Send lawyers, guns and money

Peter_Spaeth · #1 02-06-2010, 11:17 AM

The teflon's hit the fan.

http://www.nydailynews.com/blogs/iteam/

Exhibitman · #2 02-06-2010, 11:28 AM

Quote:

Originally Posted by Peter_Spaeth

The teflon's hit the fan.

http://www.nydailynews.com/blogs/iteam/

This'll be fun...

Blunder19 · #3 02-06-2010, 11:39 AM

Wow.... speechless...

Rob D. · #4 02-06-2010, 11:40 AM

Damn conspiracy theorists ...

slidekellyslide · #5 02-06-2010, 11:49 AM

Looks like this is not going to go away quietly. So we learned that a Chicago Grand Jury is now looking into the allegations and this is the first I've heard of a rebacked T200...I'd like to hear more about that.

pwilk17 · #6 02-06-2010, 11:57 AM

I would like to learn more about Forman's cards including how many were and are in SGC holders and what grades they rec'd and when... It does not seem right that the owner of one of the hobby’s major grading firms is actively involved in the owning, buying and selling of millions of dollars worth of sports cards - Is Joe Orlando involved in this activity - I think not.

Fred · #7 02-06-2010, 12:04 PM

Say it aint so....

Jim VB · #8 02-06-2010, 12:05 PM

I'm shocked, shocked to find that gambling is going on in here!

Orioles1954 · #9 02-06-2010, 12:05 PM

Quote:

Originally Posted by pwilk17

I would like to learn more about Forman's cards including how many were and are in SGC holders and what grades they rec'd and when... It does not seem right that the owner of one of the hobby’s major grading firms is actively involved in the owning, buying and selling of millions of dollars worth of sports cards - Is Joe Orlando involved in this activity - I think not.

Who knows? PSA's headquarters are only two miles from a major auction house which sells very highly graded PSA cards.

Fred · #10 02-06-2010, 12:07 PM

Dan do you think it was a T200 premium? Let's say they actually bring this to court and a jury comes up with a guilty verdict. What would happen? Mastro Auctions no longer exists. I suppose that the new company could take a pretty big hit.

Five years ago if you asked who had the biggest and best baseball (sports card) card auction house I'm betting most people would have said Mastro.

pwilk17 · #11 02-06-2010, 12:15 PM

Imagine buying and selling sports cards in the millions of dollars and also being lucky enough to own one the hobby's most respected grading card firms at the same time. Very fortunate indeed!

slidekellyslide · #12 02-06-2010, 12:17 PM

Fred, I'm thinking it has to be a premium...the article says "Matte". A T200 would be impossible to reback wouldn't it?

Rob D. · #13 02-06-2010, 12:17 PM

Quote:

Originally Posted by pwilk17

Imagine buying and selling sports cards in the millions of dollars and also being lucky enough to own one the hobby's most respected grading card firms at the same time. Very fortunate indeed!

Keep your eye on the ball.

Jim VB · #14 02-06-2010, 12:20 PM

Quote:

Originally Posted by pwilk17

Imagine buying and selling sports cards in the millions of dollars and also being lucky enough to own one the hobby's most respected grading card firms at the same time. Very fortunate indeed!

Do you really expect that someone who starts up and owns a grading company would be someone who had no interest in the hobby?

I realize the potential for conflicts of interest here, but in the real world, I don't see any other way.

Dave Forman isn't actually grading any cards (yours, mine, or his own.) If the actual graders don't know the identity of the owners of the cards they grade, that minimizes the problem. If SGC hasn't set up that type of chinese wall, then there could be problems.

sox1903wschamp · #15 02-06-2010, 12:21 PM

They allegedly shilled up a set of 1977 baseball cards? Looks like nothing was spared

.

Jim VB · #16 02-06-2010, 12:22 PM

Quote:

Originally Posted by sox1903wschamp

They allegedly shilled up a set of 1977 baseball cards? Looks like nothing was spared

.

That was the funniest part of the article.

slidekellyslide · #17 02-06-2010, 12:24 PM

Quote:

Originally Posted by Jim VB

That was the funniest part of the article.

Not so funny to the two registry whales that were probably dueling for it.

pwilk17 · #18 02-06-2010, 12:28 PM

James Beckett (I think that is his name) and PSA's Joe Orlando (and employees) as part of a publicly traded company are not involved in the owning, buying and selling of sports cards as it is a HUGE conflict of interest. I have read statements from both individuals to that effect. I think the shenanigans going on between Forman and Mastro are brutal with both parties involved in questionable behavior.

bijoem · #19 02-06-2010, 12:36 PM

Quote:

Originally Posted by pwilk17

James Beckett (I think that is his name) and PSA's Joe Orlando (and employees) as part of a publicly traded company are not involved in the owning, buying and selling of sports cards as it is a HUGE conflict of interest. I have read statements from both individuals to that effect. I think the shenanigans going on between Forman and Mastro are brutal with both parties involved in questionable behavior.

are you saying that not one single PSA employee owns a single card?

that sounds ludicrous to me.

Jim VB · #20 02-06-2010, 12:41 PM

Quote:

Originally Posted by pwilk17

James Beckett (I think that is his name) and PSA's Joe Orlando (and employees) as part of a publicly traded company are not involved in the owning, buying and selling of sports cards as it is a HUGE conflict of interest. I have read statements from both individuals to that effect. I think the shenanigans going on between Forman and Mastro are brutal with both parties involved in questionable behavior.

Beckett's has more conflicts than you can shake a stick at. They grade cards (with competing companies, BGS, BVGS and BCCG) using differing grading scales. They sell, for profit, price guides, both for raw and graded cards. AND... They auction off cards on Ebay, for a percentage of the take (both cards they have graded and others.)

If you're looking for people as pure as the driven snow, good luck!

Jim VB · #21 02-06-2010, 12:45 PM

Took 3 minutes of searching but...

Orlando collects, although he claims his collection is "small."

http://www.sportscardforum.com/artic...t-joe-orlando/

(In fairness here, he does sound like he collects memorabilia more than cards.)

pwilk17 · #22 02-06-2010, 01:16 PM

Easy short read - Conflicts of Interest are prohibited for all employees - these are representations made to the public as Collectors Universe is a publicly traded corporation. I believe that any conflict of interest is extremely serious and therefore not very likely.

http://phx.corporate-ir.net/phoenix....p=irol-corpgov

Go to Code of Conduct and then See Page 11

barrysloate · #23 02-06-2010, 01:22 PM

Joe- PSA employees may own cards but they shouldn't. The potential for conflict of interest is enormous. And maybe it is time for the FBI to take a good look at some of these graders. Given how much money is at stake based on a bump of a half grade, I can only imagine what is going on behind the scenes. If I were a betting man I would say much of what transpires after hours behind closed doors would be nothing short of shocking.

Fred · #24 02-06-2010, 01:29 PM

Do you think Joe O has SGC graded cards?

slidekellyslide · #25 02-06-2010, 01:29 PM

Quote:

Originally Posted by pwilk17

Easy short read - Conflicts of Interest are prohibited for all employees - these are representations made to the public as Collectors Universe is a publicly traded corporation. I believe that any conflict of interest is extremely serious and therefore not very likely.

http://phx.corporate-ir.net/phoenix....p=irol-corpgov

Go to Code of Conduct and then See Page 11

Heh. David Hall, the president of Collector's Universe (parent company of PSA) is also a coin dealer who sells his own company's graded coins (PCGS).

botn · #26 02-06-2010, 01:47 PM

Doubt this situation will have a favorable outcome for Legendary, SGC or Dave by the time it is all over. There is a reason that Mastro continued to loan money to Dave well after he proved he was not able or not willing to pay it back. It would be nice to have a more information on that, at the very least.

As far as what Barry said it is time for the FBI to take a closer look at these grading companies. It is obvious that not all cards are held to the same standards. Some submitters have advantages or opportunities which are not available to the general public. It is not always by accident or inexperience that we see so many altered or over graded cards in holders.

barrysloate · #27 02-06-2010, 01:54 PM

To continue my point, if it is discovered that employees of an auction house are bidding in their company's auctions, everyone on the board is up an arms and crying foul.

So why is it any different if graders are caught buying and selling baseball cards? As far as I'm concerned, it is potentially a much worse offense. An auction employee bidding with his own company may simply wish to add a piece to his collection. Not the worst transgression in the world.

But if a grader can assign a grade to his own cards, and then sell them himself or have somebody else do it, the potential for fraud is off the charts. As far as I'm concerned, if I owned a grading company and I caught one of my graders selling cards, I would fire him on the spot.

Jim VB · #28 02-06-2010, 02:06 PM

Barry,

I hear you but I don't think it's likely that we're going to find publishers, graders, or auctioneers, who have zero interest in the hobby.

barrysloate · #29 02-06-2010, 02:15 PM

I say if you want to be a grader you have to sign a contract which forbids you from buying and selling baseball cards while you are employed with the company, and that goes for everyone associated with it, from the top down. If buying and selling is your preference, then you need to find another job. You just can't do both.

Abravefan11 · #30 02-06-2010, 02:40 PM

Quote:

Originally Posted by barrysloate

I say if you want to be a grader you have to sign a contract which forbids you from buying and selling baseball cards while you are employed with the company,

I can understand why you would think this is a good idea but I find it a bit unreasonable. I don't know how someone could attain the level of expertise required to be a grader and then be OK with not being able to buy cards.

I could be wrong but I doubt the level of pay would out weigh the love of cards.

Fred · #31 02-06-2010, 02:53 PM

Barry,

I agree employees of grading companies not engaging in the selling of cards but I figure it should be ok for the employees to buy them. To me a conflict arises when employees of these grading companies begin to submit their own cards for encapsulation. Someone mentioned earlier that "if" this was the case, then there better be some very good rules and procedures in place for that situation. Overall, I wouldn't agree with employees of grading companies grading their own material or any material that belongs to someone that they know. There's just too much temptation and too much at stake in the market.

Just out of curiosity, what's the difference in price between a common T206 graded 7 and 8?

barrysloate · #32 02-06-2010, 02:54 PM

It's reasonable to assume that many of the graders were hobbyists, that's a fair point. But once they take the job of grader, they have to be prepared to give that up. They can keep their collections but they should not be active while they are grading other people's cards.

There are so many industries where people are forced to divest themselves of certain stocks and other holdings for a specified period of time while employed at their jobs. I do not take the position of grader lightly. They have a tremendous amount of power and influence, and can easily be enticed to give out special favors to major submitters and auction houses. I really think that industry needs to be policed better. And from what I've heard through the grapevine, law enforcement has an eye on them.

Do you understand how much money can be made by making a 7 a 7.5, or a 7.5 an 8? And all a grader has to do is create a new label and somebody has just made a boatload of money. And don't you think that's going on all the time? I do. Why wouldn't it? Can you find an easier way to make money than just bumping a card a half grade?

Ill say it again: the grading industry needs to be policed, and very closely at that.

Robextend · #33 02-06-2010, 02:54 PM

Quote:

Originally Posted by barrysloate

I say if you want to be a grader you have to sign a contract which forbids you from buying and selling baseball cards while you are employed with the company, and that goes for everyone associated with it, from the top down. If buying and selling is your preference, then you need to find another job. You just can't do both.

How about something along the lines that if you work for a 3rd party grader you can not have your cards graded? There might be very minimal conflict and of course there are plenty of ways around that, but I think it would be near impossible for someone that much involved in the hobby to just not collect at all.

barrysloate · #34 02-06-2010, 02:59 PM

Rob- that sounds good but a rogue grader can just give his cards to a friend to submit under his account. Then the grader overgrades the material, the friend sells it, and they split the profit. The whole thing stinks.

How do you police that? I don't know.

bbeck · #35 02-06-2010, 03:06 PM

In my opinion, the owner of a company investing in that company's cards is a major conflict of interest. We may never know if any perks were received unless somehow it becomes public knowledge. David Hall, the founder of PSA, was forced to sell his entire card collection when Collectors Universe went public because of a perceived conflict of interest. I believe most would wonder if an owner is given preferential treatment. I do not know how the cards were obtained, through purchase, submission or trade, but why put yourself in that position with that type of scrutiny. It is not smart business sense.

pow323 · #36 02-06-2010, 03:11 PM

There is ALOT more of this that goes on than you think! Tons on Ebay! And other Auction Houses that can be named.

bijoem · #37 02-06-2010, 03:12 PM

Quote:

Originally Posted by barrysloate

Joe- PSA employees may own cards but they shouldn't. The potential for conflict of interest is enormous. And maybe it is time for the FBI to take a good look at some of these graders. Given how much money is at stake based on a bump of a half grade, I can only imagine what is going on behind the scenes. If I were a betting man I would say much of what transpires after hours behind closed doors would be nothing short of shocking.

Barry -
I wasn't really arguing whether employee's owning cards was a conflict of interest or not.

I just found it fascinating that anyone could state, as if fact, that PSA employees are not involved in owning cards.

"James Beckett (I think that is his name) and PSA's Joe Orlando (and employees) as part of a publicly traded company are not involved in the owning, buying and selling of sports cards as it is a HUGE conflict of interest."

barrysloate · #38 02-06-2010, 03:13 PM

I understand Joe. Nobody really knows what is going on over there.

bijoem · #39 02-06-2010, 03:23 PM

Quote:

Originally Posted by barrysloate

I say if you want to be a grader you have to sign a contract which forbids you from buying and selling baseball cards while you are employed with the company, and that goes for everyone associated with it, from the top down. If buying and selling is your preference, then you need to find another job. You just can't do both.

Barry.....

If that was the rule for grading companies.... I would suggest the same rules for auction houses.

I think 'auction house' - owned lots opens a tremendous path toward potential conflict of interest.

Yet.... I believe most auction houses (even the ones I would trust most) have owned lots in their own auction.

With the proper transparency and the proper checks/balances in place - I don't think this rule would be necessary for either graders or auction houses.

botn · #40 02-06-2010, 03:35 PM

I think it is important to distinguish between a grader, owner or president of a grading company who collects, and to what degree, and one who is an active dealer selling hundreds of thousands of dollars a year to the public. In one of those scenarios, if something is happening "after dark" then the public is really not so much at risk. In the other scenario, if there is foul play, the public is directly impacted.

There are no checks and balances that we know of. What prevents someone with keys to the establishment from walking in after hours, say, or on the weekend (hypothetically speaking, of course) and holdering a few dozen cards? How long would that take and who would know?

barrysloate · #41 02-06-2010, 03:36 PM

Joe- I agree with your thinking and I will tell you that when I ran auctions I owned many of the lots. But here was my predicament: as a small auction house it was becoming increasingly difficult to get consignments, especially high end ones. The only way to round out my auctions and give them some pizzazz was to put in my own material. If I relied entirely on consignments, I was basically done. A big auction house doesn't have to worry about that, but I did. It was sink or swim.

As it turned out, I sank, but that's a story for another day.

bijoem · #42 02-06-2010, 03:42 PM

Barry - the hobby misses your auctions for sure.

To be truthful -

I don't have any problem with an auction house owning lots - but I do believe those auction houses should disclose the ownership in their catalog.

I also don't have a problem with employees of a grading company owning cards. I would just like for there to be checks and balances to be in place to ensure that the graders don't know who the submitters are.

Lets face it....
you have to trust the employees in any auction house / or any grading company. If insiders are looking to defraud people - they sure have easy access to the ways to do so (no matter what rules are in place).

BlueDevil89 · #43 02-06-2010, 03:49 PM

Bill Mastro is the P.T. Barnum of baseball cards. I had always assumed the worse about him and his auction house. Do the latest revelations surprise anyone?

barrysloate · #44 02-06-2010, 04:01 PM

Joe- what are the checks and balances at a grading company? Greg just said what I have been saying for a long time: I'm sure from 9:00-5:00 everything runs professionally at all of the grading services. It's what goes on after everybody's gone home for the night that worries me.

And thanks for missing my auctions.

pwilk17 · #45 02-06-2010, 04:12 PM

I do not mind if any auction house owns material in one of its own auctions as long as it is disclosed prior to bidding commencing and there is absolutely no shill bidding period. The auction house can take its chances like any other consignor (obviously they may promote their own items more than others through catalog placement etc.). I absolutely do not believe any owner/officer/director and employee of any card grading company should be allowed to purchase, have cards graded or sold from their first day of employment until their last - period!

nolemmings · #46 02-06-2010, 04:14 PM

seems to me that everybody in this one will go down with the ship--and I'm not certain that isn't the proper outcome.

calvindog · #47 02-06-2010, 04:20 PM

Quote:

Originally Posted by pwilk17

I do not mind if any auction house owns material in one of its own auctions as long as it is disclosed prior to bidding commencing and there is absolutely no shill bidding period. The auction house can take its chances like any other consignor (obviously they may promote their own items more than others through catalog placement etc.). I absolutely do not believe any owner/officer/director and employee of any card grading company should be allowed to purchase, have cards graded or sold from their first day of employment until their last - period!

This post is comical. What if the auction house promises to divulge ownership interest in cards in its auctions -- and then does not do so?

What if the auction house promises not to shill bid -- and then does so anyway?

What if the auction house bids on their own material -- with improper knowledge of what other bidders are doing?

And yes, let's have contracts signed, many carefully worded contracts. And who will enforce them -- God?

morgan118 · #48 02-06-2010, 04:30 PM

I believe when Dave Forman bought into SGC and became it's President he mentioned in the SGC magazine in an editorial statement that he no longer had any interests in being a dealer and would devote his efforts to running SGC exclusively. Like others have already stated however if anyone believes there aren't games played or preferrential treatment given at various levels of this hobby you are naive. Just hang around the grading booths at the shows and you will see things that will be very eye opening.

I just can't imagine Dave Forman would be this obvious and not have any concerns over conflicts of interest and what conclusions SGC customers might draw from it if found out.

calvindog · #49 02-06-2010, 04:35 PM

Good first post.

Rob D. · #50 02-06-2010, 04:40 PM

The fact that this thread quickly dissolved into one about the practices of grading companies, as opposed to the original topic of charges of alleged shill bidding and the failure to pay consignors by what was once the hobby's leading auction house makes it clear to me why many in our hobby look at collectors as merely sheep lined up to be sheared. Sadly, I include myself in the herd.