Heritage Auction

[gordonanalytic]

In late March of 2010 I purchased a 1953 NY Yankees team signed baseball on ebay. The seller sent me a note from Mike Gutierrez at Heritage. Mike said that the Mickey Mantle signature on the ball was good. Mike used to work for PSA. He placed a dollar value on the ball. He offered to sell the item. The first week of April I mailed the ball to Heritage. Last week, Chris Ivy at Heritage said that PSA and JSA could not verify the Mantle signature. I showed him the note from Mike Gutierrez. Chris said "That was just an opinion. If you escalate the matter then we will not do any business with you."

[HRBAKER]

PSA/DNA and JSA is just an opinion too.

[ss]

so folks can let you know their opinion.

[gordonanalytic]

When I get the ball back from Heritage. It should be this week.
These people can pick and choose who they want to do business with... but the arrogance is astounding.

[gordonanalytic]

Also they blocked my IP address so that I cannot log onto their website anymore

[HRBAKER]

There's auction houses aplenty, no reason to put up with this. I am sorry this happened. How exactly did you escalate this? Thanks for bringing it to our attention, not sure if that qualifies for escalation.

[HRBAKER]

Also they blocked my IP address so that I cannot log onto their website anymore

They've taken their ball and gone home.

[DJR]

.

[Heritage Sports]

The official Heritage policy is to avoid being dragged in to protracted bulletin board conflicts, but, just this once, we’ll dispense with tradition. I’ll try to keep it brief and hopefully clarify a few of the main issues here.

First, to address the original poster’s comments, there are a few facts which were rather conveniently left out of his commentary. We have counted his emails to Heritage over the past six months. The total: over 120, just to the director of the Sports department alone. We obviously cannot count the telephone calls during this time, but it’s in the dozens. Once he began to harass our executive team, which oversees over $600 million in annual sales, we made a simple business decision that we couldn’t afford to maintain the relationship. Think about it—we have over half a million registered members. Imagine if every one of them was such a drain on resources. The endless emails and phone calls to our Chairman on the topic the original poster discusses represented the final straw, not the cause. There have been other issues with this client as well, but there is no need to elaborate to the public on this.

We’re more troubled, however, by the ongoing mischaracterization of Heritage house bids as shill bidding, as it is far more potentially harmful than one disgruntled client with an abundance of free time. The distinction is so clear to us, and to most people within the hobby, that perhaps we have failed to spell it out in its simplest terms. So, if you’ll allow me, here is the difference between Heritage’s policy of placing house bids, and the illegal practice of shill bidding:

1) Placing house bids in one’s own auction. This is what Heritage does. We place bids on material at the price we would be willing to pay if someone came up to our table at a card show wanting to sell. This is done a week before the auction closes, long before the competitive final bidding has even begun. We bid in our competitors’ auctions as well. We win very little because we only bid wholesale prices.

2) Shill bidding. This is done to intentionally raise the bid price on consigned lots, and done with no interest in actually buying the lot. It is done after serious bidding has begun, not before. Heritage does not do this. Again, we place no bids in the final week of the auction, and we never have any knowledge of what the left/absentee bids are.

3) House owned items. Heritage does own some of the material in our auctions, typically less than 10% of the material. If Heritage places a bid on an item that Heritage owns, then it shows up as a reserve on the item, not a bid.

Everybody loves a scandal, we understand, but putting a $1700 bid on a $4000 Babe Ruth autograph a week before an auction closes just isn’t going to qualify. Please don’t hesitate to ask questions if this distinction isn’t as simple as most people believe it is.

[glchen]

I don't think Heritage has addressed the question on whether an employee at Heritage guaranteed authentication on a ball on ebay.

Second, the house bids are really shady. I bid frequently at Heritage, and I never knew about this. To me, this is still shill bidding. They should change this to a reserve price if they wanted to be in the clear.

Heritage used to be in the top tier of auction houses in my opinion, especially because of their volume and their great website, which is probably the best of all auction houses. They've dropped to the 2nd or 3rd tier now.

[slidekellyslide]

Everybody loves a scandal, we understand, but putting a $1700 bid on a $4000 Babe Ruth autograph a week before an auction closes just isn’t going to qualify. Please don’t hesitate to ask questions if this distinction isn’t as simple as most people believe it is.

Then why do it at all? This rule continues to confuse and anger people so I'm not sure why you don't just start the Ruth auto at $1700 and you don't have to worry about accusations of shilling.

[oriolesbb6]

I would also like the issue addressed on the note or lack there of? Secondly, how many emails are appropriate when a customer has questions or concerns? Lastly, agreed-reserve the items-in house bidding represents a touchy subject-if you are pushing an item up to a certain amount then isn't that intentionally running up an item-whether at the beginning or end of an auction.........

[HRBAKER]

Factoring out whether the whole concept is good or bad, acceptable or unacceptable, etc.; does the explanation intuitively follow to a bidder from reading the rule in the auction catalog? Also as stated it doesn't seem to me to limit the house to the strictures stated above.

[Leon]

Folks in this thread will not be able to remain private. Just a heads up....

[sports-rings]

I have to word this response very carefully. I too have lost a lot of respect for Heritage during the last couple of years.

I was concerned about one of their consigments in an auction this year and I mentioned to them I wanted to discuss this item on this board. I was told that if I did this, I was opening myself up to a lawsuit for liable. I won't go into the details of this situation but I was warned not to discuss this matter. So I never posted my concerns on this board.

Furthermore, a couple of years ago, I tried to purchase an item from the family of an old-time ball player. I thought we had a done deal but the family decided to sell the item to Heritage. It wound up in their catalog without any disclosure that it was owned by them.

[barrysloate]

Jonathan- if Heritage bids so low that they virtually never win anything, why conduct this practice at all? On the positive side you win virtually nothing and accomplish little; on the negative side you create a great deal of suspicion and a boatload of bad will, since nearly 100% of your customers would likely hate this practice.

I believe you when you say it is done a week before the auction closes, and I understand the distinction you make between placing early bids and shilling. But how could Heritage risk the reputation it has built over decades, with the only thing to show for it is a few stray lots that slip between the cracks?

Sounds like the risk far outweighs the reward.

[Matt]

Also, I'm not sure I follow the distinction he makes - the difference between this and shilling is that these bids come in before competitive bidding starts and shill bidding takes place after? Before/After the start of "competitive bidding is an imaginary line.

[HRBAKER]

Is the conventional wisdom and the borne out experience of auctioneers regardless of field that starting an item with an opening bid of the lowest acceptable amount for a lot as oppposed to a low opener with a hidden reserve stifling to participation and routinely results in lower amounts realized for lots?

That would be interesting to know if it was possible to draw a hard conclusion. I am assuming it would have something to do with the psychology of the bidding/have to win process.

Sorry for the wordy question.

[sago]

There is always the chance for impropriety if employees can bid, consign, etc. for the auction house where they work.

If it's that important or necessary for employees to consign an item, or for Heritage to both buy and broker the sale of items, then have a separate section in your catalog for those lots. Since it's such a simple concept that most people already understand, I'm sure the employee and Heritage lots would do just as well.

From HA.com
21. The Auctioneer, its affiliates, or their employees 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 Auctioneer may extend advances, guarantees, or loans to certain consignors.

22. The Auctioneer has the right to sell certain unsold items after the close of the Auction. Such lots shall be considered sold during the Auction and all these Terms and Conditions shall apply to such sales including but not limited to the Buyer’s Premium, return rights, and disclaimers.

My question on HA 21: Heritage employees and the house itself are allowed to bid on the same lots they consign. Perhaps a clarification such as "up to and including the pre-determined reserve amount" would help eliminate some shill bidding questions, and possibilities.

My question on HA 22. "Such lots shall be considered sold during the Auction": Is this the Heritage equivalent of a lot being "passed"? If so, is the final price indicated in the HA archives as sold, thereby skewing the sales results for the item?

I'm not sure if these questions will get answered, but here they are.

David Davis

[DJR]

.

[thekingofclout]

The distinction is so clear to us, and to most people within the hobby, that perhaps we have failed to spell it out in its simplest terms. So, if you’ll allow me, here is the difference between Heritage’s policy of placing house bids, and the illegal practice of shill bidding:



Is it just me, or does anyone else feel the blatant condescending tone in this statement?

[perezfan]

Jonathan- if Heritage bids so low that they virtually never win anything, why conduct this practice at all? On the positive side you win virtually nothing and accomplish little; on the negative side you create a great deal of suspicion and a boatload of bad will, since nearly 100% of your customers would likely hate this practice.

I believe you when you say it is done a week before the auction closes, and I understand the distinction you make between placing early bids and shilling. But how could Heritage risk the reputation it has built over decades, with the only thing to show for it is a few stray lots that slip between the cracks?

Sounds like the risk far outweighs the reward.

This question from Barry was well articulated, and really cuts to the heart of the matter.

I will be eager to hear the response from Heritage, as it really seems "the juice ain't worth the squeeze" :confused:

[RichardSimon]

The thing I find probably most annoying in this whole mess is that Heritage will not stand behind their employee, Mr Gutierrez. What is the point of having executive employees rendering opinions on authenticity if the auctioneer won't stand by that opinion.
I guess they really have no intent to stand behind their employees. How can you have faith in an auction house that operates in this manner?
---

[barrysloate]

Didn't Jonathan say please don't hesitate to ask a question regarding this matter? I asked a question, but it was never answered. And I even asked it politely, I think.

[RichardSimon]

Didn't Jonathan say please don't hesitate to ask a question regarding this matter? I asked a question, but it was never answered. And I even asked it politely, I think.

Barry, maybe they thought you were asking a question that was rhetorical?
Nah,,,,
--

[Rob D.]

Didn't Jonathan say please don't hesitate to ask a question regarding this matter? I asked a question, but it was never answered. And I even asked it politely, I think.

He also wrote that Heritage's policy "is to avoid being dragged in to protracted bulletin board conflicts." If you really want an answer to your question, I'm sure you can call Heritage or e-mail Jonathan.

[barrysloate]

Rob- I was figuring that someone higher up at Heritage told him to not post on Net54, and I understand that. I don't need to call him, just thought I would continue the conversation here.

[Rob D.]

Oh, OK. I thought you were actually seeking an answer to a question. My bad.

[TCardFan]

http://img831.imageshack.us/img831/5250/net54banner0.gif

A protracted banner for a protracted bulletin board?

[Leon]

http://img831.imageshack.us/img831/5250/net54banner0.gif

A protracted banner for a protracted bulletin board?

Can you explain what your comment means? They do advertise on the board. I trust Heritage implicitly too. As for bidding in their own auctions that is their call. I am sure they appreciate the extra banner ad too, so thanks in advance for that. BTW, Tcardfan, we have more space available if you would like to buy a banner?

[Jim VB]

http://img831.imageshack.us/img831/5250/net54banner0.gif

A protracted banner for a protracted bulletin board?



Good to see that another new board member has figured everything out in 7 posts or less.

Now if he would only explain it to the rest of us in post #8.

[glchen]

I'm assuming he was trying to make a funny wordplay on Heritage's comment that their official policy was to avoid getting into protracted bulletin board conflicts.

[HRBAKER]

Went right over my head, I must have missed the funny part. Oh well.

[autograf]

You're slow like that HR..............

[Leon]

I will admit I am always a bit suspicious of things on the board. That being said I have called Tcardfan twice on the phone and it is a very automated voicemail system. Until he and I speak he won't be posting anymore. I have sent him an email too. I am sure Peter Nash came on the board before, using an alias, and my goal is not to dissuade any comments, positive or negative, but to keep it legitimate. As a matter of fact, if Peter Nash wants to come on the board as himself, well, I guess that would be ok. I think he would have a lot of 'splainin to do, about certain circumstances, but it's his call. What I will try my best to do is make sure everyone is who they say they are. As long as Neal (Tcardfan) calls me back and we speak, then all we be good and he can post again. I just have a feeling I might not be getting that call. If he does, then I will come back and say that we spoke, I am satisfied and all is good. This has 0 to do with him saying anything about an advertiser. They, I, and anything else is fair game. best regards

[HRBAKER]

You're slow like that HR..............


Must be all the Wild Turkey I had while living in Kentucky. :D

[DJR]

.

[3and2]

Everybody loves a scandal, we understand, but putting a $1700 bid on a $4000 Babe Ruth autograph a week before an auction closes just isn’t going to qualify. Please don’t hesitate to ask questions if this distinction isn’t as simple as most people believe it is.

I do appreciate Heritage being specific in how they bid on items during auctions, however, I don't fully understand the reason for them to do this. If Heritage didn't bid on the Babe Ruth item ($1700) the week prior, then what would it sell for? $2500, $3,000..how much do they think?

Perhaps, Heritage feels bidders need a little push to keep the bidding going, by placing a few bids here and there. If this is the case I really don't think that is fair to the other bidders. I know that auction houses just can't let an item go below market value, however, If your auctioning premium items then it will realize a premium price.

Basically, heritage bidding on the items seems disrespectful to the collector. I'd be interested to hear what they have to say...

[calvindog]

I don't like what Heritage does with their bidding on lots but it's open and transparent and legal. In the scheme of things, this is as good as it gets in the auction world. I do think that the condescending tone is really uncalled for, however. Why are auctioneers so condescending? You'd think they'd just invented the AIDS vaccine or something.

[David Atkatz]

I'm not condoning Heritage's actions, but I think you guys are misinterpreting. HA is not trying to "bid the item up" for the consignor; rather they're hoping to win an item or two for themselves at a low price. What have they to loose? Place a lowball bid on a large number of pieces, and perhaps one will be overlooked and they'll win. That's why they place bids in their competitors' auctions as well.

[calvindog]

David, if that's all it is then I agree, there's nothing done wrong. I think the concern is that the bids will be placed further along in the auction. Is there any way to determine when the Heritage bids are placed? Either during or after an auction?

[David Atkatz]

They say they only bid up to the beginning of the last week.

[calvindog]

Well, if that's what it is, what is the harm (or even purpose) of that? The evils of shill bidding usually are contained within the near end of an auction, unless a ceiling bid is run up early on. As Barry noted above, it seems really innocuous -- so why do it at all? Just opens them up for unwarranted criticism.

[Heritage Sports]

Greetings all. I know everyone has been awaiting a Heritage response, and I hope you’ll all understand that, this being the absolute last day of proofing before sending our November Signature Auction catalog to the printer, we’ve all been otherwise heavily engaged.

It’s tough to know where to start.

The thing I find probably most annoying in this whole mess is that Heritage will not stand behind their employee, Mr Gutierrez. What is the point of having executive employees rendering opinions on authenticity if the auctioneer won't stand by that opinion.

I guess I’ll begin with the notion of a Heritage employee “guaranteeing authenticity” of an autograph. It’s an easy place to begin, as it is simply not accurate. Heritage is not an authentication firm. We do not issue letters of authenticity for autographs, and we do not charge for our opinions. We employ third party experts to authenticate our autographs, both PSA/DNA and James Spence, the most widely respected experts in the field. I’m not entirely certain whether or not some members of this board believe, if a Heritage employee offers his personal opinion on a piece (which we all do dozens of times a day, hundreds of times a month) that Heritage should be held somehow financially accountable for that free opinion in the event of a mistake. If that were the general assumption I suppose Heritage would need to rethink supplying this complimentary service. But I have to believe that the vast majority of hobbyists are more reasonable than that.

Jonathan- if Heritage bids so low that they virtually never win anything, why conduct this practice at all? On the positive side you win virtually nothing and accomplish little; on the negative side you create a great deal of suspicion and a boatload of bad will, since nearly 100% of your customers would likely hate this practice.

I believe you when you say it is done a week before the auction closes, and I understand the distinction you make between placing early bids and shilling. But how could Heritage risk the reputation it has built over decades, with the only thing to show for it is a few stray lots that slip between the cracks?

Sounds like the risk far outweighs the reward.

As to the tangential issue of house bids, it is an interesting dilemma that the policy could be misconstrued. It’s heartening that many of you appear to understand the difference between placing early house bids at wholesale prices Heritage would be willing to pay, and late shill bidding intended only to make a winning bidder pay more. But since it’s clear that the entirety of the hobby doesn’t fully grasp the distinction, it’s worthy of further consideration. We will revisit this policy, and perhaps it will be changed. As I am not a member of the executive team, I couldn’t promise any more than that. It is interesting to note however that when consignors have raised the issue of house bids in our auctions, we let them know that if they would prefer that we not place any bids on their items, then we can certainly comply with that request on their lots. Interestingly, we have yet to have anyone make that request.

“Also, I'm not sure I follow the distinction he makes - the difference between this and shilling is that these bids come in before competitive bidding starts and shill bidding takes place after? Before/After the start of "competitive bidding is an imaginary line.”

The issue is not when the bid was placed, although placing the bid early without knowledge of any other bids on the item is an important distinction, the real issue is the intent. We are placing a bid at which we are willing to pay for the item. Shill bidders are bidding on material with no intention of winning or paying for the item, simply with the intention of pushing up the prices. If we win the item, then we pay for the item with the buyer’s premium included and most importantly: The consignor is paid for the item at settlement.


1910 T229 Pet Cigarettes Chas. Willard SGC 60 EX 5
Oct 1, 2009: $448.13
http://sports.ha.com/common/view_ite...6&Lot_No=81539
Jan 24, 2010: $167.30
http://sports.ha.com/common/view_ite...4&Lot_No=44114

Would you (HA) really pay $448.13 (-19.5%) for this card again?

I’m not sure what the point of your post is as your links are for two different cards and Heritage neither owned or won either of them. That being said, if you have the time and the desire, I’m sure that you could search our expansive prices realized database to find an example of a lot that Heritage may have won at auction, then offered in a later auction or on eBay and sold at a loss. If we bid on an item and win it, then we write a check for that item including the 19.5% BP into the cost basis and the consignor is paid at settlement. Our money is at risk in the same manner that it would be if any other collector or dealer had won an item and decided to re-sell it. There is no doubt we have made some mistakes with purchases in the past.


I am well educated (like most on the board) but still having a very hard time understanding the distinction between someone on eBay shill bidding up their own item(s), winning and reslisting vs. HA's policy. Would it make a difference if the eBay bidder stated shill bidding was OK if the fine print?

From what I can tell, this is the only distinction. Maybe I am wrong? Is it semantics or something else? People usually do not accuse me of being slow but maybe I just don't get it. Since Jonathan asked for people that still do not get to ask questions, that is all I am requesting. Crickets, crickets...

Here is the simple distinction. An eBay shill bidder owns the material he auctions and therefore has no interest in buying it. Conversely, Heritage does not own the material it auctions, and has interest in buying it. Anything we already do own that goes to auction would be sold with a posted reserve if we were to “bid” on our own material. And shill bidding is a criminal offense, so stating it is “OK in the fine print” wouldn’t quite get it done. Our policy is legal, and clearly stated. So it is far more than semantics, I’m sure we can all now agree.

And, in closing, to put the genesis of this thread in its proper perspective, this sender of 120+ emails (and dozens of phone calls) sent yet another email to our Chairman, warning that he intended to start multiple accounts and place fake bids to ruin our auctions, and to hire “hackers” to crash our system. This email has, of course, been forwarded to the proper authorities. Again, it’s always tempting to take the side of the little guy when he complains about a big company, but the smart folks will take a step back and see that Heritage truly is a leading force for good within this hobby.

Heritage makes our auctions as transparent as possible and we state our rules in our T&C because we have nothing to hide. We are the only large sports auction firm that publishes reserves. We make all of our past results readily available in our auction archives. We have paid every consignor on time, every time over our 35 year history and we have sold collections on behalf of the FBI, DEA, and IRS. Heritage just strikes me as an odd target in a hobby with no shortage of legitimate ones. And, again, remember, this thread began because a guy who has absolutely flooded Heritage with over 100 emails got free advice for a $1500 baseball that didn’t pan out, then threatened a cyber-terrorist attack in retaliation.

Providing quality auctions is a service business and we understand that. Heritage has grown to be the world’s third largest auctioneer with over $600,000,000 in annual sales because of the trust and relationships that we have built over 35 years of quality service to our clients. This year is the first that Heritage Sports will be the largest sports auction firm as well, with over $12,000,000 in sales for 2010. If anyone has any additional questions from this post then please feel free to email me directly because I will not be able to post regularly.

By the way, Heritage will be launching its incredible November Signature Auction any day now, so be on the look out for it.

[DJR]

.

[barrysloate]

Jonathan- thanks for coming on and explaining Heritage's policy in great detail. I do understand that your practices are legal, and that the company is bidding in good faith- by that I mean if you win a lot you will honor your bid and pay the consignor.

But there are other issues besides legal ones. There are just some auction practices that collectors really hate, and one is when employees of auction houses bid. I know it's done in other places- when I worked at Sotheby's I was allowed to bid on Halper lots even though I catalogued the collection. It was not an issue and they even have contracts written up solely for this purpose.

But that is the legal justification for it. On a public relations level, it is a disaster. I guess when you sell $600 million a year of memorabilia it may not matter. But I'm certain that is the issue that rankles the people reading this. Again, it's rare for an auction house to come into this lion's den with a fair and reasonable explanation.

[gordonanalytic]

I think that it would be best to avoid Heritage altogether. The arrogance of the employees is shocking. There are too many other decent auction houses, and we should give the alternatives our business. The fact that one of their legends in the business, Mike Gutierrez had his "opinion" on a Mickey Mantle signature contradicted by PSA, the people he used to work for, should be embarrasing to the company. If he can't get that right then why deal with them. Where is the accountability?

PS.... A cyber-attack? A bit of hyperbole. Some of my more creative employees in IT came up with interesting ideas to share with the folks at Heritage.

120 emails. Sounds like excellent communication. How many were for consignments?

[Jim VB]

I think that it would be best to avoid Heritage altogether. The arrogance of the employees is shocking. There are too many other decent auction houses, and we should give the alternatives our business. The fact that one of their legends in the business, Mike Gutierrez had his "opinion" on a Mickey Mantle signature contradicted by PSA, the people he used to work for, should be embarrasing to the company. If he can't get that right then why deal with them. Where is the accountability?

PS.... A cyber-attack? A bit of hyperbole. Some of my more creative employees in IT came up with interesting ideas to share with the folks at Heritage.

120 emails. Sounds like excellent communication. How many were for consignments?

Gordon,

There's 2 distinct issues here. First is whether a retail enterprise has the right to terminate business dealings with a customer that they haved deemed to be overly troublesome, by their definition. Clearly, they do. They are not obligated to do business with you if they so choose. Many retail stores do the same thing. More and more, retailers are keeping track of customer profiles (e.g. - frequent buying and then returning items.) Some customers will find themselves banned, even from stores like Target or Best Buy.

The second issue is whether or not the bidding practices of Heritage are legal and/or a smart business practice. They are legal. Period. The jury is still out for the smart business practice part, at least for me.

[RichardSimon]

If they won't stand behind the opinion of Mike Gutierrez, regarded by some as a major authority on autographs, then what kind of company are they.
There are some people in the autograph hobby who regard Mike Gutierrez' opinion on autographs as the gold standard. Apparently his own employer does not deem that worthy of their support.
In the interest of full disclosure the consignor has contacted me, asking about other signatures and then telling me about this matter.
---

[gordonanalytic]

DALLAS, Sept. 11 /PRNewswire/ -- A racketeering lawsuit aimed at Heritage
Auctions and its top executives was expanded Wednesday, when a prominent
Montana businessman joined the charges against what has been termed as a
"massive auction scam." The suit charges the defendants used a secret,
undisclosed shill, or fictitious bidder, at auctions, so winning bidders paid
inflated prices.

Defendants in the suit are Gregory J. Rohan; Steve Ivy; James L. Halperin;
Marc D. Emory; Paul R. Minshull; Dagmar Byers; and their company, Heritage
Auctions, Inc.

Gary Hendershott, an expert in Civil War memorabilia, was joined in the suit
by Chris Kortlander, a prominent Montana businessman. Kortlander alleges that
he "consigned thousands of individual historical manuscripts and photographs
to Heritage," but was deprived of profit because of Heritage's fraudulent and
deceptive acts.

Mark Senter, attorney for the plaintiff, charged that "the Heritage defendants
use N. P. Gresham, a fake bidder, to rip-off legitimate bidders."

These charges appear to be the latest in a long line of lawsuits filed across
the U.S. charging the defendants with fraudulently manipulating auctions. In
1989 the FTC ordered Heritage to pay $1.2 million in restitution to victims of
Heritage and Halperin who had paid inflated prices for coins. Forbes magazine
reported that on another occasion, an arbitration panel ruled that Heritage
must pay $23 million to another plaintiff.

"Texas law strictly and explicitly forbids shill, or fictitious, bidders at
auctions, but James Halperin, Heritage's Chairman, admitted in sworn testimony at an injunctive hearing that N. P. Gresham does not exist. Yet Heritage later admitted that N.P. Gresham not only bids at auctions, but that no one outside of Heritage knows who Gresham is," said Senter.

According to the lawsuit, the defendants are in violation of RICO by "secretly
bidding in the name of N. P. Gresham at auctions in surreptitious competition
with other valid bidders."

Senter explained that using N. P. Gresham as a ghost bidder results in higher
prices being paid at auctions by innocent, unknowing bidders. The practice
overstates Heritage's ability to effectively get the best prices for items it
auctions.

Depositions in the lawsuit are scheduled to begin in the near future.

[thekingofclout]

True or False. Guilty or Innocent. Damage control on a board of 2200 members should be the least of their concerns...

[baseballart]

Jimmy

A google search shows the lawsuit was started in May 2009 and amended in September 2009.

Here's a link to an article with heritage's response

http://acn.liveauctioneers.com/index.php/features/crime-and-litigation/1431-heritage-auctions-co-chair-fires-back-at-former-consultants-lawsuit

Max

[thekingofclout]

Jimmy

A google search shows the lawsuit was started in September 2009.

Here's a link to an article with heritage's response

http://acn.liveauctioneers.com/index.php/features/crime-and-litigation/1431-heritage-auctions-co-chair-fires-back-at-former-consultants-lawsuit

Max

Max. I forgot to hit the quote option from the last post from the original poster. I think I'll take it down in order to clarify that point.

[Heritage Sports]

From Wikipedia: http://en.wikipedia.org/wiki/Heritage_Auctions

In May 2009, Gary Hendershott, a dealer in Civil War memorabilia and U.S. Western historical objects, issued a civil RICO (Racketeer Influenced and Corrupt Organizations) lawsuit against Heritage for violating several Texas state laws. Amongst Hendershott’s allegations were that Heritage utilized shill bidding to increase prices, and that the Heritage failed to pay him commissions for the auction sales he had facilitated for the firm. Heritage vehemently denied the claims, terming them an elaborate ruse by Hendershott to avoid paying his bills. "Basically, it’s the plaintiff’s lawyer trying to wage a PR war to force us to the table to settle with his client, who owes us well over a million dollars.”[22]

Hendershott’s lawsuits have been dismissed, without prejudice, by three different judges, and remanded to arbitration."[23][24][25]

In early September 2009, a similar RICO complaint was filed against the firm by Chris Kortlander, a businessman from Montana who had once hired them.[26] On September 25, 2009, all of Kortlander's claims were dismissed with prejudice.[27]

On September 16, 2009 Heritage filed a motion asking for sanctions against Hendershott and his attorneys for misconduct.[28]

On September 30, 2009 Heritage filed a lawsuit against Hendershott and his attorneys alleging defamation and civil extortion.[29]

On April 7, 2010, Judge Solis of the US District Court entered a permanent injunction commanding Hendershott and anyone acting on his behalf to remove from the Internet all previously published false, misleading and/or disparaging statements regarding Heritage and enjoining them in the future to desist from making or distributing such statements.[30]

The RICO lawsuit and all claims against Heritage were also dismissed with prejudice.[31]

[bijoem]

I don't like what Heritage does with their bidding on lots but it's open and transparent and legal. In the scheme of things, this is as good as it gets in the auction world. I do think that the condescending tone is really uncalled for, however. Why are auctioneers so condescending? You'd think they'd just invented the AIDS vaccine or something.


Jeff -

I like Heritage and their auctions - but reading their first response - I was left with the same feeling. why be condescending?


"The distinction is so clear to us, and to most people within the hobby, that perhaps we have failed to spell it out in its simplest terms. So, if you’ll allow me, here is the difference between Heritage’s policy of placing house bids, and the illegal practice of shill bidding:"

[glchen]

gordonanalytic:

I know you're understandably upset about this situation and about how you've felt you've been treated by Heritage. However, at this rate, you're probably going to be banned from the board, and deservedly so. You are only further supporting the opinions on why Heritage banned you. Take it was a lesson learned, and the next time you purchase a expensive auto, make sure that there is an LOA from JSA or PSA/DNA.

About the latest Heritage posts, to be frank, I still dislike house bidding. Jonathan mentions that even if they win the item, they have to pay the 19.5% BP. However, who gets that BP? Heritage, of course. Therefore, with house bidding, Heritage is at an advantage even if they win the item. And that "7 day rule" as far as I know, is not written into the Heritage terms and conditions. If it were, I would feel better, because then I would know not to start bidding until 6 days before the auction and just take the current bid as the reserve. I still think that major auction houses should follow REA's standard of excellence, where there is not even the slightest hint of impropriety.

[calvindog]

Jonathan, far be it from me to offer such a humble guy like you some advice, but perhaps Wikipedia is not the best source to be citing when noting litigation results. Second, as per your Wikipedia entry, I noticed that the lawsuit filed by the guy from Montana was simply removed to arbitration. I'm guessing this was done due to the contract he signed with Heritage which held that any disputes would go to arbitration and not a court. I've checked Wikipedia and I'm unable to find out what happened with that litigation; perhaps you can shed some light on this.

[Rob D.]

"Wikipedia is the best thing ever. Anyone in the world can write anything they want about any subject. So you know you are getting the best possible information."

-- Michael Scott, The Office

[Matt]

Not to distract from the interesting legal discussion on the table currently (Rob - that might be the best pop-culture reference on topic I've seen in a while), but I'd also like one other question answered:


The issue is not when the bid was placed, although placing the bid early without knowledge of any other bids on the item is an important distinction, the real issue is the intent. We are placing a bid at which we are willing to pay for the item. Shill bidders are bidding on material with no intention of winning or paying for the item, simply with the intention of pushing up the prices. If we win the item, then we pay for the item with the buyer’s premium included and most importantly: The consignor is paid for the item at settlement.

Thanks for responding. You said you pay the BP on lots you win, thereby removing any advantage you would have in the bidding. Who do you pay the BP to?

[calvindog]

Who do you pay the BP to?

The right hand, of course.

[Bridwell]

When I won a card last year, they charged me a 19.5% buyers fee and also 8.25% sales tax since I live in Texas. If their 'internal' bidder bidding against me wins the lot, does he pay the sales tax? Usually if an item is being bought by a wholesaler for resale in Texas, they can agree to waive the tax. From my point of view, the 'internal' bidder at Heritage may have an advantage of 27.75% in bidding against me.

[benjulmag]

As I see it, Heritage is in fact "paying" a BP for items it buys itself even though it is paying it to itself. The reason is opportunity cost. Say it buys an item for $10,000. The BP would be $1,950. And say the underbid was $9,500. The BP for that underbid would be $1,852.50. By buying the item itself, Heritage is forgoing that $1,852.50. That forgone BP is a real cost to them, an opportunity cost in economic parlance. Even though it is real, though, it is less that than the BP a non-Heritage winning bidder would be paying. In the example I give, Heritage's BP is 18.525% ($1,852.50/$10,000). So they do have a bit of a competitive advantage over the underbidder. If Heritage really wants to make this clean from a PR perspective, they might consider remitting the $97.50 to the consigner. That way, via the $1,852.50 BP "paid" via opportunity cost and the $97.50 extra paid to the consigner, they really are "paying" the full BP.

[Matt]

One other point - the "intent" argument is slippery. You contend your intent is to win the lot which is what differentiates it from shill bidding, where the intent is to drive up the price. While I don't doubt you would be happy to win the lot at the wholesale prices you are bidding at, I'd imagine that the fact that if you don't win, the bid was driven up, isn't a terrible consequence from your perspective; your consignor is happier and you take in a higher BP. I'd also suggest that a shill bidder has a price that he'd rather have his item back at then sell it, in which case, his bids seem similar to what you are doing.

[Clementefan]

As someone who has spent his second career in mediation and arbritration trying to get warring parties to an acceptable peace may I put in my two cents as per the Heritage - gordonanalytic situation. I find that cooperation and cooler heads leads to productive results. A couple of points:

1. "A teaspoon of honey helps the medicine go down."
I find that with animated/agitated people like gordonanalytic that the best approach is to cool them off. Like putting ice in a cup of hot coffee.
This can be done with a simple "I am sorry, what can we do for you...?" as opposed to what allegedly was reported..."if you escalate the matter then we will no longer do business with you." That sounds like an ultimatum.

It is a fact that patients who get along with their doctors are much less likely to sue them for medical malpractice. The same with customers and retail establishments. If the customer feels that the retailer has listened and offered some help then the angry customer tends to cool off. On the other hand, an angry customer will no longer do business with the retailer and will tell many other people about his/her poor treatment.

The retailer loses the customer's business today and tomorrow. And the retailer could lose business from the customer telling other people about his poor experience with that firm. On the other hand, the customer loses the utility/value of having done business with the retailer.

In other words, a "lose - lose" situation. No winners, just losers.

The way to create a "win - win" is to find out what each party can agree upon.

Is the issue money? reputation? respect?
Perhaps people from the board can offer an opinion.... How much would a fake Mantle signature affect a 1953 NY Yankees team signed baseball? A few hundred dollars ? I don't know. But it cannot be too much money.
With that dollar amount there must be some creative way to resolve the matter.
Jon - is gordonanalytic a repeat customer... with 200 (?) emails it would indicate that he/she has done business with Heritage.
gordonanalytic - what exactly are you looking for?

2. "Everyone gets dirty when mud is being slung around."
gordonanalytic - repeatedly badmouthing the retailer will not help the situation. Think about it... if someone repeatedly insulted you would you be willing to work them to a satisfactory resolution. Probably, possibly unequivocally... not.

The same behavior applies to the retailer,.... Jon. Stating something like "200 email messages" is a convenient round number which implies exaggeration. It is meant to discredit the customer, but in fact it indicates lazy research. How many of the emails were in response to a question from the retailer?

Anyway, everyone looks bad with bickering...

[Duluth Eskimo]

Why are we allowing "Gordon" to continue this smear of Heritage? Although a little bit smart-a$$ at first, Jonathan was very up front about the whole matter. Gordon is just upset that they do not want to auction his item. SO WHAT! Do what everyone else does and take your business someplace else. Furthermore, why let someone like Mike Gutierrez affect how you feel about your item. I personally think Gutierrez let's many outside issues affect his judgement on items. Not to mention that he used to be employed by Global. I saw many things that were (IMO) no good pass through Global when he worked there. I choose not to do business with him or to him. Why not just let the water pass under the bridge and move on. At no time did Gordon dispute any of Heritage's claims that he has been harassing them. That is out of line, PERIOD. He is acting like they stole money from him or something. I believe it is time to move on to ANYTHING else.

[Leon]

Why are we allowing "Gordon" to continue this smear of Heritage? Although a little bit smart-a$$ at first, Jonathan was very up front about the whole matter. Gordon is just upset that they do not want to auction his item. SO WHAT! Do what everyone else does and take your business someplace else. Furthermore, why let someone like Mike Gutierrez affect how you feel about your item. I personally think Gutierrez let's many outside issues affect his judgement on items. Not to mention that he used to be employed by Global. I saw many things that were (IMO) no good pass through Global when he worked there. I choose not to do business with him or to him. Why not just let the water pass under the bridge and move on. At no time did Gordon dispute any of Heritage's claims that he has been harassing them. That is out of line, PERIOD. He is acting like they stole money from him or something. I believe it is time to move on to ANYTHING else.

If it's time to move on why did you bump the thread that wasn't being posted in anymore? Andrew (gordonanalytics) and I had a discussion off line and I think he got his rant out. I let him know that the whole forum(s) weren't going to be his playground for very long. At the same time I had to be congnizent of not squelching someone's right to talk about a hobby related issue. It's a fine line but someone has to draw it. You can PM me if you want to discuss it anymore, or if you really want to, you can post in this thread and keep bumping it, contrary to your request. As for Mike Guiterrez, he has always been very nice to me and I like him personally. I can't really comment on any of the other stuff as it's out of my spectrum of collecting. I don't know enough about autographs to know good from bad so stay away from them. If I were going to collect them it would be confined to me getting them in person or getting them on legal documents. regards

[calvindog]

Why are we allowing "Gordon" to continue this smear of Heritage? Although a little bit smart-a$$ at first, Jonathan was very up front about the whole matter. Gordon is just upset that they do not want to auction his item. SO WHAT! Do what everyone else does and take your business someplace else. Furthermore, why let someone like Mike Gutierrez affect how you feel about your item. I personally think Gutierrez let's many outside issues affect his judgement on items. Not to mention that he used to be employed by Global. I saw many things that were (IMO) no good pass through Global when he worked there. I choose not to do business with him or to him. Why not just let the water pass under the bridge and move on. At no time did Gordon dispute any of Heritage's claims that he has been harassing them. That is out of line, PERIOD. He is acting like they stole money from him or something. I believe it is time to move on to ANYTHING else.

I understand. So let's rant about what you perceive to be as an unfair smear of Heritage while at the same time you trash Mike Gutierrez with vague accusations? You should teach a Logic class somewhere.