Kevin Keating responds to shill bidding allegations

[drcy]

I wouldn't bid on anything I authenticated for an auction house, but that's my personal rule. However, I'm not a dealer or even a collector, so it's not a hard rule to follow.

It does, however, say something if an authenticator is willing to buy what he okayed.

[vintagetoppsguy]

Kevin,

You say you did not know about the COC rule until last week. Who informed you of the COC rule, the government? And if the government knew about the COC rule and that you did no wrong, why did they include your name on the list in the first place?

[Jantz]

Originally Posted by vintagetoppsguy

Kevin,

You say you did not know about the COC rule until last week. Who informed you of the COC rule, the government? And if the government knew about the COC rule and that you did no wrong, why did they include your name on the list in the first place?

Not a jab at you David, just something for all of us to consider.

When was the last time our government got involved in anything that they didn't screw up?

That question is why I never posted in the thread about Leon's P&S.

It is also the same question that kept me from posting in the shill list thread.

[Spahn21]

Originally Posted by vintagetoppsguy

Kevin,

You say you did not know about the COC rule until last week. Who informed you of the COC rule, the government? And if the government knew about the COC rule and that you did no wrong, why did they include your name on the list in the first place?

Hi David (I presume?)--

Thanks for your question.

In short, yes, the government told us last week about the code of conduct (COC) and the fact that the inclusion of the 38 lots with my name was the result of Mastro-Legendary's violation of its COC, paragraph 2--which Mastro-Legendary was obligated to enforce. Had they enforced that rule, then my bids should have been prohibited; and had my bids been prohibited, then the end result, i.e., end sale price would not have been as high as it was for those lots (same impact as a shill bid) -- and so, for purposes of determining "loss values", which I am told was the purpose of Exhibit E, the end result -- a higher price to the buyer -- is the same whether the bid is shilled or a prohibited bid (like mine). But, 1) owing to the purpose of Exhibit E -- to assess the monetary damages to lot winners/buyers -- and 2) the fact that the document was intended for internal use only for the court (and not to be released), no distinction was made on the list between shill bids and bids like mine -- or at least the bids I made on those 38 lots which M-L should have prohibited ( I can't speak to bids assigned to others).

It is my understanding that document EE is now redacted, but I'm not positive on that.

Also, I did just issue a more lengthy post which I believe also answers your above questions and in more detail, too. But if not, or if you have others, please pass them on and I'll do my best to answer them.

Thanks, David--Kevin K.

[vintagetoppsguy]

Originally Posted by Spahn21

Hi David (I presume?)--

Thanks for your question.

In short, yes, the government told us last week about the code of conduct (COC) and the fact that the inclusion of the 38 lots with my name was the result of Mastro-Legendary's violation of its COC, paragraph 2--which Mastro-Legendary was obligated to enforce. Had they enforced that rule, then my bids should have been prohibited; and had my bids been prohibited, then the end result, i.e., end sale price would not have been as high as it was for those lots (same impact as a shill bid) -- and so, for purposes of determining "loss values", which I am told was the purpose of Exhibit E, the end result -- a higher price to the buyer -- is the same whether the bid is shilled or a prohibited bid (like mine). But, 1) owing to the purpose of Exhibit E -- to assess the monetary damages to lot winners/buyers -- and 2) the fact that the document was intended for internal use only for the court (and not to be released), no distinction was made on the list between shill bids and bids like mine -- or at least the bids I made on those 38 lots which M-L should have prohibited ( I can't speak to bids assigned to others).

It is my understanding that document EE is now redacted, but I'm not positive on that.

Also, I did just issue a more lengthy post which I believe also answers your above questions and in more detail, too. But if not, or if you have others, please pass them on and I'll do my best to answer them.

Thanks, David--Kevin K.

Kevin,

Thank you for the explanation. For what it's worth, I believe you. However, I don't think Hank's statement lent any credibility to your opening post for 2 reasons (1) the timing of his response and (2) that he prefaced his statement with "Kevin...doesn't need, nor has he requested, any support from me." Although he didn't say it, that sort of implies that you didn't know he was going to make his statement when actually the two of you collaborated together on it. Had Hank not posted, I never would have questioned your OP, but when Hank's (obviously prepared) statement immediately followed yours, it sure looks suspicious. Your statement could have stood on it's own without any help. Again, all that said, I do believe you and thank you again for coming on here and telling your side - it's a lot more than some people have done.

Regards,

David

[Hankphenom]

Originally Posted by vintagetoppsguy

Kevin,

Thank you for the explanation. For what it's worth, I believe you. However, I don't think Hank's statement lent any credibility to your opening post for 2 reasons (1) the timing of his response and (2) that he prefaced his statement with "Kevin...doesn't need, nor has he requested, any support from me." Although he didn't say it, that sort of implies that you didn't know he was going to make his statement when actually the two of you collaborated together on it. Had Hank not posted, I never would have questioned your OP, but when Hank's (obviously prepared) statement immediately followed yours, it sure looks suspicious. Your statement could have stood on it's own without any help. Again, all that said, I do believe you and thank you again for coming on here and telling your side - it's a lot more than some people have done.

Regards,

David

How could my post look suspicious to you when everything was laid out in it, including up front my very close relationship with Kevin? His reputation had been tarnished, and I wanted to vouch for him, simple as that. According to your way of thinking, it would have been less suspicious had I waited seven posts into the thread before coming in? That's exactly why I DIDN'T do that. And there was no "collaboration" on my statement, as you put it. Kevin never asked for it, nor did he ask for any changes to be made. I showed it to him primarily to get his input on my breakdown of the list into different categories of offense, not in any way to get his approval of my comments about him. "Kevin...doesn't need, nor has he requested, any support from me" is the truth, nothing more or less complicated than that.

[vintagetoppsguy]

Hank, I certainly didn't mean that as a personal attack on you. Simply put, the truth can stand on it's own - it doesn't need confirmation.

I understand why you did it, he's your buddy. The timing of your post just looked suspicious as it was a prepared statement.

[h2oya311]

Kevin -

Thanks for coming forward with a logical explanation for your inclusion on "the list". Any other COC Paragraph 2 "offenders", please feel free to jump in now that Kevin has paved the way...perhaps Kevin's situation is unique, but there are still many on the list that have remained silent.

Kudos to Kevin and his lawyer for good detective work. I hope you are able to get something in writing from the U.S. Attorney's Office to make your defense iron-clad.

[slidekellyslide]

Originally Posted by vintagetoppsguy

Hank, I certainly didn't mean that as a personal attack on you. Simply put, the truth can stand on it's own - it doesn't need confirmation.

I understand why you did it, he's your buddy. The timing of your post just looked suspicious as it was a prepared statement.

It did not look suspicious to me since he had posted that more info was coming soon in the other thread. I just assumed he had it ready to go and was waiting for the right time to release it.

[whitehse]

Originally Posted by vintagetoppsguy

Hank, I certainly didn't mean that as a personal attack on you. Simply put, the truth can stand on it's own - it doesn't need confirmation.

I understand why you did it, he's your buddy. The timing of your post just looked suspicious as it was a prepared statement.

When I saw Hank's response my mind went back to his cryptic message on the "other" thread about more information to come and assumed he was finally saying what he knew to be true but could not do so before. I never gave one single thought as to how quickly he posted because I just assumed he had that all pre-written anyway which was no big deal.

I, for one am happy he posted because I would have been left hanging wondering what this additional information he indicated would be coming out of this mess really was.

[bcawly]

I sent the following email to Kevin Keating on February 9 after a review of Exhibit E and his response to the matter. Exhibit E standing alone does not disclose how the government's investigation confirmed collusion among specific parties to shill bid, it does clearly show the conflicted inter-party transactions that exist between the auction houses and those that do business with them.

There is the need for more transparent and verifiable auction practices and controls to detect and prevent shill bidding along the line I presented in my email to Kevin Keating that follows. It is my opinion, that there is a clear need for the major auction firms to step up and address this issue to ensure the integrity of their business practices. I stand behind my comments to Mr. Keating.

Bob Cawly



Re: Mastro-Legendary Auction's Shill Bidding Report Response
From Robert H. Cawly
To qualityautographs qualityautographs@msn.com

Kevin

Just let me say that after reviewing Exhibit E, it appears to me that you were also a victim of the shill bidding and that your bidding patterns were customary with many dealers and collectors that desire to take an early position on a number of lots to hold a place in extended bidding. In any event, the infraction is one of RELATED PARTY TRANSACTIONS which make you ineligible to bid. The more appropriate classification would be "Bids by Ineligible Bidders" as opposed to calling them all shill bids.

While the effect is the same as placing a shill bid, the implications are completely different. All reputable auction houses should post a list of Related Parties and make known the Related Party Policies which would include auction house employees, and employees of subcontractors, authentication firms and other related companies.

The real issues reside with the business practices of the auction firms. It is up to the auction house to enforce its own rules, not the bidders. The prudent auction house would have each auction overseen by an well known and reputable independent accountant that would oversee the bidding process, and audit the auction records. This one step would clearly establish what auction firms are interested in restoring honesty and integrity to our hobby and care about their firm's credibility. The expense of such a process would clearly be affordable and a sound investment.

Knowing of your credentials and reputation for integrity from people in the industry and notably fellow UACC members, let me express my full confidence in your response in this matter.

Robert H Cawly, CPA
UACC RD326

[Runscott]

Originally Posted by drcy

It does, however, say something if an authenticator is willing to buy what he okayed.

It says something if he is willing to bid it up.

Higher prices make the authentication company look better. Given all the people who shilled the Mastro auctions for monetary gain, I don't understand why it is implausible that TPA employees would shill up their company's authenticated items for the same reason.

[drcy]

Higher prices make the authentication company look better. Given all the people who shilled the Mastro auctions for monetary gain, I don't understand why it is implausible that TPA employees would shill up their company's authenticated items for the same reason.

I actually hadn't thought of that angle. But, as I said, my personal rule is I wouldn't bid on anything I authenticated-- to steer way clear of any perception or even misperception of conflict of interest or whatever. That you were able to just come up with a new reason I hadn't thought of why not to bid is exactly why I wouldn't bid.

I think the entire authentication and grading aspect of the hobby is messed up on many fronts, which is why I don't participate in that. I used to write a few LOAs here and there (not suggesting there was great demand) and almost solely for collectors, but quit. That's no commentary on Kevin, as I have no special insight on his situation and have no reason to doubt what he says-- and I've never dealt with autographs. I just think that the ways things are set up, and the expectations of the hobby visa vie people giving opinions, is mixed up.

I did archiving for a historical museum and discovered they had no interest or knowledge what items were worth and had never sold a thing. The executive director was surprised when I pointed out that some of their items had market value, and another person there said she didn't think they were even legally allowed to sell anything. All they cared about was the items being accurately identified and described for their records. How refreshing, I thought. The museum's archiving system had its own set of annoying peculiarities, but maximizing resale value wasn't one of them.

[Runscott]

Originally Posted by drcy

I actually hadn't thought of that angle. But, as I said, my personal rule is I wouldn't bid on anything I authenticated-- to steer way clear of any perception or even misperception of conflict of interest or whatever. And marketing has never been my strong point

Your integrity is why your name isn't on any shill lists.

[drcy]

A funny story from the museum is I was cataloging a bunch of photos (a painstaking process at a museum) and at the end of the day I asked the head archivist if I could take them home with me to continue work on them at home. She said "I've worked at museums for twenty five years, and you're the first person to ever ask that question." She said she didn't know what was the rule, but said that if I had taken them home and returned with them the next day probably no one would have noticed.

Another funny story is the head archivist was 76 and, shall we say, not computer savvy. I was researching several mystery donations and she was amazed at all the information I found out about them. She said "How'd you get all that information?" and I said "Wikipedia."

[ErikV]

I'm a little confused as to why Kevin is taking any heat at all. Here it's become
clear that M+L has been running a scandalous operation. They have been found
guilty in a court of law and are being sentenced for their crimes. On the other hand,
Mr. Keating has been forthright in wanting to clear his name. He's emailed all of his
customers (I also received his email) explaining his side of the story. He's come on
the board and has answered all questions presented to him. Between M+L having
the reputation and court conviction of criminal activity, their word is worthless.
It would not surprise me that they did something like this behind a customers back.
In M+L "poisoning the well" along with having several prior dealings with Mr. Keating,
this is slam-dunk case for me. I believe Mr. Keating 100%.

ErikV

[Spahn21]

Yesterday, I released two statements. One is posted here, and the other was sent to my email-subscriber (E-S) list.

The “guts” of both are the same, though I necessarily provided more background information to my E-S list knowing that many there would be reading this story for the first time, and necessarily needed greater context.

I made my last posts on Net 54 at around 2:00 am this morning before finally going to bed. Now that I am up again with some coffee in me, I have re-read those posts, and I want to clarify one thing.

Where I say:

"My lawyer has advised me that I do not need a written statement because the U.S. Attorney's Office in charge of the case approved my statement last week."

I am referring to this statement:

“The U.S. Attorney’s Office has confirmed that it has absolutely no evidence that I shill bid on any item, and that these 38 lots were added to EE because M-L violated its own publically released rules (COC, paragraph 2) by their acceptance and inclusion of my bids on items they knew were owned by M-L, a M-L employee or a M-L affiliate – and not because of any wrongdoing by me.”

I was NOT referring to the full body of the Net 54 post or the email that I sent to my E-S list. I realize that this clarification is unnecessary for most, but I want to be crystal clear to everyone, as to what exact "statement" I am referring to.

[brob28]

Originally Posted by Spahn21

Yesterday, I released two statements. One is posted here, and the other was sent to my email-subscriber (E-S) list.

The “guts” of both are the same, though I necessarily provided more background information to my E-S list knowing that many there would be reading this story for the first time, and necessarily needed greater context.

I made my last posts on Net 54 at around 2:00 am this morning before finally going to bed. Now that I am up again with some coffee in me, I have re-read those posts, and I want to clarify one thing.

Where I say:

"My lawyer has advised me that I do not need a written statement because the U.S. Attorney's Office in charge of the case approved my statement last week."

I am referring to this statement:

“The U.S. Attorney’s Office has confirmed that it has absolutely no evidence that I shill bid on any item, and that these 38 lots were added to EE because M-L violated its own publically released rules (COC, paragraph 2) by their acceptance and inclusion of my bids on items they knew were owned by M-L, a M-L employee or a M-L affiliate – and not because of any wrongdoing by me.”

I was NOT referring to the full body of the Net 54 post or the email that I sent to my E-S list. I realize that this clarification is unnecessary for most, but I want to be crystal clear to everyone, as to what exact "statement" I am referring to.

Kevin,

I know you're not asking for advice but I really think you should have another discussion with your attorney about getting something in writing from the DA. I do not know you, and I'm sure like many have posted your a man of integrity - that being the case I would work tirelessly to get something in writing that proves my innocence if I were you. Not saying your story is not true, but if I were on that list for the reasons you are I would want something better than my attorney saying I don't need something in writing, after all doubts could affect your future business. Conversely, if I were on this list (I'm not) and had shilled, I would now use the same or similar reasoning you did particularly if people in the hobby accepted an explanation without proof. Again, not attacking but I cannot understand why & think its a mistake for you to not get something in writing.

[batsballsbases]

Kevin,
Thankyou for your post it does clear up some points as to why your name appears 38 times on the list. So far you are one of the few that at least has a believable explanation. I hope all works out for you ....