seeking alpha article Collectors Universe - A Scandal Waiting To Be Exposed

dwinters · #1 06-06-2019, 04:49 PM

THe volume was up slightly today. From 50k to 85k. Wondering what happens if some (or even just 1) of the larger holders dumps. I am expecting class action lawsuit to drop soon. That will be eye opening. I sent all the links to the major short funds.

swarmee · #2 06-06-2019, 04:53 PM

Quote:

Originally Posted by dwinters

I sent all the links to the major short funds.

Can you send the Beckett and SSI threads here too?
https://www.dps.texas.gov/CriminalIn...ions/index.htm

Let me know who they assign to the case.

Peter_Spaeth · #3 06-06-2019, 04:59 PM

Quote:

Originally Posted by dwinters

THe volume was up slightly today. From 50k to 85k. Wondering what happens if some (or even just 1) of the larger holders dumps. I am expecting class action lawsuit to drop soon. That will be eye opening. I sent all the links to the major short funds.

I bet the guarantee seemed like a good idea at the time. I have to believe they have known for a long long time that there was at least potential for liability well over and above the reserve -- it seems likely they were aware of the volume of doctored cards in the hobby and they can only do so much to keep them out -- but they probably never anticipated it could come to the forefront so quickly and dramatically. I would think that, more than the prospect of reduced revenues, would be the concern of a large investor at this point.

If the stock takes too big a hit there might be a way to fashion a securities fraud suit against CU, as well as whatever collector suits against PSA people are considering.

JeremyW · #4 06-06-2019, 05:22 PM

Quote:

Originally Posted by Peter_Spaeth

I bet the guarantee seemed like a good idea at the time. I have to believe they have known for a long long time that there was at least potential for liability well over and above the reserve -- it seems likely they were aware of the volume of doctored cards in the hobby and they can only do so much to keep them out -- but they probably never anticipated it could come to the forefront so quickly and dramatically. I would think that, more than the prospect of reduced revenues, would be the concern of a large investor at this point.

If the stock takes too big a hit there might be a way to fashion a securities fraud suit against CU, as well as whatever collector suits against PSA people are considering.

I'm the owner of a very small business & can't imagine the amount of requests for returns & reimbursement that must be going on between PWWC & PSA.

swarmee · #5 06-06-2019, 05:30 PM

And remember, barely anyone knows about this scandal yet.

joshuanip · #6 06-06-2019, 05:29 PM

Quote:

Originally Posted by Peter_Spaeth

I bet the guarantee seemed like a good idea at the time. I have to believe they have known for a long long time that there was at least potential for liability well over and above the reserve -- it seems likely they were aware of the volume of doctored cards in the hobby and they can only do so much to keep them out -- but they probably never anticipated it could come to the forefront so quickly and dramatically. I would think that, more than the prospect of reduced revenues, would be the concern of a large investor at this point.

If the stock takes too big a hit there might be a way to fashion a securities fraud suit against CU, as well as whatever collector suits against PSA people are considering.

Given their largest holder is an algo, they could be dumping right now because it's most likely failing its momo program.

griffon512 · #7 06-06-2019, 05:11 PM

Quote:

Originally Posted by dwinters

THe volume was up slightly today. From 50k to 85k. Wondering what happens if some (or even just 1) of the larger holders dumps. I am expecting class action lawsuit to drop soon. That will be eye opening. I sent all the links to the major short funds.

there's not enough liquidity for a major short fund (if there are any major ones left outside of kynikos) to establish a significant short position.

kateighty · #8 06-06-2019, 05:44 PM

Quote:

Originally Posted by dwinters

THe volume was up slightly today. From 50k to 85k. Wondering what happens if some (or even just 1) of the larger holders dumps. I am expecting class action lawsuit to drop soon. That will be eye opening. I sent all the links to the major short funds.

Granted I don't know who you are but once again, as someone who specialized in complex class action litigation, do enjoy the next 12 years as you slowly track a never-ending case. Even if it drops soon and it's eye opening there won't be a resolution for a very long time.

Peter_Spaeth · #9 06-06-2019, 05:49 PM

Quote:

Originally Posted by kateighty

Granted I don't know who you are but once again, as someone who specialized in complex class action litigation, do enjoy the next 12 years as you slowly track a never-ending case. Even if it drops soon and it's eye opening there won't be a resolution for a very long time.

I've been involved in some that are worse than the case parodied in Bleak House. I'd be interested to hear about a class action against PSA (other than for securities fraud by shareholders) that didn't have predominance issues. My gut reaction, admittedly biased from being on the defense side of these, is that when people talk about class actions and bandy about the prospect of class actions they don't usually understand the requirements.

Exhibitman · #10 06-06-2019, 06:00 PM

A mass action of a few dozen aggrieved purchasers in state court would be way more fun.

Peter_Spaeth · #11 06-06-2019, 06:04 PM

Quote:

Originally Posted by Exhibitman

A mass action of a few dozen aggrieved purchasers in state court would be way more fun.

Mass instead of class works for me.

dwinters · #12 06-06-2019, 06:05 PM

This is material information in my opinion. When will they be obligated to speak to it publicly.

Peter_Spaeth · #13 06-06-2019, 06:08 PM

Quote:

Originally Posted by dwinters

This is material information in my opinion. When will they be obligated to speak to it publicly.

Duty to update outside of regular quarterly reporting is a complex disclosure issue. Supreme Court just ducked it recently too. If you're interested this is a typical summary of the conflicting principles and law.

https://www.akingump.com/en/experien...-case-law.html

dwinters · #14 06-06-2019, 06:17 PM

The knowledge here is amazing. Thanks.

At a minimum any stock sells by insiders would be highly suspect. A public disclosure of major inside selling would raise more than a few eyebrows.

kateighty · #15 06-06-2019, 06:24 PM

Quote:

Originally Posted by Peter_Spaeth

I've been involved in some that are worse than the case parodied in Bleak House. I'd be interested to hear about a class action against PSA (other than for securities fraud by shareholders) that didn't have predominance issues. My gut reaction, admittedly biased from being on the defense side of these, is that when people talk about class actions and bandy about the prospect of class actions they don't usually understand the requirements.

I too have been on the defense side. Who knows we might have actually worked together! Many are quick to say "class action" when they in fact haven't a clue as to how much actually goes into certifying a class before any sort of action happens. Not to mention everything with MDL. Could be years.

steve B · #16 06-06-2019, 09:20 PM

Quote:

Originally Posted by Peter_Spaeth

I've been involved in some that are worse than the case parodied in Bleak House. I'd be interested to hear about a class action against PSA (other than for securities fraud by shareholders) that didn't have predominance issues. My gut reaction, admittedly biased from being on the defense side of these, is that when people talk about class actions and bandy about the prospect of class actions they don't usually understand the requirements.

For us non- lawyers.... What's a predominance issue?

Peter_Spaeth · #17 06-06-2019, 09:36 PM

Quote:

Originally Posted by steve B

For us non- lawyers.... What's a predominance issue?

Sorry. One of several requirements to maintain a class action is that common issues must "predominate" over individualized ones. Translated, that means roughly that you need to be able to establish liability towards the entire class by common proof and each plaintiff doesn't have to present his or her case. For example, everyone who bought the stock is injured if the company issued false financials and inflated the stock price. Each member of the class was hurt in the same way because the drug was inherently dangerous, or the car had a manufacturing defect.

But if the question is were people hurt because PSA failed to catch altered cards, or stiffed people on the guarantee, or was bad at grading, that feels to me like each and every person would have to show that on a case by case/card by card basis, even if there was an overall pattern. Just showing the pattern doesn't prove YOU were wronged. You would need to show that YOUR card was misgraded or altered or that YOU were stiffed on the guarantee. If that's the case, individualized issues "predominate" over common ones. If the case has to proceed as a boatload of mini-trials, it doesn't warrant class treatment.

Somewhat simplified but that is the idea.

joshuanip · #18 06-06-2019, 09:48 PM

Quote:

Originally Posted by Peter_Spaeth

Sorry. One of several requirements to maintain a class action is that common issues must "predominate" over individualized ones. Translated, that means roughly that you need to be able to establish liability towards the entire class by common proof and each plaintiff doesn't have to present his or her case. For example, everyone who bought the stock is injured if the company issued false financials and inflated the stock price. Each member of the class was hurt in the same way because the drug was inherently dangerous, or the car had a manufacturing defect.

But if the question is were people hurt because PSA failed to catch altered cards, or stiffed people on the guarantee, or was bad at grading, that feels to me like each and every person would have to show that on a case by case/card by card basis, even if there was an overall pattern. Just showing the pattern doesn't prove YOU were wronged. You would need to show that YOUR card was misgraded or altered or that YOU were stiffed on the guarantee. If that's the case, individualized issues "predominate" over common ones. If the case has to proceed as a boatload of mini-trials, it doesn't warrant class treatment.

Somewhat simplified but that is the idea.

From an accounting perspective, there is nothing needed to be disclosed, yet.

Deemed contingent liability, it needs to be recorded and disclosed if the liability meets more than likelihood possibility. Although there there may be an inquiry, if there is not yet direct investigation yet of PSA's subsidiary, it is still in discovery and too early to determine liklihood; allowing the company to take the generic "ordinary course" liability disclosure in its notes. Auditors and SEC would sign off as long as there is not enough information to determine the extent of the liability.

Would like to see the Q&A transcript for the Q if they have earnings calls. Is there any brokers that cover them?

Peter_Spaeth · #19 06-06-2019, 09:51 PM

https://www.nasdaq.com/symbol/clct/call-transcripts

Nunzio11 · #20 06-07-2019, 09:51 PM

Quote:

Originally Posted by joshuanip

From an accounting perspective, there is nothing needed to be disclosed, yet.

Deemed contingent liability, it needs to be recorded and disclosed if the liability meets more than likelihood possibility. Although there there may be an inquiry, if there is not yet direct investigation yet of PSA's subsidiary, it is still in discovery and too early to determine liklihood; allowing the company to take the generic "ordinary course" liability disclosure in its notes. Auditors and SEC would sign off as long as there is not enough information to determine the extent of the liability.

Would like to see the Q&A transcript for the Q if they have earnings calls. Is there any brokers that cover them?

The company is not covered by any major (or minor) sell side research firms. It�s just too small, illiquid and tightly held for an investment bank to research. The only company that covers it research wise is a general IR firm. Seeking Alpha will help get the word out but larger Wall Street firms typically take their view with a grain of salt.

steve B · #21 06-07-2019, 09:54 AM

Quote:

Originally Posted by Peter_Spaeth

Sorry. One of several requirements to maintain a class action is that common issues must "predominate" over individualized ones. Translated, that means roughly that you need to be able to establish liability towards the entire class by common proof and each plaintiff doesn't have to present his or her case. For example, everyone who bought the stock is injured if the company issued false financials and inflated the stock price. Each member of the class was hurt in the same way because the drug was inherently dangerous, or the car had a manufacturing defect.

But if the question is were people hurt because PSA failed to catch altered cards, or stiffed people on the guarantee, or was bad at grading, that feels to me like each and every person would have to show that on a case by case/card by card basis, even if there was an overall pattern. Just showing the pattern doesn't prove YOU were wronged. You would need to show that YOUR card was misgraded or altered or that YOU were stiffed on the guarantee. If that's the case, individualized issues "predominate" over common ones. If the case has to proceed as a boatload of mini-trials, it doesn't warrant class treatment.

Somewhat simplified but that is the idea.

Thanks!

Simplified is probably best for us non- lawyers...

Peter_Spaeth · #22 06-07-2019, 10:05 AM

Quote:

Originally Posted by steve B

Thanks!

Simplified is probably best for us non- lawyers...

Any time. People who don't know the law love to throw around the prospect of class actions but sometimes it isn't that simple.

Kenny Cole · #23 06-06-2019, 09:50 PM

Quote:

Originally Posted by Peter_Spaeth

I've been involved in some that are worse than the case parodied in Bleak House. I'd be interested to hear about a class action against PSA (other than for securities fraud by shareholders) that didn't have predominance issues. My gut reaction, admittedly biased from being on the defense side of these, is that when people talk about class actions and bandy about the prospect of class actions they don't usually understand the requirements.

If you are talking about a Fed. R. Civ. P. 23(b)(3) class, not in the context of a securities fraud claim, I think you might have commonality issues too, particularly in the 9th Circuit. If you could avoid that bullshit CAFA and keep it in state court, maybe. Only Oregon residents suing PWCC? I would think that PWCC has its principal place of business there so you might be able to avoid diversity. But what about the rest? IMO, fraud claims are just hard to get certified, having tried and failed a couple of times. Maybe breach of contract? Or, as Adam suggested, mass tort filings? I don't know. I'll stick to insurance bad faith and let you class action lawyers figure it out.

Peter_Spaeth · #24 06-06-2019, 09:53 PM

Quote:

Originally Posted by Kenny Cole

If you are talking about a Fed. R. Civ. P. 23(b)(3) class, not in the context of a securities fraud claim, I think you might have commonality issues too, particularly in the 9th Circuit. If you could avoid that bullshit CAFA and keep it in state court, maybe. Only Oregon residents suing PWCC? I would think that PWCC has its principal place of business there so you might be able to avoid diversity. But what about the rest? IMO, fraud claims are just hard to get certified, having tried and failed a couple of times. Maybe breach of contract? Or, as Adam suggested, mass tort filings? I don't know. I'll stick to insurance bad faith and let you class action lawyers figure it out.

Kenny yeah you might even get hung on 23(a) typicality. IMO, tough sledding to certify a class for the type of claims I am thinking about, other than 10b5 which, if the facts were there, would be easy. I think if you could get a bunch of plaintiffs together Adam's idea is a good one.

Peter_Spaeth · #25 06-06-2019, 10:05 PM

Quote:

Originally Posted by Kenny Cole

If you are talking about a Fed. R. Civ. P. 23(b)(3) class, not in the context of a securities fraud claim, I think you might have commonality issues too, particularly in the 9th Circuit. If you could avoid that bullshit CAFA and keep it in state court, maybe. Only Oregon residents suing PWCC? I would think that PWCC has its principal place of business there so you might be able to avoid diversity. But what about the rest? IMO, fraud claims are just hard to get certified, having tried and failed a couple of times. Maybe breach of contract? Or, as Adam suggested, mass tort filings? I don't know. I'll stick to insurance bad faith and let you class action lawyers figure it out.

I was thinking claims against PSA so California would be the state court venue.

Kenny Cole · #26 06-06-2019, 10:10 PM

Quote:

Originally Posted by Peter_Spaeth

I was thinking claims against PSA so California would be the state court venue.

Still the 9th Circuit. Same problems although the proposed class would probably be much larger. Just not seeing it on a consumer fraud claim.

Peter_Spaeth · #27 06-06-2019, 10:11 PM

Quote:

Originally Posted by Kenny Cole

Still the 9th Circuit. Same problems although the proposed class would probably be much larger. Just not seeing it on a consumer fraud claim.

Agreed.

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