Interesting thread on the non-sports board

[Wesley]

Originally Posted by buymycards

Here are my thoughts: (As if anyone cares)

1. Bidding on items that are consigned to your auction. Totally unethical. The auction house has the chance to inspect the items and make a purchase offer before they are placed in the auction. Once the auction begins, then it should be hands off.

2. Bidding on your own items that you consigned to an auction house. Totally unethical.

3. An auction house putting their own items in their own auction. OK, as long as they are disclosed as their own items.

4. An auction house bidding on their own items in their own auction. Totally unethical.

5. Employees of an auction house bidding on items in their auction. Totally unethical.

Rick

That pretty much sums up my thoughts as well, Rick. Whether it is spelled out in their policies or not, I am simply not comfortable with Heritage placing bids.

[calvindog]

Originally Posted by Wesley

That pretty much sums up my thoughts as well, Rick. Whether it is spelled out in their policies or not, I am simply not comfortable with Heritage placing bids.

Of course, you guys are right, but good luck finding a single auction company that is fully ethical and honest -- you simply will not. Finding one that does not break the law is difficult enough.

[E93]

"21. The Auctioneer or its affiliates may consign items to be sold in the Auction, and may bid on those lots or any other lots. Auctioneer or affiliates expressly reserve the right to modify any such bids at any time prior to the hammer based upon data made known to the Auctioneer or its affiliates."


The following scenarios are perfectly acceptable in a Heritage auction according to this rule as I understand it:

1. Chris Ivy can consign his own card. He can watch to see if any top all bids come in. When one comes in, with full knowledge of it, he can bid that person up to their maximum by stopping one increment short of the top all bid.

2. If no top all bid is placed, Chris can simply be an aggressive bidder in the closing minutes of the auction, continuing to artificially drive the price up, while watching who the other bidders (with knowledge of their previous bidding habits) are and how they are reacting. When it seems that his last bidding opponent won't go any further, Chris can simply withdraw ("modify") his last bid two seconds before the hammer falls, leaving the "underbidder" as the actual winner.

3. Chris can bid up a $1000 card of his own up to $4000, creating a new threshold of a "realized price" for that card. He can then re-sell the card in another format with that high number of a "price realized" on the record in places like VCP.


I don't know any of the folks at Heritage other than Peter (who I like) and have no evidence to suggest that they have done any of these things. But it seems reasonable to infer that they have these rules there for a reason. Chris Ivy suggested in this thread that they do not utilize the full powers of rule #21. If that is the case, why not change it. It leaves a terrible impression about the motivations and potential activities of the auction house. It makes me very uncomfortable bidding in their auctions.
JimB

[Wesley]

Maybe we will know soon enough whether Heritage's practices are legal or not. There is an ongoing lawsuit filed last summer in TX by a former Heritage employee or consultant that alleges shilling, bidding manipulation, RICO violations, etc. Who knows. It is possible their disclosures will be enough to protect them.

[ElCabron]

If it's so ethical to only bid on items in their own auction 7 days before they close, why not post a list of items they've bid on? That way, 7 days before any of their auctions end, potential bidders can go check this list to see if any of the items they're bidding on, or going to bid on, are being bidding on by the auction house.

Or would bidders then be less likely to bid on those items? Yeah, I guess that kind of transparency wouldn't be good for business.

-Ryan

[barrysloate]

While Chris himself may choose to hold his own actions to a high ethical standard, and not run up bids, Heritage's system would certainly allow a rogue employee to consign lots and then pull a lot of shenanigans during the auction. This is a horrendous policy. That said, they are the biggest collectibles auction house in the world, selling a few hundred million dollars worth of rare coins every year. Sports is a drop in the bucket. So something must be working for them.

[Rich Klein]

http://blogs.dallasobserver.com/unfa...age_auctio.php

As an aside, Sam Merten, who wrote this story for the Dallas Observer, used to work in the Beckett grading department and has a good knowledge of collectibles. I did not re-read the whole article or through all the comments; but I will later. There is no doubt that this is a fairly well balanced story and comments WERE well balanced and very interesting.

Rich

[jbsports33]

Interesting post, just not surprised by any of this, we have seen many issues come up in recent years and some how everyone is still in business. The policy for sure is to protect the consignor, but what about the buyer that has no knowledge about what lot may be getting bids from the house.

Jimmy

[calvindog]

I'm not here to defend Heritage, just trying to point out the hilarity of piling on them while defending Goodwin to the grave. Based on the following auctions, which occurred within months of each other I believe, I suppose Heritage's proclaimed shill bidding did not do much to help them with these auctions:

Heritage: D304 Young SGC 80 $17,925
Goodwin: D304 Young SGC 80 $80,053

Heritage D304 Mathewson SGC 70 $8,365
Goodwin D304 Mathewson SGC 60 $45,123

Imagine if Bill Goodwin was able to shill bid as per his published auction rules! Things could really get out of hand; I mean it would be legendary.

[PolarBear]

Originally Posted by Rich Klein

http://blogs.dallasobserver.com/unfa...age_auctio.php

As an aside, Sam Merten, who wrote this story for the Dallas Observer, used to work in the Beckett grading department and has a good knowledge of collectibles. I did not re-read the whole article or through all the comments; but I will later. There is no doubt that this is a fairly well balanced story and comments WERE well balanced and very interesting.

Rich

Wow, great article.

I couldn't believe the pseudonym of their in house "bidder", N.P. Gresham. Greg Rohan, the President of Heritage Auctions, says the N.P. is for "New Purchase" but claims he doesn't know the significance of Gresham.

I'm calling B.S. (Baloney Sandwiches) on that one. Heritage is primarily a numismatic (coin) based company. One of the widely known axioms in coin collecting is Gresham's Law. The use of it here is clearly meant to mock the bidding process. I'm shocked at the audacity.

No wonder he claims he doesn't know the significance of Gresham. That sure wouldn't come across too well in a lawsuit about shill bidding.

[Exhibitman]

Originally Posted by PolarBear

Wow, great article.

I couldn't believe the pseudonym of their in house "bidder", N.P. Gresham. Greg Rohan, the President of Heritage Auctions, says the N.P. is for "New Purchase" but claims he doesn't know the significance of Gresham.

I'm calling B.S. (Baloney Sandwiches) on that one. Heritage is primarily a numismatic (coin) based company. One of the widely known axioms in coin collecting is Gresham's Law. The use of it here is clearly meant to mock the bidding process. I'm shocked at the audacity.

No wonder he claims he doesn't know the significance of Gresham. That sure wouldn't come across too well in a lawsuit about shill bidding.

Don't misunderestimate Rohan. There's definitely something stinky in the potpourri at Heritage. I have to wonder how much of the $ I dropped there last year were bids against the house...