ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Eric Brehm</b><p>Matt - good point. I tend to pay more attention to the regular auctions on eBay, than to the BIN results, when assessing values.

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>CoreyRS.hanus</b><p>Market price reflects what an item would fetch on the "market". The market to me is that universe of buyers or sellers of such an item, who have access to each other and the same information about the item, and who are aware what each is willing to buy or sell the item for. The market is not a private transaction between two people oblivious to what others would buy/sell the item for. To the extent you have such a private transaction, what price the item goes for reflects the particularities of that particular buyer and seller, which can have little relation to how the market would value the item. <br /><br />In regard to BIN transactions, they differ from shilled transactions in one very important way -- the buyer is not being mislead by fraudulent information that there are ready, willing and able buyers at the shilled bidding increments below the price at which the shiller is prepared to let the item sell at.<br /><br />

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>davidcycleback</b><p>What are the rules of the game, and are both sides following the rules of the game-- those are two essential questions. If one side is following the rules of the game, and the other side is secretly breaking them for financial game, it's not a fair contest and the result is at the least unreliable. If a boxer taped his hands with plaster, most boxing enthusiasts would say the match result was invalid. If a poker player snuck in a sixth card, most would say his win should be voided. And if a seller is secretly placing shill bids against the stated rules, most would say the final price is invalid.<br /><br />In any game, if one side follows the rules and the other breaks them for material effect, the final score is considered invalid. Most will say the game and score doesn't count, the game is null and void. <br /><br />If you force one side in a game, any game, to follow the rules and allow the other side to break any rule he wants, you'd be a fool to consider the final score seriously. 9+ times out of 10 the latter person will win, because the game is fixed to his advantage.<br /><br /><br />It should also be noted that most people consider fair market value to be what they would get if they tried to sell it on the open market. Assuming these people are going to follow the laws of the land, a past sell price inflated by illegal activity would not be considered an indication of fair market value. <br /><br />I would think that it would be obvious to most people that a sale price obtained by illegal means is neither valid nor, more important, a reliable indication of the fair market. Law abiding sellers shouldn't use that price as indication of what they'd get on the open market, because they will get substantially less. Sure, a seller might be able to get $50 for a 1987 Topp Chuck Crim by threatening to beat up the collector, but, for the dealers and collectors who don't threaten to beat up their customers, the market value is about two cents. <br /><br />As is often said, a card is worth to you what you can sell it for. If a Barry Halper Auction or chat-board-theorized price is not what you can get for your card, it's not what your card is worth to you. $150, $76 and $2,750 are pretty numbers indeed, but if you can only get $48 the card is worth $48. <br /><br />I feel that some of these "Market Value" prices theorized in this thread are not market prices, as no law abiding seller would obtain the prices. If no selling Net54 board member would receive at eBay auction or sale $3,000 for that card, the market value for the card is not $3,000. Realized, not theorized, prices feed the bull dog. Bull dogs don't eat woulda coulda shoulda.

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Steve</b><p>In any game, if one side follows the rules and the other breaks them for material effect, the final score is considered invalid. Most will say the game and score doesn't count, the game is null and void.<br /><br /><br />Too bad that didn't happen to the Patriots and all those Super Bowls they cheated to win.<br /><br /><img src="/images/wink.gif" height=14 width=14><br /><br />Steve

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Eric Brehm</b><p>Interesting discussion ... the best I've seen at getting to the heart of the matter. I just hope that if it is going on in the sports memorabilia world (and many seem to feel strongly that it is), that someone gets busted for it one of these days; that might serve as a deterrent for others engaging in the practice.

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>boxingcardman</b><p>It is expressly forbidden in CA by Civil Code 1812.608(h):<br /><br />1812.608. In addition to other requirements and prohibitions of this title, it is a violation of this title for any person to do any of the following:<br />h) Cause or allow any person to bid at a sale for the sole purpose of increasing the bid on any item or items being sold by the auctioneer, except as authorized by Section 2328 of the Commercial<br />Code or by this title. A violation of this subdivision includes, but is not limited to, either of the following:<br /> (1) Stating any increased bid greater than that offered by the last highest bidder when, in fact, no person has made such a bid.<br /> (2) Allowing the owner, consignor, or agent thereof, of any item or items to bid on the item or items, without disclosing to the audience that the owner, consignor, or agent thereof has reserved the right to so bid.<br /> A violation of this subdivision is an infraction subject to a fine of one hundred dollars ($100).<br /><br />With a penalty of $100, of course, the sanction is laughable but presumably a conviction on this basis would result in a civil lawsuit with a punitive damages claim. <br /><br /><br><br>Sic Gorgiamus Allos Subjectatos Nunc

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Matt</b><p>Adam - I had to take the website's word for it when I quoted above, but is it also covered by the 2006 Fraud Act?

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Peter_Spaeth</b><p>The same state that forbids altering cards by statute, if memory serves. <img src="/images/happy.gif" height=14 width=14>

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>davidcycleback</b><p>I guess if California starts busting people for shilling, the values of our cards will get a retroactive "market adjustment." Or maybe the price guides will simply add asterisks.<br /><br />Actually, since some people say market value is determine by how much the seller gets from the buyer no matter what the circumstances, the value of that shilled "$3,000" card evidently would turn out to be -$250. After the fine, legal fees and civil settlement, that's how much the seller realized from the sale of the card. <br /><br />Going on past sale results, perhaps someday Beckett will list the value of a card as "20 days community service and loss of eBay privileges." Perhaps another value will be listed as "Knee to the groin from irate buyer."

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Red</b><p>It's a never ending battle. Sellers shilling to keep prices up, and buyers in collusion to keep prices down. Both equally talented at each other's tricks, and the poor auction house in the middle getting blamed for it all.

ok Lawyers- Is shill bidding illegal?
 

Posted By: <b>Eric Brehm</b><p>Well if the auction house itself is the one doing the shill bidding, they certainly are to blame. Especially if they are bidding on items that they themselves own, so they have nothing to lose except perhaps a delay in finding buyers by some other means, if nobody tops their in-house bids. If they are bidding on items consigned to them, they are still potentially in a position to make a reasonable profit, since the 10% or so extra they have to pay the consignor when they raise the highest legitimate bid is less than the 15% to 20% buyer's premium that the high bidder was willing to pay.<br /><br />Buyer collusion: how does this actually work? Say Buyer A and Buyer B both want Card 1 and Card 2 for their collections. But they agree that Buyer A will only bid on Card 1, and Buyer B only on Card 2. So Buyer A forfeits the opportunity to buy Card 2, but gets a better price on Card 1 in return, since Buyer B is not bidding against him. Is that it? I know this has been discussed here before, as to whether this sort of agreement is ethical or even legal, but I can't remember what the conclusion was.