did back out as their auditor, or if they fired me as their auditor because I wouldn't go along with what they want, that they could simply go out and find and hire another accounting firm to agree with them and perform their audit and make the problem go away, that won't work. Any subsequent auditor of theirs is required to inquire of prior auditors and them as to why the change and what the issues were. And since they are publicly traded, the SEC also requires even further reporting and the filing of Form 8-K to explain the dismissal and change in auditors, and all the reasons and issues for doing so. In other words, the company being audited can't just hide the issues or try to sweep them under the rug. So from what I'm seeing, I expect there should be some interesting reporting on their upcoming financials.

And since the warranty guarantee appears to be triggered only when a PSA card is re-submitted to them in the same, original PSA holder it was in when originally misgraded, it more or less means that PSA gets to be the one, and only one, to decide if they actually misgraded the card to begin with. So has anyone already tried to re-submit one of these suspect cards in a PSA holder back to them yet? First off, with their ridiculous turn-around times (so I've heard) how long will it take someone to even get a response back. I imagine someone with a suspect card(s) could go to their offices along with scans and emails and all the documentation and evidence that has come forward and present it and the card(s) to them and say pay me. I'd love to be in the room to hear the response to that from a PSA official. And even with all the supposed evidence and scans you could present, what happens if they say they stand behind the grade and the card(s) presented is fine as graded and you are owed nothing by them, what recourse would you have then? Sue them in court to prove they are wrong, even though they are considered by many as the top card authentication and grading firm in the country? Most individuals wouldn't have the time nor resources to be able to go after them that way. And then think how that could impact the guilt and potential liability of the card doctor(s) or others involved in the sales of the altered/doctored cards. If someone went after a suspected card doctor(s) in court and the defense can pull in someone from PSA to say they back the grade they gave on cards the defendant supposedly doctored (remembering PSA is considered by many as the top, expert card grading firm in the country, if not the world), how would that possibly end up in court for the card doctor(s)? The problem is that even if there isn't true collusion and cooperation among the TPGS, dealers and card doctors in this whole thing, they all do share potential financial liability because of it. So it behooves them all to shut up and not admit to or say anything, and for the TPGs to continue saying the grades they gave certain cards are correct and they are not altered/doctored, which helps to maintain and preserve their reputation and keep them from being hit with financial liability under their own warranty guarantees. And that in turn provides protection for the dealers selling the bulk of these supposedly altered/doctored cards who can then just say that they didn't grade them and since the TPGs are standing behind the grades, that they didn;t do anything wrong either. And as for the card doctors, if the TPGs and dealers continue to keep saying the cards are good and the grades accurate, how can you accuse/convict them of anything if the recognized hobby industry experts keep saying the cards are good after all?

Now I've heard and read that PWCC has actually gone ahead and started to pay off/buy back/reimburse some people for alleged altered/doctored cards that they had sold them. But with all the allegations and finger point that has come out of this, they can easily argue they are doing so to maintain their reputation and business, without formally saying or proving that they knowingly sold cards that were altered/doctored and incorrectly graded by TPGs. In other words, they can assert it is merely a very lenient return policy they have on sales by them for unhappy customers. For PSA to start doing such payouts though, that would likely be considered by many in the hobby community as an admission by them that they had inaccurately graded and missed so many doctored/altered cards. So I can fully understand why they aren't out there offering to make payments to people for their alleged grading errors. And as for any of the card doctors themselves, good luck on getting anything should someone try knocking on one of their doors asking for a return of money!

Here's a thought on how to possibly make some money from all this then. Reach out to the people who currently own some of these alleged altered/doctored PSA graded cards and see if they would be willing to sell them to you, at a discount of course because of the taint their card now has. Then take the cards and go to PSA and resubmit and ask them to pay you for their erroneous grading. Depending on how much of a discount you may have gotten the card for originally, you could potentially make some decent money, if you can get PSA to actually admit they blew the original grading and slapped an improper grade on an altered/doctored card.

[swarmee]

JHS,
Sure, if you presume that nobody has ever learned how to replicate a rough cut for 1952 Topps Look-N-See cards or 1953 Parkhurst or 1955 Topps FB All-American.
But then you're proven wrong by Moser, who can easily fool PSA graders by applying a false rough cut to issues while trimming fractions of an inch off.

[Peter_Spaeth]

Bob, good discussion. I wonder how efficient the market is for CLCT stock, given that recent developments obviously could have a material impact on CU through the warranty and reserve, but also given that the stock price apparently has not been affected at all other than a brief response to what was probably just a short attack by Seeking Alpha. If one assumes an efficient market, then the market apparently doesn't perceive much risk. Then again, with CLCT being such a small cap company and so thinly traded, the market may not be efficient.

[swarmee]

Yeah, it's a wall of text, but most of those points have been made in the previous threads that have rolled off the board. You might want to read more threads that talk about PSA's grade guarantee and what we've already discussed.
Not to say it can't be rehashed, just that it you're going to pontificate about it, we've already done it.

I'm not hoping for PSA's demise; you can see that because I want them to offload their financial risk onto PWCC and Moser and their other alterers. But if PSA doesn't come out and PUBLICLY STATE that they were incapable of detecting alterations, and have created/proven new techniques to catch these cards from being submitted in the future, I don't see how their company has any more value than the Set Registry, which will wither and die when people stop submitting cards knowing that the whole enterprise is built on fraud. I WANT PSA TO REFORM. But without a significant attack on its warranty reserve or law enforcement intrusion into its business, I don't see PSA having this "Come To Jesus" experience.

I don't agree with the PSA Apologists on this board and others that think that the status quo will never change. It's been about 2 months since the first PSA "conserved" Mantle was outed. Have people forgotten about this yet? Have the blowout detective agency (BODA) stopped finding altered cards? Have people that are invested in the hobby stopped posting about this endemic fraud? No. And the National is coming up in a month. The word about this fraud will only spread from here on out.

[drcy]

I think PSA, PWCC and Moser should all go under. PSA can be the exception only if it can entirely reform and change.

I think the grading system/business is corrupt, and is, in big part, concerned, focused and invested in things other than, and counter to, objective grading and authentication. And if it is unable or uwilling to objectively grade and authenticate, then it shouldn't be in the business . . . And that statement doesn't even touch on if they are capable of grading and authenticating.

If they were intellectually honest they would say "We have to dissolve the PSA Registry, or at least attach a big fat disclaimer to it, because these numbers are obviously not reliable and almost certainly wrong." But honesty and accuracy clearly are not essential to their business model. If they were they would have admitted long ago that the T206 Gretzky Wagner is trimmed and misgraded long. Refusing to admit the Wagner is altered and misgraded is akin to a scientific "authority" refusing to admit the earth rotates around the sun and materials are made up of atoms and molecules ("And we should trust your statements on other scientific topics why?"). And that right there is the problem.

Whether they will, or 'should' as some collectors might say, reform and change is a separate matter. Many collectors and dealers are fine with the old corrupt, and perhaps inept, grading system and want it to continue, because they also are focused and invested things other than, and counter to, objective grading and authentication. Many are literally invested in the system.

Now if PSA wishes to wholesale reform their system and model, then that would be a reasonable response I could subscribe to and support. But that would require a wholesale reform and change in philosophy. To use Thomas Kuhn's once radical and now cliched and misused terminology, it would require a paradigm change.

David Cycleback

[barrysloate]

Originally Posted by drcy

I think PSA, PWCC and Moser should all go under. PSA can be the exception only if it can entirely reform and change.

I think the grading system/business is corrupt, and is, in big part, concerned, focused and invested in things other than, and counter to, objective grading and authentication. And if it is unable or uwilling to objectively grade and authenticate, then it shouldn't be in the business . . . And that statement doesn't even touch on if they are capable of grading and authenticating.

If they were intellectually honest they would say "We have to dissolve the PSA Registry, or at least attach a big fat disclaimer to it, because these numbers are obviously not reliable and almost certainly wrong." But honesty and accuracy clearly are not essential to their business model. If they were they would have admitted long ago that the T206 Gretzky Wagner is trimmed and misgraded long. Refusing to admit the Wagner is altered and misgraded is akin to a scientific "authority" refusing to admit the earth rotates around the sun and materials are made up of atoms and molecules ("And we should trust your statements on other scientific topics why?"). And that right there is the problem.

Whether they will, or 'should' as some collectors might say, reform and change is a separate matter. Many collectors and dealers are fine with the old corrupt, and perhaps inept, grading system and want it to continue, because they also are focused and invested things other than, and counter to, objective grading and authentication. Many are literally invested in the system.

Now if PSA wishes to wholesale reform their system and model, then that would be a reasonable response I could subscribe to and support. But that would require a wholesale reform and change in philosophy. To use Thomas Kuhn's once radical and now cliched and misused terminology, it would require a paradigm change.

A big +1

And David has a new ebook out on baseball card authentication. It's on my to-do list to read over the holiday weekend. Let me thank you in advance for your effort.

[bnorth]

Originally Posted by barrysloate

A big +1

And David has a new ebook out on baseball card authentication. It's on my to-do list to read over the holiday weekend. Let me thank you in advance for your effort.

Awesome, got a link?

[Tim Zwick]

Courtesy of Al @ LOTG.....

https://online.flippingbook.com/view...70515-29356677

[Johnny630]

Originally Posted by swarmee

Yeah, it's a wall of text, but most of those points have been made in the previous threads that have rolled off the board. You might want to read more threads that talk about PSA's grade guarantee and what we've already discussed.
Not to say it can't be rehashed, just that it you're going to pontificate about it, we've already done it.


I'm not hoping for PSA's demise; you can see that because I want them to offload their financial risk onto PWCC and Moser and their other alterers. But if PSA doesn't come out and PUBLICLY STATE that they were incapable of detecting alterations, and have created/proven new techniques to catch these cards from being submitted in the future, I don't see how their company has any more value than the Set Registry, which will wither and die when people stop submitting cards knowing that the whole enterprise is built on fraud. I WANT PSA TO REFORM. But without a significant attack on its warranty reserve or law enforcement intrusion into its business, I don't see PSA having this "Come To Jesus" experience.

I don't agree with the PSA Apologists on this board and others that think that the status quo will never change. It's been about 2 months since the first PSA "conserved" Mantle was outed. Have people forgotten about this yet? Have the blowout detective agency (BODA) stopped finding altered cards? Have people that are invested in the hobby stopped posting about this endemic fraud? No. And the National is coming up in a month. The word about this fraud will only spread from here on out.

I agree with all you’re saying, I really hope and pray it happens.

It’s sad but the sheeple do not care one bit they’re addicted to the Registry and Pop Report.... Newport Beach and Mr Vault on the Lake Know this....They’re Smart they will stay hush hush �� Mr Vault on the Lake will refund the bad cards all under Newport Beaches Watch and Direction each will continue covering each other’s back side.....full on damage control....

[barrysloate]

Originally Posted by bnorth

Awesome, got a link?

I got an email from Love of the Game Auctions with a link.

Oops, someone already linked it.

[perezfan]

Originally Posted by drcy

I think PSA, PWCC and Moser should all go under.

I think the grading system/business is corrupt, and is, in big part, concerned, focused and invested in things other than, and counter to, objective grading and authentication. And if it is unable or uwilling to objectively grade and authenticate, then it shouldn't be in the business . . . And that statement doesn't even touch on if they are capable of grading and authenticating.

My opinion and others are free to disagree.

+1... very well said.

And with regards to Bob’s lengthy post, I’m glad he shared his perspective as a CPA/Auditor. I know some of it was redundant, but there’s some great insight there. I only hope that PSA is listening and acts accordingly.

[kateighty]

While I agree with the majority of what drcy said where's the name? Am I missing something here? Leon calling me up and asking for my info was mildly (ok actually extremely) terrifying but I get it now. 2k+ posts and one like this without a name.

[drcy]

Originally Posted by kateighty

While I agree with the majority of what drcy said where's the name? Am I missing something here? Leon calling me up and asking for my info was mildly (ok actually extremely) terrifying but I get it now. 2k+ posts and one like this without a name.

Fair point. Added my name to the bottom of my post.

[kateighty]

Originally Posted by drcy

Fair point. Added my name to the bottom of my post.

Awesome! You make many great points! No ill will or anything. Leon clearly has a life outside of n54 so just making sure we're all equally accountable when discussing similar points.

[drcy]

Originally Posted by kateighty

Awesome! You make many great points! No ill will or anything. Leon clearly has a life outside of n54 so just making sure we're all equally accountable when discussing similar points.

No offense was taken.

[mechanicalman]

Originally Posted by drcy

No offense was taken.

David, congrats on your book. You have one of the best card-related names on the board. You should consider working it into your profile as you seem to express many opinions in anonymity.

[kateighty]

I had mine as my signature and learned it had to be under real name in my profile settings. Hope this helps.

[Leon]

Originally Posted by mechanicalman

David, congrats on your book. You have one of the best card-related names on the board. You should consider working it into your profile as you seem to express many opinions in anonymity.

I guess I just figured everyone knows David (hey David) but I guess not. He has a permanent link in our archive section, of a book he wrote, and an acknowledgment for helping the forum too. But true, he should have his name out here in his posts, when he gives opinions, like everyone else..

http://www.net54baseball.com/forum/c...ivecenter.html

http://cycleback.com/cardsauthentication.pdf

And back to the topic. I heard through the grapevine that PSA is expecting a record turnout!

.

.

[kateighty]

Originally Posted by mechanicalman

David, congrats on your book. You have one of the best card-related names on the board. You should consider working it into your profile as you seem to express many opinions in anonymity.

Exactly. Don't mean to start crap anyone. I too am an author, mostly in the legal and academia arena. How is it that I felt the wrath of Leon all "KAAAAT WHO ARE YOU!? Where's your name?!!" and consequently have my name next to everything I write. But there's another author out there who has never had to have his name next to any of his 2500+ posts? Please someone fill me in.

[kateighty]

Originally Posted by Leon

I guess I just figured everyone knows David (hey David) but I guess not.

Really Leon? That's a great way to encourage new members. And also a quick way to once again discourage me to be a member on this board. Really quite upsetting.

[kateighty]

I have his book Leon. Would have been great to know all this time he was drcy. Didn't realize I was supposed to read through the archives and put two and two together while the rest of us are REQUIRED to use our names.

[drcy]

When Cary Grant enters the bar, you don't ask him for id

[brianp-beme]

I put my full name on a post whenever I post an opinion about an individual or company, as is stated in the guidelines, but otherwise my posts are without my name, because mainly I write silly stuff or something that might be useful.

David provides a ton of useful information...most of his posts do. And he has been known for his sly remarks that make you think.

BrianP(arker)-beme (I guess I have to post my name, because, dangit, I posted what could be viewed as an opinion of a person).

[BobC]

Originally Posted by Peter_Spaeth

Bob, good discussion. I wonder how efficient the market is for CLCT stock, given that recent developments obviously could have a material impact on CU through the warranty and reserve, but also given that the stock price apparently has not been affected at all other than a brief response to what was probably just a short attack by Seeking Alpha. If one assumes an efficient market, then the market apparently doesn't perceive much risk. Then again, with CLCT being such a small cap company and so thinly traded, the market may not be efficient.

Peter,

Thanks, and I agree with you, it is thinly traded and likely not an efficient market. However, didn't someone post that CLCT was recently added to the Russell 200 exchange? If so, that would likely up their presence and make them noticed a bit more than in the past.

My hope is that the CU auditors are made aware of the issues and take that into consideration during CU's current year-end audit. I will be extremely interested to see what, if any, mention is made of the current issues in the upcoming Annual Report of CU, or in the impact it may have on their financials through their warranty reserve. And with a 6/30 year-end, those financials and Annual Report will be out sometime by this September/October. And being a publicly traded company, those financials and Annual Report will be available to anyone with internet access as a matter of public record. PSA is in a unique position within the collecting community as to my knowledge they are the first ever party/entity that is being associated with such a potential scandal in the card collecting hobby that also happens to be part of a publicly traded company subject to the additional reporting requirements, scrutiny and oversight of the SEC. So unlike any of the card doctors, collectors, dealers, auction houses, grading companies, etc. involved in all of the earlier scandals and frauds that have come out in our hobby, this will be the first time we can all actually get to see the financial impact such issues can have on some party/entity involved.

What CU management tells the auditors about the current issues, if anything beyond the normal year-to-year issues they have always had with erroneously graded cards, would be extremely interesting to learn and know. We obviously won't be privy to what is actually told to the auditors, but what ends up being reported in the Annual Report and financials should give us a fairly good clue as to what they ended up telling and sharing with them. To my knowledge there are no current or pending lawsuits or litigation involving any of the current issues that PSA may be involved in, so auditor inquiries to the CU lawyers for this year's audit will likely make no mention of any of this. After that, it may just be up to what CU management feels is appropriate to share with their auditors. And frankly, I could see their management saying nothing is really different than it has been in prior years, and even so, any alleged issues or problems would be aggressively refuted and fought, and that in the end, they would expect no material effect on their business or financials. And unless someone on their outside accountant's audit team just happens to also be a collector with knowledge of what is currently going on, the auditors likely won't know about all these issues that we have recently been made aware of and just go with what management is telling them.

So, it is a matter of public record that Grant Thornton LLP is the outside auditor for CU, and has been since 2005. They are a national accounting firm with offices all around the country, and the audit of CU is run out of their Newport Beach, California office. So the actual audit team members directly working on the CU audit, and the partner in charge of and responsible overall for that audit, will likely be working out of that office as well. There is the possibility that CU has decided to change auditors for this year-end, but that is not likely as it is usually more efficient and cost-effective for a company to retain the auditors they have had in the past. And the contact information for Grant Thornton's Newport Beach office is easily found on the internet. i will stop there!

[Peter_Spaeth]

I suspect, Bob, that PSA will aggressively downplay it with their auditors, and claim nothing is new here just an intensification of the chatter that's always in the background. I think they could probably afford a significant increase to the reserve, as they seem to have (you would know better than I would, interested in your opinion) a decent amount of cash for a company their size, but at the same time that could affect perception of their confidence in their own abilities to grade and I doubt they want to send that message. But we'll see.

[BobC]

Originally Posted by Peter_Spaeth

I suspect, Bob, that PSA will aggressively downplay it with their auditors, and claim nothing is new here just an intensification of the chatter that's always in the background. I think they could probably afford a significant increase to the reserve, as they seem to have (you would know better than I would, interested in your opinion) a decent amount of cash for a company their size, but at the same time that could affect perception of their confidence in their own abilities to grade and I doubt they want to send that message. But we'll see.

That is exactly what I'm thinking also, that they will downplay any current issues as nothing new and assert that as always they will vigorously defend themselves against any and all false or misleading allegations. And quite frankly, that is really all everything is right now, allegations. Despite all the scans and evidence that the Blowout guys have unearthed, and what looks to be fairly damning evidence across the board, nothing has yet been definitively proven as factual in any applicable court or by any other organization or party deemed/felt by the hobby community to represent it in determining such things. The sad truth is that up to now, the hobby has been looking to the likes of TPGs like PSA to be considered and treated as the be-all-end-all arbiters of what is or isn't authentic or altered. So with the recent, sudden revelations of all the suspect graded cards that are showing up, do we really expect any of the TPGs to suddenly realize they may not know as much as they profess to in regards to cards and what they are doing in grading them, and to openly start to admit that they have mistakenly been grading altered/doctored cards for years? It financially could be ruinous to them to now start doing so, and upend the hobby itself by putting things like the entire Registry in question. So as I've said before, it seems that even if the TPGs were not knowingly involved and collusive with card doctors, dealers and any other parties possibly involved in these fraudulent schemes, because of the financial and business effects these revelations could have on them, it behooves them to shut up and say nothing about this. They are in a virtual Catch-22 where if they admit to their prior grading errors and mistakes, it can end up costing them financially and reputation/business-wise. And if they say and do nothing and stick by their earlier grading opinions, the evidence found about their alleged mistakes will still find them guilty in the court of public opinion, which these myriad of threads about the issue already seem to prove true, at least among people on the BO and Net54 forums. In all the threads and posts I've seen, I don't seem to remember many, if any, posters taking the side of the TPGs and defending them as being correct.

And think about this, despite all the before and after scans the Blowout guys have been able to find and share with everyone, does anyone truly think the card doctors would have limited themselves solely to only picking up cards from other recent auctions to then perform their magic on and have re-graded and sold right away? What about all the cards the card doctors may have picked up at shows, from private sales, that were originally raw, etc., etc., where there were no convenient, recent, high-res scans the Blowout guys could go back to and show the similarities and then highlight the alterations made to such cards? My guess is that given the years over which these card doctors have been known to be operating and the multiple sources and areas they could have been getting their subjects to work on and alter, the number of supposedly altered/doctored cards that the Blowout guys have been able to find before and after scans of and show us are probably only an unbelievably small fraction of the doctored/altered cards that actually could be out there in the hobby, all sitting in otherwise legitimate, TPG graded holders.

And here is the scariest thing of all to me. If these card doctors are that good and can make these alterations so that they cannot be readily detected by the so called expert TPG companies when looking at them, without the availability of these before and after scans that the Blowout guys have been able to find and share with us, there is no way to tell beyond a doubt that any other graded cards with a numerical grade, regardless of what that grade is, have not also been altered or doctored. Unless it was found that these cards doctors over the years had been keeping records of all the cards they had worked on and then got re-graded and what they got as a bump in the grades, the new cert numbers, and so on, it will be impossible to tell. And I sincerely doubt the card doctors or anyone else possibly involved would be that stupid to keep such detailed records around that could possibly incriminate them. And even if they did keep such records, how would you be able to coerce them into making them public unless legal authorities started going after them criminally and somehow getting such data from them before they had a chance to destroy it.

And because of all this uncertainty and the ultimate inability to be able to possibly prove definitively what graded cards are or aren't altered/doctored, I can see a large part of the hobby community turning a blind eye and deaf ear to the whole thing and waiting till it blows over. Too many people have too much money tied up in their collections or inventory, or associated with their Registry holdings to want to see the entire hobby trashed to the point that they end up suffering financially as a result. Because of the unknown numbers of already altered/doctored cards that may be sitting in graded holders, and the inability for anyone to now go back and prove otherwise, the hobby in general may just end up accepting the fact that there are probably a lot of altered/graded cards in TPG company holders out there, but that if the TPGs couldn't detect any issues, then the'll leave them as is and basically the hobby will have started accepting these as restored/conserved cards and leave them as graded.

Otherwise, how can you feel comfortable buying any graded card then? Will one/some of the TPGs admit they may have had shortcomings and revise their grading procedures and testing so as to be able to detect these alterations in the future? if so, could it possibly mean that any future sales of graded cards will now require the seller to have a card re-graded to see if it were possibly altered before someone purchased it? I just can't see that happening due to the sheer number of graded cards out there and the costs to go through doing all that. And even so, who would trust any of the existing TPGs to get it right anyway. Quite honestly, you know who would probably be the best party/group to set up a new TPG to do the grading and detect these alterations, the card doctors themselves! Who else would be better able to detect the alterations than those who knew how to do them in the first place, right? But hopefully, that isn't ever happening either.

Getting back to the issues with regard to the CU financials and Annual Report, we don't know what their year-end numbers as of 6/30/19 will look like right now, but the measure of what is considered material to the financial statements will be determined based on those year-end numbers. And I already mentioned that based on the prior year-end numbers as of 6/30/18, the measure of materiality on those financial statements would probably have been around $500K, not really that much. So depending on what PSA graded cards were showing up on those Blowout lists as questionably graded, and the potential differences in their cumulative value should they actually only have been graded as "A" (authentic) instead of receiving numerical grades, that is what should be considered and factored into the Warranty Reserve that will show up on CU's financials. What actually ends up on their will thus be very telling.

[swarmee]

Originally Posted by BobC

And because of all this uncertainty and the ultimate inability to be able to possibly prove definitively what graded cards are or aren't altered/doctored, I can see a large part of the hobby community turning a blind eye and deaf ear to the whole thing and waiting till it blows over.

This is what has happened in all the previous scandals, and you can see those heavily invested parties already hoping this will blow over too, so their their baseball card nest eggs aren't decimated in value.
However, now the investigators are the collectors that are fed up with Beckett, PSA, and to a lesser extent, SGC claiming to be unbiased arbitrators of card condition. They are not letting this blow over. It's now been 2 months since the first card was noted to be "conserved" through PSA, and the number of fraudulent cards detected and number of Cert # submission records are only INCREASING in severity and sheer numbers. Currently, PSA is liable for approximately $1,000,000 in Grade Guarantees for just the cards with before and after pictures.
But as I informed them, if PWCC pays for the reimbursement, that lessens their liability. If PWCC or Gary (or other fraudsters) then try to get reimbursement through the Grade Guarantee on cards they KNOWINGLY submitted as altered, PSA should tell them to pound sand since they violated the rules they signed when they submitted the cards. And Brent himself in that hour-long video, promised to refund from PWCC's pocket the fraudulent cards submitted directly by the company.
We haven't even gotten to the National yet. PSA may be sticking its head in the sand, but if their reserve doesn't go up to the millions in the next shareholder statement, someone should refer it to the SEC for investigation. PSA still has not made ANY notification to its collectors, save the worthless "we were duped" statement on their never read message board. It's never been on their website, emailed to their customers, and they haven't been calling anyone, as far as I know.
PWCC actually had reached out to some of the collectors who had cards outed (a.k.a. "slandered" as a Brettism) on the Blowout boards, but not to any of the other customers who bought cards on the same tainted submissions. If people aren't willing to demand accountability for PSA, Beckett, and SGC's lack of accuracy, then nothing will change without law enforcement. But some are speaking with their wallets.

I know I've directly contacted about 30 of their Set Registry guys to inform them their cards were tainted. If PSA isn't going to protect their customers (despite their "NEVER GET CHEATED" motto), I will step in. And so will the other Blowout Detectives. This isn't really like any scandal they've had in the past.

[Johnny630]

Originally Posted by swarmee

This is what has happened in all the previous scandals, and you can see those heavily invested parties already hoping this will blow over too, so their their baseball card nest eggs aren't decimated in value.
However, now the investigators are the collectors that are fed up with Beckett, PSA, and to a lesser extent, SGC claiming to be unbiased arbitrators of card condition. They are not letting this blow over. It's now been 2 months since the first card was noted to be "conserved" through PSA, and the number of fraudulent cards detected and number of Cert # submission records are only INCREASING in severity and sheer numbers. Currently, PSA is liable for approximately $1,000,000 in Grade Guarantees for just the cards with before and after pictures.
But as I informed them, if PWCC pays for the reimbursement, that lessens their liability. If PWCC or Gary (or other fraudsters) then try to get reimbursement through the Grade Guarantee on cards they KNOWINGLY submitted as altered, PSA should tell them to pound sand since they violated the rules they signed when they submitted the cards. And Brent himself in that hour-long video, promised to refund from PWCC's pocket the fraudulent cards submitted directly by the company.
We haven't even gotten to the National yet. PSA may be sticking its head in the sand, but if their reserve doesn't go up to the millions in the next shareholder statement, someone should refer it to the SEC for investigation. PSA still has not made ANY notification to its collectors, save the worthless "we were duped" statement on their never read message board. It's never been on their website, emailed to their customers, and they haven't been calling anyone, as far as I know.
PWCC actually had reached out to some of the collectors who had cards outed (a.k.a. "slandered" as a Brettism) on the Blowout boards, but not to any of the other customers who bought cards on the same tainted submissions. If people aren't willing to demand accountability for PSA, Beckett, and SGC's lack of accuracy, then nothing will change without law enforcement. But some are speaking with their wallets.

I know I've directly contacted about 30 of their Set Registry guys to inform them their cards were tainted. If PSA isn't going to protect their customers (despite their "NEVER GET CHEATED" motto), I will step in. And so will the other Blowout Detectives. This isn't really like any scandal they've had in the past.

+1 Joh

[perezfan]

It's arguably the biggest scandal to hit the hobby, and is receiving virtually no "mainstream media" attention. Of course it behooves PSA to shut up. PSA is counting on it all blowing over, but if enough attention is brought to the matter at The National Convention, there will definitely be mainstream coverage that finally captures it. Media is always present at The National...

Spreading the word (as swarmee is doing) is really up to the collectors who care about the hobby. There is no other "voice" in our corner, and the opposition has far deeper pockets to defend and deflect blame.

Bob, you made a lot of good comments in your post, some of which may have gotten buried (due to the length of it). But one of the keys is that nobody knows how many altered cards are in numbered slabs. Card Doctors have been at it forever, and it's only recently (through use of the internet and excellent detective skills) that these alterations have been identified.

I cannot even imagine how many thousands of raw cards were bought at local shows or from private collections, which cannot be traced like the ones on Blowout. And how many altered examples that now reside in numbered holders is anyone's guess. Those who are deeply invested (whether monetarily or emotionally) will never be able to give it up, but the numerical grading system is now called into question and has largely been rendered meaningless. The timing is ripe for a complete system overhaul.

[Peter_Spaeth]

The timing is ripe for some serious prosecutions. This hobby will never police itself. 99 percent will look the other way or gladly take in the profits from the price umbrella.

And continue to protect card doctors buying from them or consigning to them.

[Johnny630]

Originally Posted by Peter_Spaeth

The timing is ripe for some serious prosecutions. This hobby will never police itself. 99 percent will look the other way or gladly take in the profits from the price umbrella.

And continue to protect card doctors buying from them or consigning to them.

Agree Peter sadly it’s always been that way and will continue to be....

[samosa4u]

Originally Posted by Tim Zwick

Courtesy of Al @ LOTG.....

https://online.flippingbook.com/view...70515-29356677

Awesome! Thank you so much for providing this link!

I also have to read 'Ultraviolet light and its uses' by Cycleback as well.

[swarmee]

Originally Posted by perezfan

I cannot even imagine how many thousands of raw cards were bought at local shows or from private collections, which cannot be traced like the ones on Blowout.

That's one of the interesting things. The whitman111 account has purchased some complete sets from raw card sellers, so it's not just cracked out slabs.
There are many sets in the PSA registry that are completely useless due to fraudulently slabbed cards, IMO:
1952 Topps Look-N-See
1950-60s Parkhurst Hockey
1948 Leaf Baseball, Football, and Wrestling
T206 (not just from Moser, but years and years of trimmed cards)
1952 Topps baseball
1950s Bowman
1951 Topps Ringside
1952 Berk Ross
N162 Champions
1937 O-Pee-Chee hockey
1961 Fleer Basketball
N28 Ginter Champions
1933 Goudey Sport Kings
1957 Topps
1955 Bowman
1955 Bowman FB
1958 Topps
1960 Leaf baseball
1959 Topps baseball

Thousands upon thousands of cards altered from some of the nicest/most collected sets in the industry.

[barrysloate]

If the hobby is going to accept that a great percentage of all high grade cards are altered and not what they appear to be, then these cards should start selling at a deep discount. You can argue that a card altered to look like an 8 is still a beautiful card and worth buying for one's collection, but it would make no sense to pay top dollar for it.

If you are willing to pay say $1000 for a genuine NR MT/MT, you can't pay the same amount for a lower grade card that's been doctored, trimmed, recolored, dry cleaned, or whatever else. Somewhere, somehow collectors have to wake up to the ridiculousness of this all.

Or maybe absolutely nothing will change. Let's find out.

[Peter_Spaeth]

John all these guys are or were show guys, relentlessly looking for raw cards they could alter.

[Johnny630]

Originally Posted by Peter_Spaeth

John all these guys are or were show guys, relentlessly looking for raw cards they could alter.

You’re correct! I would see them either set up yup....or last year, even worse, white plains he was walking the floor with a badge/dealer pass.......I was like what the hell !!!!

[drcy]

Originally Posted by barrysloate

If the hobby is going to accept that a great percentage of all high grade cards are altered and not what they appear to be, then these cards should start selling at a deep discount. You can argue that a card altered to look like an 8 is still a beautiful card and worth buying for one's collection, but it would make no sense to pay top dollar for it..

That's what I've said. Even if altered 'high grade' cards are valued (and restored cards already have value), I find it hard to believe even a billionaire will place the same price difference between a 9 and a 10 knowing it's due to alteration in someone's basement.

At the least I expect a price correction. This will also be due to some, many, collectors leaving the hobby (for such card, at least) or paying less.

Someone argued that some will still value cards the same so things won't change. But that doesn't matter if a percentage don't. Prices across the board are a group thing, not a handful of people who don't care thing. If 20% don't care and 20% do, the 20% who do and no longer pay the $$ will help lower the prices.

I remember Julie Vognar saying years back she didn't deserve getting an auction house's catalog because she bid without winning. The auction house president corrected her, saying she deserved the catalogs because her bids helped realize the winning prices. Remove some bricks from the wall, even lower ones, and the wall is shorter.

Further, the prevailing hobby opinion about valuations will affect prices. Why does some billionaire newbie buy a 1952 Topps Mantle? Because hobbiests tell him it's the card to get. If prevailing opinion is "Fine, buy the card, but only an idiot $100,000 premium for a spooned out wrinkle and removed spot, the billionaire will hear that too." He may buy the card, but he's not going to pay the current $100,000 extra.

[barrysloate]

Originally Posted by drcy

That's what I've said. Even if altered 'high grade' cards are valued (and restored cards already have value), I find it hard to believe even a billionaire will place the same price difference between a 9 and a 10 knowing it's due to alteration in someone's basement.

At the least I expect a price correction. This will also be due to some, many, collectors leaving the hobby (for such card, at least) and paying less.

Someone argued that some will still value cards the same so things won't change. But that doesn't matter if a percentage don't. Prices across the board are a group thing, not a handful of people who don't care thing. If 20% don't care and 20% do, the 20% who do and no longer pay the $$ will help lower the prices.

Here's another reason David the prices of these cards will come down. In the battle between the card doctors who are trying to get their work past the graders, and the graders whose job it is to reject this garbage, the card doctors have just been given a rousing victory. They're popping the champagne, because if the TPG's refuse to acknowledge and fix this mess, they've given the card doctors the green light to continue doing what they've been doing. In fact, many will ramp up production. Heck, some might even hire a few trainees and teach them the tricks of the trade (when business is good you expand).

As a result, the number of altered cards in circulation will increase dramatically. Soon, there will be so many available they won't even be that hard to find. And if you increase the supply, prices will go down.

This is not a good look for the future of this industry. Nobody is listening to me, but I suggest TPG's take a really hard look at this problem before the hobby is ruined altogether.

[Johnny630]

Originally Posted by barrysloate

Here's another reason David the prices of these cards will come down. In the battle between the card doctors who are trying to get their work past the graders, and the graders whose job it is to reject this garbage, the card doctors have just been given a rousing victory. They're popping the champagne, because if the TPG's refuse to acknowledge and fix this mess, they've given the card doctors the green light to continue doing what they've been doing. In fact, many will ramp up production. Heck, some might even hire a few trainees and teach them the tricks of the trade (when business is good you expand).

As a result, the number of altered cards in circulation will increase dramatically. Soon, there will be so many available they won't even be that hard to find. And if you increase the supply, prices will go down.

This is not a good look for the future of this industry. Nobody is listening to me, but I suggest TPG's take a really hard look at this problem before the hobby is ruined altogether.

Antique market fell hard.....are you implying you think it could hit this industry soon ?

[barrysloate]

It can. It's not bulletproof.

[Dpeck100]

I am looking at the lots in the current Heritage auction. From what I can see it looks like business as usual.

I don't have any skin in the vintage baseball card game but I am extremely skeptical of the pending collapse.

It may very well happen and a few will be able to come online and say to others I told you so but I think that is a very low probability call.

Ken Kendrick's quote was he was disappointed when the testimony came out under oath it was stated the Wagner was trimmed. For some reason he got a four times his purchase price offer and has the card insured for more than 10 million. I think these whales still want the merchandise.

Time will tell.

[Johnny630]

Originally Posted by Dpeck100

I am looking at the lots in the current Heritage auction. From what I can see it looks like business as usual.

I don't have any skin in the vintage baseball card game but I am extremely skeptical of the pending collapse.

It may very well happen and a few will be able to come online and say to others I told you so but I think that is a very low probability call.

Ken Kendrick's quote was he was disappointed when the testimony came out under oath it was stated the Wagner was trimmed. For some reason he got a four times his purchase price offer and has the card insured for more than 10 million. I think these whales still want the merchandise.

Time will tell.

Yes it will....Def embattled times for the industry right now....not a good image especially prior to the National....Already has hit the NYT

[Dpeck100]

Originally Posted by Johnny630

Yes it will....Def embattled times for the industry right now....not a good image especially prior to the National....Already has hit the NYT

Yes I have been following it the entire time. The NYT piece didn't exactly come down that hard on the concept of alteration.

https://sports.ha.com/itm/baseball/1...umbnail-071515

Here is a 1953 Topps Mantle PSA 9. The description states the first 9 to come up for auction in ten years.

I find it hard to believe that high dollar collectors who are deeply entrenched in the hobby are going to say no thanks I am not bidding.

[BobC]

Originally Posted by perezfan

Bob, you made a lot of good comments in your post, some of which may have gotten buried (due to the length of it). But one of the keys is that nobody knows how many altered cards are in numbered slabs. Card Doctors have been at it forever, and it's only recently (through use of the internet and excellent detective skills) that these alterations have been identified.

Sorry for my long posts, but I'm old school and not a child of Twitter and Instagram. If I'm going to say something I'm going to try and present a complete picture/argument/statement and not just put out a quick line or two. All too often someone puts down a line or two and it is so vague or incomplete that most people misinterpret or misunderstand what they are trying to say, and then more or less ignore or really don't even think about what they read. If someone reading my posts realizes I'm not just blurting out or making a knee jerk reaction or statement as to what is going on, it will hopefully get more people really thinking about the issues and problems.

The questionability as to the alteration of so many cards is already out there, the proverbial horses have already left the barn and they aren't coming back!!! Absent card doctors coming forth and admitting what they have done and what graded cards are out there that have been altered, we'll never know for certain which cards are or are not good. And that is only if they kept complete, accurate records and finally agreed to/were forced to share that information with the public. But because of all the time that has likely passed and the myriad of cards they have likely altered and put into the hobby over the years, who knows how many of those cards over time have been cracked out of their originally misgraded holders, re-submitted, changed from one TPG to another, or put back into raw form so that none of them can ever be traced back to original card doctor records. It is already too late as the taint to so many cards now exists, and unless we can come up with tests and measurements that definitely prove that a card has or has not been doctored/altered, we'll never be able to tell for sure the correct nature of almost any graded card, and unfortunately, maybe even quite a few raw ones out there that had been broken out of their holders. And even if it were possible to come up with definitive tests and procedures to prove or disprove alterations, who is going to bear the brunt for the costs to have every card out there re-tested and graded, and who is going to be the group/company to do it? And maybe even worse, if you have a large collection or inventory of graded cards, do you really want to have someone go through them and then let you know a large portion of them are not completely legit and have been altered? There are so many innocent collectors/dealers out there that stand to get hurt it is frightening.

And as Swarmee mentioned in one of his earlier posts, in previous scandals the powers that be in the hobby would be quiet and merely wait for things to blow over and then go back to business as usual. This may be a little different though as the current scandal may be a lot bigger than previously thought and more far reaching. Also, as I've tried to point out, with the possible involvement of a publicly traded entity, whether voluntarily or involuntarily, it has added a new, unique perspective and twist to the issues and also the potential for another stage on which news of the issues can be presented and brought to the media and public at large. Issues and potential scandals involving baseball cards is really only of interest to a very small part of the public, and a lot of people in the mainstream think we're weird and strange to begin with because we still collect cards as adults, so they really aren't going to be that interested and care much about are situation or problems. However, now have those same issues and scandals possibly affecting a publicly traded company and its stock value and suddenly you have a whole new and potentially larger portion of the public that may be interested in what is going on. So all the more chance it finally gets more publicity and notice. PSA/CU is not really a very large company, even though publicly traded, and likely won't ever get front page mention on the Wall Street Journal, but you never know!!

[Peter_Spaeth]

Speaking of the WSJ, a reporter who writes for them had a story ready to go, but the editors killed it. Very disappointing.

[Peter_Spaeth]

Bob -- please take this constructively, but if you could break up some of those long paragraphs your posts would be easier to read.

[Johnny630]

Originally Posted by Peter_Spaeth

Speaking of the WSJ, a reporter who writes for them had a story ready to go, but the editors killed it. Very disappointing.

Ugh that’s disheartening Peter......

[Peter_Spaeth]

Originally Posted by Johnny630

Ugh that’s disheartening Peter......

Yup. With all that PWCC has done to try to clothe itself in Wall Street garb and jargon, it would have been perfect too.

[Johnny630]

Originally Posted by Peter_Spaeth

Yup. With all that PWCC has done to try to clothe itself in Wall Street garb and jargon, it would have been perfect too.

Right pushing the investment side aspect of high grade vintage......come on! What a bunch of bull....short term it worked... people bought it hook line and sinker...this would have been a very fitting piece for the journal! Maybe the gentleman knows the editor at the IBD....would fit even better there or
CNBC Greed that may very well happen down the road after it all shakes out