B&L Auction Disclosure

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Posted By: Steve Murray

I was under the impression that any Lots owned by either Leon or Scott would have a disclaimer in the description noting same.

I think that Lot 1, the Just So, is Leons but I see no disclosure. Are there any other Lots that we should be made aware of?

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Posted By: leon

This was gone over before. We don't feel the need to state which auction lots are owned by us. We have already said that any lot you feel there could be an issue with, specifically pertaining to bidding (which seems to be where the main issues can be) we will be happy to disclose the bidders to.....however, only to a 3rd party fiduciary type person. I won't lie though if asked...I do own several lots in the auction....the Just So, the N321, the Lorillards, the N360's....and the Mothers bread card, are the main ones....and there a few lesser ones too. Other than bidding activity what is your concern and maybe I can help alleviate it.....?

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Posted By: Steve Murray

Guess I missed that episode.

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Posted By: leon

I searched and found the thread on our original announcement. Scott spoke about it then I did, in response to King...I am not trying to be antagonistic just pointing out what you missed (or might not remember) from before.....and this was taken from a longer response but addresses your question specifically.




"King March 8 2008, 10:26 AM


"1. When you guys list a card/lot that you own, will you identify as such? I think Barry Sloate does that, and I really appreciate that. I don't know of other auction houses doing that.

\
\

My response:

1. I don't believe Barry does this at this point. We don't believe we will single out our items or any others. Our bidding records are available to be viewed by a 3rd party if anyone thinks there is an issue. For instance if you think there is an issue....you find a good 3rd party, unbiased, non-hobby person, and we will prove there are no improprieties going on. Records will be maintained forever. Most of my 19th Century stuff will be sold in these auctions and folks will know this material but it probably won't be marked in any special way.

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Posted By: Jeff Prizner

but why don't Auction Houses call out owership? What's the harm in doing so?

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Posted By: Jeff Lichtman

I agree that there should be some disclosure of ownership by the auction house. That being said, to be honest, I could care less if there is such a disclosure in a Sloate or B & L auction. It really depends on how much you trust the house.

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Posted By: Dan Bretta

I think having a neutral third party is a good way to go. I don't see the harm either way in mentioning which lots belong to the auctioneers and I doubt it would curb anyone from bidding, but I also don't think it's necessary to do so.

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Posted By: Tim

Could someone explain to me why they would want to know who the seller is?

Doesn't it come down to trusting the House and their ability to review the items prior to showing the public?

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Posted By: Jeff Lichtman

Tim, yes it does come down to trusting the auction house. Problem is, when so many of the auction houses engage in shill bidding and other fraud a bidder would like as much information as he can get regarding the auction house's possible motivation to commit fraud. And before everyone jumps in and tells me that I shouldn't bid in any house's auction that I am not comfortable with, well, I'd have a very boring year and a tiny collection if that were the case.

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Posted By: Wesley

Tim, I personally am not overly concerned about whether the auctionhouse owns the items for auction. But I believe there are worries about an auctionhouse shilling its own items because instead of the 12 1/2 % commission, the auctionhouse would have 100% at stake if it owns the lot. I doubt anyone is worried about this happening in Leon/Scott's auction specifically, but everyone wants to be able to compete fairly.

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Posted By: barrysloate

After our original discussion on this topic I put an asterisk next to all lots I owned. It barely registered a whimper, and I stopped doing it. Nobody really seemed to care.

In the auction I closed last week I owned exactly two lots: the E107 Waddell and the WG1 Fogarty. Would anyone have bid differently if they knew this? However, I agree there is no harm in disclosure.

When I bid in an auction it makes no difference to me who owns any given lot. If I found out that one I was interested in belonged to one of the employees of the auction house, it wouldn't affect my bid at all.

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Posted By: T206Collector

I really have no problem with non-disclosure because there is an incentive for an auction house to shill up all of its auctions to generate more revenue. As long as you trust the auction house not to do that, it should not matter whether the auction house owns the item being auctioned.

_ _ _ _ _ _ _ _

Visit http://www.t206collector.com to see signed pre-war card galleries, articles, my blog, my collection and more!

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Posted By: Jeff Lichtman

But of course when an auction house shills items it owns it gets additional revenue in both the premiums and the underlying increase in price of the item.

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Posted By: Wesley

In addition to monetary motivations for shilling, the auctionhouse also has the advantage of knowing when to shill. If a whale has placed a large ceiling bid on a particular lot, wha tis to stop the auctioneer to keep running up the lot? Even if there is no high ceiling bid, the auctioneer can change his mind at the very last moment in order to "win" his lot back if the price is too low.

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Posted By: John S

Leon and Scott are stand-up guys. I will bid regardless.

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Posted By: Steve Murray

My post has nothing to do with "trust". I've dealt with both Scott and Leon and have no reason not to trust them.

But I recall the thread started by DR (Barry_Bonds)in April 2007. Unfortunately Mr. Bonds deleted all of his comments but a fair reading of the comments that followed displayed some concern regarding Mastro, it's employees and shilling.

Doug came on a generally satisfied everyone that proper measures were in place to safeguard against abuses by employee consignors and employee bidders.

Mastro now discloses in-house ownership of lots. See page 7 of its May auction catalogue. I would like to think this was a direct result of comments on this board.

So, nothing personal toward B&L but I feel that full transparency is warranted for all Auction houses.

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Posted By: Jeff Lichtman

Ahhh Steve....

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Posted By: Marc S.

are owned by the auction house, without specifying which lots...?

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Posted By: Rob D.

Welcome to the auction business, Scott and Leon.

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Posted By: SC

The biggest concern I would potentially have is how the description is written. In theory, the auction staff should be writing fair, accurate, enticing, but also somewhat impartial descriptions. Is it possible to write an equally objective description/grade for an owned item as a consigned item? Perhaps. But we've all seen the old "when the collector has it it's ExMt, when the dealer is selling it it's NrMt" difference. Grading has taken some of the bias out, but some is still there.

Edited to add: This is meant as a general comment on auction houses/ownership.

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Posted By: scott brockelman

About 20% of the lots are mine and Leon's. Most of those are the nickel and dime lots, filler if you will. Leon, as noted above has a handful of the higher value items. But the vast majority of the lots are consignments from collectors and dealers who thought we had a great concept and would attract an active bidding audience for their items. This includes most of the 4 figure lots as well. Obviously they trusted us.

As others have stated, we also have bid with every auction house in operation since 1990 and never once gave a thought to who owned the item. We trusted them to act in a prudent and responsible manner. We expected them to sell the item in a honorable manner. Did they? Well, most did. You only learn from experience.

I realize this query is not posed directly at us, but again, we have absolutely no reason to shill bid or play games with lots. This is our initial foray into the auction world and would hope that you trust us as much as we trust you.

Scott

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Posted By: Bob

I know Scott and Leon and I could care less if the cards in their auction are owned by them. Isn't it all about trust? If you don't like the non-disclosure, don't bid.

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Posted By: Steve Murray

Thank you. You just made up my mind. I won't bid.

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Posted By: Tony Andrea

Tbob wrote:
"I know Scott and Leon and I could care less if the cards in their auction are owned by them. Isn't it all about trust? If you don't like the non-disclosure, don't bid."

Well said Tbob............
Regards, Tony Andrea

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Posted By: Robert Dimand

The more someone tells me to trust them, the less I do, especially if they keep repeating it.

The market will speak.

I'm on the side. Sorry

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Posted By: Tim

I don't understand the "I'm not participating at all" attitude towards this or any other auction.

If you want to bid on an item, regardless of who owns it, you have a price set that you are willing to pay to own it. If the auction in question exceeeds what you want to pay, stop bidding.

I don't get the negativity. I've been posting on this board for a short period of time but I doubt Scott and Leon are willing to put their reputations on the line doing anything out of line.

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Posted By: Joe D.

Steve makes a very fair point.

I would love for all auctions to disclose items they own.

I think it is an important policy to have in place.


That being said... Leon and Scott should be cut some slack as this is their first auction.
I am sure many of their polices will evolve over time. Hopefully they will consider Steve's point (which as I said, i agree with) for future auctions.

I say bid with confidence.

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Posted By: MikePugeda

If the idea of disclosure is to minimize shill bidding, don't you think that if a company is going to shill, they will do so regardless of disclosure. Surely it is not that difficult to have friends or phony accounts set up to bid on said items.

As has been stated before, it all boils down to trust. Leon and Scott seem to be stand up guys and I won't hesitate to bid in their auctions.

I can understand the concern Steve expresses, and it is valid, but until given reason to doubt, why always focus on what could happen. I'm sure every board member has bid on at least one item that has been shilled, whether it is obvious or very discreet.

Steve, do you really have such concern over Scott and Leon owning undisclosed lots (and potential for shilling)that it would prevent you from bidding in their upcoming auction?

Mike

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Posted By: Ryan Christoff

It seems like there are several possible reasons to disclose ownership vs. consignment, although not everyone agrees with those reasons. But it is clear that those reasons do exist, at least for some people.

My question is, what reason is there not to disclose that an auction house owns a particular lot?

-Ryan

P.S. Auction looks great. Nicely done, Scott & Leon.

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Posted By: Leon

I have a call into Scott right now to have an impromptu executive meeting. We certainly want everyone to feel comfortable bidding. I imagine our meeting will happen this evening but at the very latest tomorrow to discuss this. It's hard to get such important people together at once ...and, he might have a life. Thanks for the vote of confidence so far in the auction. To be frank we felt that with the policies in place this would be a non-issue....Learn something new everyday.... regards

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Posted By: Kenny Cole

Mike makes good points. So does Ryan. I personally would love to have full ownership disclosure in every auction I participate in. I'm not sure it would change anything I do, but I suppose it might make me feel better when I'm bidding a lot of money on an item and trusting the house.

IMO, when it is all said and done, trust IS the issue. A given auction house can say anything, be it Mastro, REA, Barry Sloate, or any of the others. I agree that transparency is best, but generally speaking, who is going to know if they are not accurate in some pertinent respect? I don't know that there is an absolutely fool-proof answer, but at least Scott and Leon have pledged to keep their auction records in perpetuity. Understanding that there will probably be some criticism about how that works in practice, it at least demonstrates an attempt to deal with the very issue which is now a concern -- which I suggest is indicative of good faith.

I have heard rumors that certain auction houses can get better grades for cards than can others. I have no idea if that is true or not, but I frankly am more concerned about the prospect of buying an over-graded card from an auction house which does so much business with a grading company that it is given a favor than I am about buying a card from an auction sponsored by someone I know, with (a presumably) already graded card, who has pledged to keep their auction records in perpetuity, even if they own that card. Maybe that's just me. In any event, I think I'll go ahead and bid on the cards I want in the auction. To those of you who bow out, thank you. That gives me a better chance to win the cards I want than I might otherwise have had.

Kenny Cole

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Posted By: Adam

I think this is all silly. I am going to bid in this auction regardless.

I will point out, however, that I was going after a T206 Green Cobb graded PSA 4 in REA's recent auction (I didn't end up winning it), and there was even a disclosure along the lines of "the guy who provides REA's internet connection owns this card."

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Posted By: john w

Adam,

I believe that you phrased it best - "...this is all silly." Trust is everything.

John

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Posted By: cmoking

"After our original discussion on this topic I put an asterisk next to all lots I owned. It barely registered a whimper, and I stopped doing it. Nobody really seemed to care."

I cared. I cared a lot. Frankly, it probably didn't change my bidding pattern, but I still really appreciated that. I wish you continued that policy. IMO, the more transparency the better.

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Posted By: barrysloate

King- I certainly don't mind disclosing what I owned, but it was 2 lots out of 182. And I owned none in my January auction. If it makes bidders happy, I will be more cognizant of it next time.

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Posted By: leon

Scott and I spoke about this this morning. We believe we have a great system in place and have precuations set in writing that should alleviate any fears. A couple quick points to note.

1. While other auctions have a written rule allowing their employees to bid in their own auctions we have a written rule against it.
2. From day 1 of our auction we are NOT able to see "up to" or "max" bids. Quite honestly we don't care as it doesn't matter. We are an open book and will prove it. If you get outbid it was by someone (a real person) who is willing to pay more for the item.
3. We will never please everyone but hope we have earned the trust of the great majority of the hobby.

We are comfortable with the rules set in place. At the end of the day we don't feel it matters who owns an item as long as there is no shilling and you are getting exactly what you think you are. Thanks again for the confidence placed in us....
regards
leon

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Posted By: dstudeba

Barry -

I also noticed when you started and stopped this practice.

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Posted By: Brian

I'd like to know which lots are owned by the house. Will it keep me from bidding? Maybe. Does it influence my decisions? Absolutely.

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Posted By: barrysloate

Dan- I'm not sure I even consciously stopped the practice. I think because my entire January auction was consignments, it slipped off my radar. And because only the two lots in the May auction were mine, I didn't think it was important.

I now realize disclosure is important so I will be sure to asterisk my lots next time. I have no problem revealing the ones I own.

To take this a step further, what about someone selling lots he owns on ebay? Does everyone feel there is a need for disclosure there too?

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Posted By: Al C.risafulli

My personal opinion is that when I'm bidding on eBay, I'm not paying a buyer's premium to the house, so it's not important for me to know which lots are house-owned.

I prefer the disclosure when I'm bidding with an auction house, however.

-Al

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Posted By: Brian

I forgot to ask -- why would an auction house be against this disclosure?

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Posted By: Jeff Lichtman

Kenny brings up a good point. Just because an auction house says something is so, i.e., that they don't allow employees to bid, they don't commit fraud (using shills to bid or run people up) and they will disclose lots that they own doesn't mean they are telling the truth. That being said, when they make certain pronouncements and then are easily caught in lies due to the multitude of witnesses which exist they are setting themselves up for a possible criminal prosecution. I suppose in order to gauge which auction house is telling you the truth when they make such annoucements of virtue, you have to figure which principals of the auction houses are sociopaths and willing to break the law.

Edited to add: And for what it's worth, transparency is huge. The more the better. If one trusts the auction house, the additional transparency will only engender more good will. The auction houses that refuse to provide transparency are usually either hiding something or give the appearance that they are hiding something. There is no downside to transparency is my point.

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Posted By: Joe D.

Leon,

If I am reading your update correctly -
I think it is unfortunate that you discussed this issue and still decided not to disclose.

The whole thing begs the question:
Why not disclose?

What specifically is the fear by the auction house that would lead them to listen to this concern - but yet decide to still not disclose?

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Posted By: Jason L

...until I get enough money to particpate in one of these!
Then it's life or death

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Posted By: Bob C

Trust, but Verify was a signature phrase of Ronald Reagan. He used it in public, although he was not the first person known to use it. When Reagan used this phrase, he was usually discussing relations with the Soviet Union and he almost always presented it as a translation of the Russian proverb "doveryai, no proveryai" (Trust, but Verify). At the signing of the INF Treaty he used it again and his counterpart Mikhail Gorbachev responded: "You repeat this phrase every time we meet," to which Reagan answered "I like it."

My feelings are Mr. Reagan's signature phrase also works well in the world of auctioneering particularly as it relates to the discussion/s in this thread. Bidders or potential bidders should not be blinkered to material facts such as house ownership of lots offered.

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Posted By: Scott Mt. Joy

Another possible bidder who thinks an auction house should give a full disclosure of lots they own. My first auction bidding and winning was Sloates a year ago and one of the reasons why was his disclosure of his personal lots. It does make a difference.

One thing to consider, by not disclosing it, it makes me feel like you have something to hide. Even if you don't have anything to hide, this directly affects my level of trust I have for your auction house.

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Posted By: barrysloate

Hi Scott- I certainly have nothing to hide and was happy to share my personal lots right on this board (granted, after the auction). I suppose I would blame leaving them out to indifference. But I see this is a bigger issue than I imagined, and I will conduct things differently next time.

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Posted By: Scott Mt. Joy

Thx Barry and I hope you add the notations back on the lots you own in your next auction. When I used Your I meant all auctions. I have total faith in your auction and have been happy the times I won and they were well under the max bids I placed, happy camper.

I was more relating to the B & L auction in that being a first time auction with no history and considering a large amount of the lots are owned by the house (which is cool by me) that a full disclosure would be the right thing to do to promote trust. The fact that they have been reluctant to post a list of all their lots does bring up a red flag in my books and very well might keep me from bidding.

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Posted By: barrysloate

To Scott M. and Everyone,

I don't think I need to speak for Leon and Scott but I will. I don't believe their position on disclosure should raise any red flags at all. I think there is a reason for what they are doing, but they need to explain it themselves. I don't doubt that every aspect of their auction will be conducted ethically and professionally.

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Posted By: boxingcardman

"One thing to consider, by not disclosing it, it makes me feel like you have something to hide. Even if you don't have anything to hide, this directly affects my level of trust I have for your auction house."

Called "the appearance of impropriety"; a good argument for disclosure.

Another good argument is that several potential customers have stated that it does matter to them. Why needlessly alienate potential customers.

Finally, there are a pile of auction houses; why not differentiate your product from theirs by going the transparency route?

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