New lawsuit accuses PWCC of massive shill bidding

[samosa4u]

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Sports card marketplace Alt filed a lawsuit against former auction house PWCC — now owned by Fanatics — alleging fraud and breach of auctioneer’s duty, according to a lawsuit filed Wednesday in New York Supreme Court.

The complaint alleges PWCC conducted a widespread, years-long scheme of shill bidding, using internal and external actors to artificially inflate auction prices for high-value sports trading cards. Alt alleges PWCC retained access to confidential maximum bid information to drive up prices and mislead buyers.

Alt is asking for at least $13.7 million, which is the total losses the company estimates it sustained attributable to PWCC’s alleged fraudulent conduct. Alt is also seeking additional compensation for punitive damages.

Between 2021 and 2023, Alt said it spent more than $10.7 million on PWCC’s platform while winning 707 auctions and obtaining 809 items. In late 2023, Alt alleges to have learned that PWCC’s leadership knew about shill bidding and directly encouraged and allowed other external parties to place fake bids on certain auctions, boxing out the authentic bidders and artificially inflating prices.

Alt also alleges that PWCC flagged when high net worth bidders, such as Alt, were participating in PWCC auctions, and arranged, solicited and encouraged shill bids to increase the bidding.

“For years, customers around the world trusted PWCC’s assurances that when they made a bid on a sports card on their site, that those transactions were fair, transparent and free from manipulation — today’s complaint shows that those assurances were patently untrue,” Alt CEO Leore Avidar said in a statement to The Athletic. “PWCC’s leadership knowingly engaged in fraudulent practices, inflating auction prices and skewing the fair market value for the entire collecting community, including against one of its biggest competitors, Alt.

“This lawsuit is about more than just one company, it’s about ensuring the integrity of the trading card market as a whole and holding bad actors accountable.”

A PWCC spokesperson said both sides had conducted discussions for months before Wednesday’s lawsuit, including evidence for Alt’s claims. The spokesperson said Alt provided none and this is attempt at a “payday.”

“Alt has filed a completely baseless lawsuit against PWCC that lacks any substantive evidence,” the spokesperson said. “Even though the accusations they are claiming occurred before PWCC changed ownership in May 2023, we carefully looked into their allegations and found zero evidence to support their claims.”

This isn’t the first time PWCC has been accused of shill bidding. Leading online marketplace eBay suspended PWCC from selling items on its platform in August 2021 after eBay determined PWCC had engaged in shill bidding on auctions.

“eBay’s policies and standards were designed to ensure a trusted marketplace where our community can transact with confidence,” eBay said in a statement sent to customers in 2021 when explaining the PWCC ban. “If we determine that a buyer or seller is not acting in good faith, eBay takes this seriously and takes action.”

PWCC began its own auction platform after the eBay ban. Fanatics announced the purchase of PWCC in May 2023. The company launched its own auction platform, Fanatics Collect, replacing the PWCC brand soon after its launch in July 2024.

In the lawsuit filed Wednesday, Alt claims that PWCC “engaged or was complicit” in bid manipulation in auctions that included the following cards Alt purchased through PWCC:

- 2017 Panini Prizm Patrick Mahomes Gold rookie card, numbered to 10, Professional Sports Authenticator (PSA) grade 10: $528,000
- 2003 Exquisite Collection Kobe Bryant Limited Logos patch auto, numbered to 99, PSA 10: $360,000
- 2018 Panini Prizm Josh Allen Gold Vinyl rookie, numbered to five, PSA 10: $264,000


Alt also questions the legitimacy of a PWCC auction surrounding the Luka Dončić 2018 National Treasures Logoman patch autographed one-of-one BSG 9 graded rookie card that sold for $3.12 million in 2022. The same card sold in a private sale for $4.6 million in March 2021, via Card Ladder.

Alt dropped out of the bidding for the card, but alleges “(a) a member of Group 1 (a group of approximately six individuals Alt alleges fraudulently and collusively bid up items in PWCC auctions) was the seller, and other members of Group 1 submitted shill bids to drive up the price of this card, (b) the winning bidder did not complete the auction sale by paying the winning price to PWCC, (c) PWCC nevertheless publicized this ‘sale’ as if it had actually been consummated, and (d) PWCC discussed with members of Group 1 a private sale at a different price from the ‘winning’ auction price.”

[Peter_Spaeth]

Thank you did not realize the story was behind a paywall.

[Peter_Spaeth]

In case anyone is interested.
https://iapps.courts.state.ny.us/nys...JTmduWtbJ6hA==

[raulus]

Favorite passage so far:

The frequency with which other bidders matched or closely approached Alt’s maximum bids was especially unlikely in legitimate auctions because, during that time period, Alt had idiosyncratic incentives to acquire inventory to jump start its own marketplace, which led Alt to submit maximum bids that it considered abnormally high.

Translation:

We were doing stupid stuff and bidding like drunken sailors because we had our own monetary reasons for wanting to rip other people off ourselves. The fact that we weren't winning everything hands down with our stupid bids is a clear sign that the fix was in!

[Peter_Spaeth]

4. Alt also came to learn that PWCC solicited, assisted or facilitated bid
manipulation by a group of individuals who fraudulently and collusively bid up items in PWCC
auctions. PWCC sought bids from the members of this group, and did not enforce PWCC’s
stated policies, such as its policy that non-payment for items won in an auction would result in a
ban from participation. PWCC’s deliberate actions and/or inaction fostered a corrupt auction
market culture where fraudulent or unethical conduct did not result in any consequences.

[Peter_Spaeth]

22. Alt was informed that PWCC, including its CEO and another senior
executive, had access to maximum bids submitted by Alt and others despite PWCC’s
representation that maximum bids were “private and … only viewable by the client that
submitted the bid.”
23. Alt was also informed that PWCC, which “financially pre-qualified”
bidders for its premier auctions, flagged to its personnel when high net-worth bidders such as Alt
were bidders in PWCC auctions, and, on many such occasions, arranged, and/or solicited shill
bids to drive up the auction price. Alt learned that PWCC’s senior executives communicated
within PWCC that a high net-worth bidder’s participation in auction bidding presented a golden
opportunity to set a new record comp or sales price.
24. Alt was informed that PWCC arranged or solicited shill bids from both
internal and external sources. Alt learned that certain accounts that submitted bids in (but did not
win) PWCC auctions had identifiers indicating that the bids came from within PWCC, despite
PWCC’s representation that “[a]ll employees are prohibited from bidding on PWCC Auction
items.”

It will be VERY interesting to see who Alt's source is (or sources).

[Eric72]

A Josh Allen card sold for more than a quarter million dollars.

Damn, those were crazy times.

[Exhibitman]

Originally Posted by raulus

Favorite passage so far:

The frequency with which other bidders matched or closely approached Alt’s maximum bids was especially unlikely in legitimate auctions because, during that time period, Alt had idiosyncratic incentives to acquire inventory to jump start its own marketplace, which led Alt to submit maximum bids that it considered abnormally high.

Translation:

We were doing stupid stuff and bidding like drunken sailors because we had our own monetary reasons for wanting to rip other people off ourselves. The fact that we weren't winning everything hands down with our stupid bids is a clear sign that the fix was in!

[Balticfox]

Originally Posted by raulus

Favorite passage so far:

The frequency with which other bidders matched or closely approached Alt’s maximum bids was especially unlikely in legitimate auctions because, during that time period, Alt had idiosyncratic incentives to acquire inventory to jump start its own marketplace, which led Alt to submit maximum bids that it considered abnormally high.

Translation:

We were doing stupid stuff and bidding like drunken sailors because we had our own monetary reasons for wanting to rip other people off ourselves. The fact that we weren't winning everything hands down with our stupid bids is a clear sign that the fix was in!

Precisely!

Originally Posted by jayshum

Isn't this a civil case instead of criminal?

Which is why I think this should be a criminal case or no case at all. I can't sympathize with the idiots at Alt, but shill bidding is a criminal offense. So that's the way it should be tried.

[Peter_Spaeth]

Originally Posted by Balticfox

Precisely!



Which is why I think this should be a criminal case or no case at all. I can't sympathize with the idiots at Alt, but shill bidding is a criminal offense. So that's the way it should be tried.

Lots of crimes can also be the basis for private civil fraud or other causes of action, I don't follow your logic. Two completely separate animals.

[Balticfox]

Originally Posted by Peter_Spaeth

Two completely separate animals.

Yes, but I don't think that should be the case. I don't like this business of civil liability if there's no criminal conviction. I don't like it at all. It's opened the door for all kinds of abuses, all kinds of shysters, all kinds of legal shenanigans.