Ethical Concerns Regarding Heritage?

[Tabe]

This video kind of got buried in another thread but I thought it worthy of its own discussion:

https://www.youtube.com/watch?v=rvLFEh7V18A


This is a nearly 1-hr, well-documented expose of price manipulation and deception in the video game market by game grader WATA Games, the top grader of video games, in partnership with Heritage Auctions. It extensively details the shady background behind Jim Halperin (including settling price manipulation charges and lying about the existence of a group he was part of) and the seemingly-fraudulent interactions behind WATA and Heritage. This includes WATA directors grading their own games, in violation of WATA's supposed policies and then selling them through Heritage. It details Heritage proclaiming that they would sell WATA video games - before WATA had even opened up shop. And on and on and on.

The implications are pretty obvious for other areas like sports cards.

I recommend you take an hour of your time and watch the video.

[swarmee]

Based on the blowout thread, both WATA and Heritage are pushing back hard against the accusations.
https://www.blowoutforums.com/showth...1483086&page=4

[T205 GB]

Interesting watch

[marzoumanian]

Thanks, John, for being the first to respond to Chris highlighting this video. I was waiting for someone to reply before I gave my 2 cents.
First, Chris is absolutely correct. The video is a true eye-opener and in my opinion very well researched.
Second, it does not surprise me that Heritage would refute the video's content (with the press release found on Blowout). Years ago (2004?) Forbes magazine wrote a long piece on Mr. Halperin and his dealings in the coin world. He took the time to refute it paragraph by paragraph. In my years as a journalist I have rarely seen such detailed feedback. Pretty amazing. My point? This man is willing to attack you and attack you HARD if you say anything that he feels is inaccurate.
He is very powerful. He has spent more than 40 years in the coin/collectibles business. In fact, I believe I will stop here and conclude by saying his history is very disturbing. Peace.

[Tabe]

Originally Posted by swarmee

Based on the blowout thread, both WATA and Heritage are pushing back hard against the accusations.
https://www.blowoutforums.com/showth...1483086&page=4

Eh, all they said was "no way, that video is totally false and we should have been contacted."

Note that they didn't specifically deny anything - no denial by WATA that they were grading games belonging to their own people. No denial by Halperin that he lied about being part of a group he was part of. No denial regarding the settlement of previous illegal behavior. And so on.

[swarmee]

Oh, I noticed that. But most players don't even respond anymore. The video is well done, and yes, I agree they were "creating" the market. Truthfully, I think the only way this stuff gets lessened in the future is the IRS requiring all consignment houses to file income tax paperwork with sale values for every consignor who sells more than $600 annually through any of them.

I don't see how all that money flows the way it does if the sellers knew the IRS was getting a record of every card/coin/game/etc they sold.

[Snowman]

I only got about halfway through it. It reeked of bullshit nonsense to me.

By their logic, anyone promoting Bitcoin must be a crook. People who believe in something invest in it and promote it. Gee, who knew? That's not market manipulation. That's speculative investing and discussing one's interests. And he provides no proof whatsoever of the more sinister claims.

Classic tinfoil hat Blowhard forum nonsense.

[mrreality68]

A lot of information and a lot to think about

Heritage has to defend themselves because of their brand and reputation are at stake

[swarmee]

Originally Posted by mrreality68

A lot of information and a lot to think about

Heritage has to defend themselves because of their brand and reputation are at stake

Against shill bidding, they can fall back on their Rule #21; what they may be doing is legal in their state of registration, and spelled out in their user agreement.

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.

Everyone who bids in a Heritage Auction or creates an account, agrees to these terms. Are they ethical? Many would say no. But that obviously hasn't hurt them so far.

As to pushing the market (or creating one out of thin air), most auction houses are of the opinion nowadays that their job is to create higher sale prices, as a service to their consignors.

Is the whole NFT market a pump and dump scheme as well, or are there really collectors shelling out millions for animated gifs attached to a blockchain?

[mrreality68]

Originally Posted by swarmee

Against shill bidding, they can fall back on their Rule #21; what they may be doing is legal in their state of registration, and spelled out in their user agreement.

Everyone who bids in a Heritage Auction or creates an account, agrees to these terms. Are they ethical? Many would say no. But that obviously hasn't hurt them so far.

As to pushing the market (or creating one out of thin air), most auction houses are of the opinion nowadays that their job is to create higher sale prices, as a service to their consignors.

Is the whole NFT market a pump and dump scheme as well, or are there really collectors shelling out millions for animated gifs attached to a blockchain?

I do not disagree with you just saying they are trying to cover themselves to protect their reputation against the allegations

[rugbymarine]

I appreciate the info laid out here, especially that Rule #21 on Heritage terms of service.

I had scrolled through and flagged and bunch of lots to possibly bid on, but for now I will pass on bidding.

[chadeast]

This thread is also relevant to a discussion and worth a look to anyone who may have missed it.

https://www.net54baseball.com/showthread.php?t=295176

[Tabe]

Originally Posted by Snowman

I only got about halfway through it. It reeked of bullshit nonsense to me.

By their logic, anyone promoting Bitcoin must be a crook. People who believe in something invest in it and promote it. Gee, who knew? That's not market manipulation. That's speculative investing and discussing one's interests. And he provides no proof whatsoever of the more sinister claims.

Classic tinfoil hat Blowhard forum nonsense.

If you saw no proof, you watched a different video.

[packs]

Originally Posted by Snowman

I only got about halfway through it. It reeked of bullshit nonsense to me.

By their logic, anyone promoting Bitcoin must be a crook. People who believe in something invest in it and promote it. Gee, who knew? That's not market manipulation. That's speculative investing and discussing one's interests. And he provides no proof whatsoever of the more sinister claims.

Classic tinfoil hat Blowhard forum nonsense.

The article seems to have some definite facts, like who purchased the cartridge, for example, and who that person's employer is/was. Interpretations of those actions can be varied but some things did happen the way it says they did, though I have no opinion on Heritage or their actions or the accusations made.

[swarmee]

https://sethabramson.substack.com/p/...Published=true

Now they're digging further into the connection between WATA, Goldin Auctions, PSA, Collectors Holdings (Nat Turner et al), and their PR firm. Seems very familiar.

[MattyC]

Great article. I love how it calls out legacy media for breathlessly and recklessly reporting all these record sales— when these institutions should be digging into the self-dealing and corruption rampant in collecting.

Goldin says, “firewall” between the AH and PSA — both owned by the Turner cadre. But then sells full synergistic integration to a group of insiders.

We now have an AH and TPGs owned by the same group, with the AH selling collections graded by the in house TPG — and in some cases the collections are owned by directors of the TPG. It’s the Wild West.

Anyone who thinks the rising prices are due solely to natural collector demand is beyond naive. Favorite quote from article:

“…A picture is emerging of a relatively small cadre of men who sought to produce a new alternative asset class out of thin air and become even richer than they already are. In establishing this new asset class, these men benefited from the ongoing and stunning lack of collectibles regulation from the FTC—indeed, one of the men, James Halperin, had cause to know that even grave misconduct in the collectibles market is often met with an easily survivable, slap-on-the-wrist FTC fine—as well as new tax regulations involving luxury collectibles that were written by one of the men in question.

These men were aided, too, by fawning, uncritical coverage of their activities by the legacy media, with embarrassingly credulous headlines that did little to question the conspicuously inorganic nature of the nation’s newest market bubble. And in one case, a History Channel “reality” show knowingly or negligently let two men from this cadre pretend not to know one another on-air—a historically galling television segment that played a critical role in moving the video game market from a tiny, niche market to the eight- or even nine-figure one it has become just thirty months later.”

[Peter_Spaeth]

I miss the good old days when all you had to worry about was card doctors, PSA and SGC grading Hall's and Forman's cards, and some AH shill bidding. Now it's all so much more corporate and complicated.

[marzoumanian]

I have a headache after reading this piece! But along the way I kept saying, "Wow."
It is the Wild West now more so than it ever was during the Mastro Auctions scandal. It's scary and disturbing when you see how all these companies are intertwined and scratching each other's backs. Even if readers here skim some of this looooong article it is well worth their time to review, IMHO. Please educate yourselves.

[chriskim]

i am less than half way and the info in that video are so sensitive..... Great investigation!

[MattyC]

Originally Posted by Peter_Spaeth

I miss the good old days when all you had to worry about was card doctors, PSA and SGC grading Hall's and Forman's cards, and some AH shill bidding. Now it's all so much more corporate and complicated.

Well said, Peter. Doctors and shills almost seem Rockwellian and quaint compared to all these corporate self dealings. But Turner owns cards and Kahn owns games so they are just collectors like us and will be White Knights to the industry More like wolves in sheeps’ clothing LOL.

The real “firewall” — to use Goldin’s now infamous word— needs to be between our love of our collections and our distaste for what these guys and their companies are doing. That’s a firewall I am determined to see hold.

As long as when I hang with my cards, it’s all pure enjoyment, and no thoughts of that shambolic corruption enter the mind, the wall is holding

[Peter_Spaeth]

A firewall would mean Goldin can't submit to PSA and nobody affiliated with PSA can auction through Goldin. Uh.... hmmmm …. I doubt it?

[Seven]

After reading horror stories about cards looking noticibly different on heritages website as opposed to in person, I said to myself how I'll be more careful when buying things going forward, in light of what's gone on, I'm not sure If I will participate in one of their auctions again.

It does not surprise me that there is shadiness and corruption in the hobby. From everything I've read and watched it's always been around but has taken different forms throughout the years.

[conor912]

Originally Posted by swarmee

https://sethabramson.substack.com/p/...Published=true

Now they're digging further into the connection between WATA, Goldin Auctions, PSA, Collectors Holdings (Nat Turner et al), and their PR firm. Seems very familiar.

This article is insane.

[conor912]

I’m also curious to hear people’s thoughts on the difference between building a bubble vs. building a market. Surely there is overlap, but where is the line between good faith and sketchiness, sketchiness and law-breaking?

[Fred]

Great video. It's worth the time to watch it. This is just another confirmation about the sad state of collectibles. Not just collectibles, but the sad state of society, in general.

[Snowman]

Originally Posted by conor912

I’m also curious to hear people’s thoughts on the difference between building a bubble vs. building a market. Surely there is overlap, but where is the line between good faith and sketchiness, sketchiness and law-breaking?

Exactly! That's precisely why I couldn't get through the video. His phrasing was so ridiculous. As if promoting an emerging market couldn't possibly be anything other than fraud. LMAO. That's ridiculous.

Again, I'll wait for actual detectives to investigate if there is any wrongdoing before I cast judgment.

[Fred]

Originally Posted by Snowman

Exactly! That's precisely why I couldn't get through the video. His phrasing was so ridiculous. As if promoting an emerging market couldn't possibly be anything other than fraud. LMAO. That's ridiculous.

Again, I'll wait for actual detectives to investigate if there is any wrongdoing before I cast judgment.

phrasing? Was it that difficult to understand the general premise of the video? Or are you saying that you believe the video is baseless in fact and an attempt to smear the reputations of "legitimate" businessmen?

[Aquarian Sports Cards]

If you haven't already, watch The Big Short. If you have, watch it again.

[drcy]

Originally Posted by Snowman

Exactly! That's precisely why I couldn't get through the video. His phrasing was so ridiculous. As if promoting an emerging market couldn't possibly be anything other than fraud. LMAO. That's ridiculous.

Again, I'll wait for actual detectives to investigate if there is any wrongdoing before I cast judgment.

There's nothing wrong with being a contrarian or dissenter to prevailing thought, but there seems to be a consistency in your arguments across different threads.

[Lorewalker]

Originally Posted by drcy

There's nothing wrong with being a contrarian or dissenter to prevailing thought, but there seems to be a consistency in your arguments across different threads.

Yeah he is completely nauseating. I see why he was booted off of BO. Let's hope it happens here soon.

[Leon]

Originally Posted by Lorewalker

Yeah he is completely nauseating. I see why he was booted off of BO. Let's hope it happens here soon.

Expressing an unpopular position isn't going to get someone booted from here. Other things will but not that...

[drcy]

Originally Posted by Leon

Expressing an unpopular position isn't going to get someone booted from here. Other things will but not that...

It can be a fine line, as groupthink and echo chambers (everyone saying the same thing and agreeing with each other) are also problems.

As I said, I just noticed a conistant thread in his arguments.

[Peter_Spaeth]

Originally Posted by Lorewalker

Yeah he is completely nauseating. I see why he was booted off of BO. Let's hope it happens here soon.

Meanwhile

Snowman

This message is hidden because Snowman is on your ignore list.

[Lorewalker]

Originally Posted by Leon

Expressing an unpopular position isn't going to get someone booted from here. Other things will but not that...

I appreciate that Leon. Aside from his AI posts the others seem to just be for the purpose of being oppositional. People keep engaging him so...I have not ignored him but I do skip over him, now.

[JollyElm]

417. Hostile Lurk Environment
When someone who hasn’t posted much at all suddenly starts appearing in multiple threads, throwing his outspoken opinions around.

[irv]

There are some who can't see the forest for the trees and then there are some who don't want to.

[perezfan]

Awesome and well-researched video. Incredibly damning to the major players creating this bubble. Equally interesting is that just prior to the episode on shill bidding was a paid advertisement for PWCC. I thought it was a joke at first, but it was completely legit.

PWCC might want to reconsider where to place their ads, as it was about as effective as an Oreo Cookie commercial interrupting a Keto Diet video.

[philo98]

Goldin just posted on their Twitter account highlighting the start of the auction tomorrow at 9am. Items are up for preview now. Will be interesting to see how this auction goes with all of the bad publicity surrounding it.

[Peter_Spaeth]

Originally Posted by philo98

Goldin just posted on their Twitter account highlighting the start of the auction tomorrow at 9am. Items are up for preview now. Will be interesting to see how this auction goes with all of the bad publicity surrounding it.

I predict "stuff" will prevail, it always does.

[Tabe]

Originally Posted by swarmee

https://sethabramson.substack.com/p/...Published=true

Now they're digging further into the connection between WATA, Goldin Auctions, PSA, Collectors Holdings (Nat Turner et al), and their PR firm. Seems very familiar.

Highly recommend everyone read this predecessor article to the one linked above by swarmee:

https://sethabramson.substack.com/p/...nal-video-game

It's a long read with a lot of detail but highly worthwhile. If nothing else, it's worth reading just to see the embedded Youtube video of the Pawn Stars segment with the Super Mario game. That segment is so brutally scripted and obviously fake it will make your head spin.

[Fred]

I just looked at the Goldin Auctions offering - lots of Video Games and WATA graded material with starting values above what a green T206 Cobb would go for (ok, not in 9.4 condition as graded by WATA), but still, how many people out there would rather have a common video game with a label that says its PRIMO than a nice piece of baseball history like a green (or for that matter, any) T206 Cobb.

Am I missing something here?

[perezfan]

Originally Posted by Fred

I just looked at the Goldin Auctions offering - lots of Video Games and WATA graded material with starting values above what a green T206 Cobb would go for (ok, not in 9.4 condition as graded by WATA), but still, how many people out there would rather have a common video game with a label that says its PRIMO than a nice piece of baseball history like a green (or for that matter, any) T206 Cobb.

Am I missing something here?

Especially a common video game with no WATA Population Report and a jacked-up history of fake sales and false prices realized.

I'll take the Cobb.

[bnorth]

Originally Posted by perezfan

Especially a common video game with no WATA Population Report and a jacked-up history of fake sales and false prices realized.

I'll take the Cobb.

+1 I would also rather have a T206 Cobb that has a jacked-up history of fake sales and false prices than a video game with the same type of history.

[swarmee]

Originally Posted by Fred

I just looked at the Goldin Auctions offering - lots of Video Games and WATA graded material with starting values above what a green T206 Cobb would go for (ok, not in 9.4 condition as graded by WATA), but still, how many people out there would rather have a common video game with a label that says its PRIMO than a nice piece of baseball history like a green (or for that matter, any) T206 Cobb.

Am I missing something here?

If you watch the video, a 9.4 by WATA seems like it would only be a Near Mint 7-8 at their competitor. So basically WATA scale is equivalent to BCCG. Usually investors want to prove they have the best and migrate away from watered down grading scales like BCCG.

[chriskim]

Such a good timing.... Goldin is having video game auctions in Sept. Previews are opened and I shake my head while scanning thru them.

[Fred]

Auction bidding should be anonymous, however it would be interesting to see who is actually bidding on those items (if/when they receive any bids).

I just don't get this. Are there more video game collectors than card collectors?

[packs]

I think that's where the controversy comes in. Are there actually collectors and is there an actual market or is it all smoke and mirrors?

[yomass]

Yes there are collectors and yes it is a real hobby. There are video game collector shows. Games trade on the internet all the time. The only oddity is the pace of price appreciation, especially for unopened "high grade" graded games. It's a bifurcated market, like comparing people who chase relatively common condition rarities in PSA 9 & 10 to those of us that chase PSA 3 T206s.
Two different mentalities. Two different objectives. But same hobby, generally.


Like anything, if you think the market is contrived or being manipulated, don't participate. Who is to say what the highest graded copy of the seminal NES video game is worth or will be worth in the future? What if five internet billionaires who played and collected the games as a kid decide they want it?
The intrinsic value of all this stuff is zero. Always remember that.

There are some bad facts in the documentary, and obvious conflicts of interest, but what is the difference between promotion and manipulation? It can't just be the magnitude of the price appreciation. How is any of this different than PSA putting a high grade on a trimmed Wagner back in the day?

[drcy]

"How is any of this different than PSA putting a high grade on a trimmed Wagner back in the day?"

Not a good line for a defense. "But, your honor, how is my bank robbery than that other John Dillinger's bank robbery?"
Judge: "It isn't. That's the point."

[Snowman]

Originally Posted by yomass

Yes there are collectors and yes it is a real hobby. There are video game collector shows. Games trade on the internet all the time. The only oddity is the pace of price appreciation, especially for unopened "high grade" graded games. It's a bifurcated market, like comparing people who chase relatively common condition rarities in PSA 9 & 10 to those of us that chase PSA 3 T206s.
Two different mentalities. Two different objectives. But same hobby, generally.


Like anything, if you think the market is contrived or being manipulated, don't participate. Who is to say what the highest graded copy of the seminal NES video game is worth or will be worth in the future? What if five internet billionaires who played and collected the games as a kid decide they want it?
The intrinsic value of all this stuff is zero. Always remember that.

There are some bad facts in the documentary, and obvious conflicts of interest, but what is the difference between promotion and manipulation? It can't just be the magnitude of the price appreciation. How is any of this different than PSA putting a high grade on a trimmed Wagner back in the day?

Exactly.

Promoting a market is not equivalent to manipulation of that market. Neither is investing in a market that you believe is about to explode, even if you own an auction house. Neither is partnering with or investing in a grading company. Nat Turner is doing the exact same thing all out in the open. Buying CU and Goldin and promoting the market, pumping millions of dollars of his own money into collectibles as well. It might rub people the wrong way for the same reasons that someone dislikes sales people or marketing teams, but that doesn't make it criminal or "market manipulation". Perhaps there's a crime hidden somewhere in this web of accusations, but investing in and promoting a market are not crimes, even if you own a company with a vested interest in that market.