New lawsuit accuses PWCC of massive shill bidding

[Peter_Spaeth]

Presented without comment.
https://www.nytimes.com/athletic/632...-sports-cards/

[BobbyVCP]

Now did ALT file against PWCC and Brent? Or is it with Fanatics that has been the owner for almost 2 years now..I could not read the article since it requires payment

[samosa4u]

I'm a subscriber:

Sports card marketplace Alt filed a lawsuit against former auction house PWCC — now owned by Fanatics — alleging fraud and breach of auctioneer’s duty, according to a lawsuit filed Wednesday in New York Supreme Court.

The complaint alleges PWCC conducted a widespread, years-long scheme of shill bidding, using internal and external actors to artificially inflate auction prices for high-value sports trading cards. Alt alleges PWCC retained access to confidential maximum bid information to drive up prices and mislead buyers.

Alt is asking for at least $13.7 million, which is the total losses the company estimates it sustained attributable to PWCC’s alleged fraudulent conduct. Alt is also seeking additional compensation for punitive damages.

Between 2021 and 2023, Alt said it spent more than $10.7 million on PWCC’s platform while winning 707 auctions and obtaining 809 items. In late 2023, Alt alleges to have learned that PWCC’s leadership knew about shill bidding and directly encouraged and allowed other external parties to place fake bids on certain auctions, boxing out the authentic bidders and artificially inflating prices.

Alt also alleges that PWCC flagged when high net worth bidders, such as Alt, were participating in PWCC auctions, and arranged, solicited and encouraged shill bids to increase the bidding.

“For years, customers around the world trusted PWCC’s assurances that when they made a bid on a sports card on their site, that those transactions were fair, transparent and free from manipulation — today’s complaint shows that those assurances were patently untrue,” Alt CEO Leore Avidar said in a statement to The Athletic. “PWCC’s leadership knowingly engaged in fraudulent practices, inflating auction prices and skewing the fair market value for the entire collecting community, including against one of its biggest competitors, Alt.

“This lawsuit is about more than just one company, it’s about ensuring the integrity of the trading card market as a whole and holding bad actors accountable.”

A PWCC spokesperson said both sides had conducted discussions for months before Wednesday’s lawsuit, including evidence for Alt’s claims. The spokesperson said Alt provided none and this is attempt at a “payday.”

“Alt has filed a completely baseless lawsuit against PWCC that lacks any substantive evidence,” the spokesperson said. “Even though the accusations they are claiming occurred before PWCC changed ownership in May 2023, we carefully looked into their allegations and found zero evidence to support their claims.”

This isn’t the first time PWCC has been accused of shill bidding. Leading online marketplace eBay suspended PWCC from selling items on its platform in August 2021 after eBay determined PWCC had engaged in shill bidding on auctions.

“eBay’s policies and standards were designed to ensure a trusted marketplace where our community can transact with confidence,” eBay said in a statement sent to customers in 2021 when explaining the PWCC ban. “If we determine that a buyer or seller is not acting in good faith, eBay takes this seriously and takes action.”

PWCC began its own auction platform after the eBay ban. Fanatics announced the purchase of PWCC in May 2023. The company launched its own auction platform, Fanatics Collect, replacing the PWCC brand soon after its launch in July 2024.

In the lawsuit filed Wednesday, Alt claims that PWCC “engaged or was complicit” in bid manipulation in auctions that included the following cards Alt purchased through PWCC:

- 2017 Panini Prizm Patrick Mahomes Gold rookie card, numbered to 10, Professional Sports Authenticator (PSA) grade 10: $528,000
- 2003 Exquisite Collection Kobe Bryant Limited Logos patch auto, numbered to 99, PSA 10: $360,000
- 2018 Panini Prizm Josh Allen Gold Vinyl rookie, numbered to five, PSA 10: $264,000


Alt also questions the legitimacy of a PWCC auction surrounding the Luka Dončić 2018 National Treasures Logoman patch autographed one-of-one BSG 9 graded rookie card that sold for $3.12 million in 2022. The same card sold in a private sale for $4.6 million in March 2021, via Card Ladder.

Alt dropped out of the bidding for the card, but alleges “(a) a member of Group 1 (a group of approximately six individuals Alt alleges fraudulently and collusively bid up items in PWCC auctions) was the seller, and other members of Group 1 submitted shill bids to drive up the price of this card, (b) the winning bidder did not complete the auction sale by paying the winning price to PWCC, (c) PWCC nevertheless publicized this ‘sale’ as if it had actually been consummated, and (d) PWCC discussed with members of Group 1 a private sale at a different price from the ‘winning’ auction price.”

[Peter_Spaeth]

Thank you did not realize the story was behind a paywall.

[Peter_Spaeth]

In case anyone is interested.
https://iapps.courts.state.ny.us/nys...JTmduWtbJ6hA==

[raulus]

Favorite passage so far:

The frequency with which other bidders matched or closely approached Alt’s maximum bids was especially unlikely in legitimate auctions because, during that time period, Alt had idiosyncratic incentives to acquire inventory to jump start its own marketplace, which led Alt to submit maximum bids that it considered abnormally high.

Translation:

We were doing stupid stuff and bidding like drunken sailors because we had our own monetary reasons for wanting to rip other people off ourselves. The fact that we weren't winning everything hands down with our stupid bids is a clear sign that the fix was in!

[Peter_Spaeth]

4. Alt also came to learn that PWCC solicited, assisted or facilitated bid
manipulation by a group of individuals who fraudulently and collusively bid up items in PWCC
auctions. PWCC sought bids from the members of this group, and did not enforce PWCC’s
stated policies, such as its policy that non-payment for items won in an auction would result in a
ban from participation. PWCC’s deliberate actions and/or inaction fostered a corrupt auction
market culture where fraudulent or unethical conduct did not result in any consequences.

[Peter_Spaeth]

22. Alt was informed that PWCC, including its CEO and another senior
executive, had access to maximum bids submitted by Alt and others despite PWCC’s
representation that maximum bids were “private and … only viewable by the client that
submitted the bid.”
23. Alt was also informed that PWCC, which “financially pre-qualified”
bidders for its premier auctions, flagged to its personnel when high net-worth bidders such as Alt
were bidders in PWCC auctions, and, on many such occasions, arranged, and/or solicited shill
bids to drive up the auction price. Alt learned that PWCC’s senior executives communicated
within PWCC that a high net-worth bidder’s participation in auction bidding presented a golden
opportunity to set a new record comp or sales price.
24. Alt was informed that PWCC arranged or solicited shill bids from both
internal and external sources. Alt learned that certain accounts that submitted bids in (but did not
win) PWCC auctions had identifiers indicating that the bids came from within PWCC, despite
PWCC’s representation that “[a]ll employees are prohibited from bidding on PWCC Auction
items.”

It will be VERY interesting to see who Alt's source is (or sources).

[Eric72]

A Josh Allen card sold for more than a quarter million dollars.

Damn, those were crazy times.

[jingram058]

Yet another reason for the inflation that has prevailed in "the hobby". Shenanigans like this.

[Peter_Spaeth]

2016 revisited.

34. Alt also learned that PWCC solicited, assisted or facilitated bid
manipulation by others in connection with auctions on PWCC’s platform. In particular, PWCC
was aware of, and solicited bids from, a group of approximately six individuals (“Group 1”) who
fraudulently and collusively bid up items in PWCC auctions, including items that members of
Group 1 had put up for auction, notwithstanding PWCC’s representation that PWCC clients
could not bid, individually or collusively, on their own items.
35. In some instances, a member of Group 1 submitted the winning bid in a
PWCC auction, but did not consummate the transaction by paying the purchase price. PWCC’s
stated policy was that non-payment would result in a ban from participation in PWCC auctions.
PWCC, however, took no action and facilitated continued bid manipulation by members of
Group 1 by allowing such members to continue to participate in its auctions despite nonpayment.

[Peter_Spaeth]

Originally Posted by jingram058

Yet another reason for the inflation that has prevailed in "the hobby". Shenanigans like this.

So Alt alleges:
49. In addition, the fraudulent conduct by PWCC and the individuals with
whom it was complicit drove up comparable prices across the broader trading card market. Most
buyers and sellers (including Alt) relied on recent “comps” to determine trading card values.
During the relevant timeframe, PWCC was one of the biggest players in the auction space, and
PWCC comps were anchoring prices, influencing expectations, and driving market momentum.
Alt estimates that PWCC’s fraudulent conduct inflated market-wide trading card prices by over
40 percent.

[ClementeFanOh]

"Presented without comment"- except for the FIVE comments after it. Some
people just can't help themselves...

Trent King

net54- the place where some people think that verbosity equates to quality

[bcbgcbrcb]

Of course, this is the only place where this type of conduct went on during 2021, right?

[Peter_Spaeth]

Originally Posted by ClementeFanOh

"Presented without comment"- except for the FIVE comments after it. Some
people just can't help themselves...

Trent King

net54- the place where some people think that verbosity equates to quality

SMH. A significant lawsuit with serious and far reaching accusations against a company we all know and most have dealt with, and this is your focus?

[raulus]

Originally Posted by Peter_Spaeth

SMH. A significant lawsuit with serious and far reaching accusations against a company we all know and most have dealt with, and this is your focus?

Dammit, if you proclaim to not have a comment, then you are disbarred from commenting in perpetuity. Get it straight, man!

I guess we could argue that there should at least be a minimum moratorium on commenting after presenting without comment. But maybe we need some site guidelines on the statute of limitations for anyone who declines to comment.

Or maybe you just need to reserve the right to comment in a later post, which may or may not follow within a timeframe at your discretion?

[Peter_Spaeth]

Originally Posted by raulus

Dammit, if you proclaim to not have a comment, then you are disbarred from commenting in perpetuity. Get it straight, man!

I guess we could argue that there should at least be a minimum moratorium on commenting after presenting without comment. But maybe we need some site guidelines on the statute of limitations for anyone who declines to comment.

Or maybe you just need to reserve the right to comment in a later post, which may or may not follow within a timeframe at your discretion?

LOL. The funny thing is 99 percent of the several posts were just quoting from the Complaint which I was naive enough to think might actually be informative and interesting.

[swarmee]

Welcome back to the buyer's group. Although this far after the occurrences/ownership changes, just looks like sour grapes.

The "buyer's group" was a known thing a few years back, and who doesn't remember when the PSA fanboy bigwig paid $30K for the Bowman Musial PSA 10 (also altered) after discussing his max bid with Brent before the auction ending.

[Peter_Spaeth]

Originally Posted by swarmee

Welcome back to the buyer's group. Although this far after the occurrences/ownership changes, just looks like sour grapes.

The "buyer's group" was a known thing a few years back, and who doesn't remember when the PSA fanboy bigwig paid $30K for the Bowman Musial PSA 10 (also altered) after discussing his max bid with Brent before the auction ending.

If memory serves that guy came right back for a 10 Fisk, or something like it. Was not dissuaded a bit.

[sbfinley]

I'm not a lawyer, nor have I ever bought/sold a business - but when you purchase a business I assumed that you also take on the potential liability of the business before you on civil matters. IE: Bayer and Round Up.

Edit: Nevermind, the way I read the initial post I assumed the suit named Brent.

[drmiraculous]

Can't wait to see them lean into "accepted industry standards". I rarely purchase from AH and when I have I have been upfront when contacting about registering to bid about not being a big player, simply after a single item here and there. I have also been repeatedly surprised at how low the final costs were and have acquired each of the items I went after with that approach. I found it odd then, maybe not so much now.

[ajjohnsonsoxfan]

Interesting. Most knew there was high probability this was happening. Will be good to finally get proof if this lawsuit sees the courtroom.

[Snowman]

Lol. Good luck with that, Alt. Idiots gonna idiot.

Anyone want to place a side bet on how this one turns out? Zero chance of Alt winning is my position.

[Tabe]

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

[Lorewalker]

Originally Posted by Peter_Spaeth

SMH. A significant lawsuit with serious and far reaching accusations against a company we all know and most have dealt with, and this is your focus?

When you are an angry fella and hate the world what else could you possibly expect?

[tjisonline]

Originally Posted by Tabe

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

i'm def not giving the old pwcc regime a pass but it sure sounds like ALT needs money in a bad way and are reaching here. they bought cards from pwcc at the peak to have cards in their marketplace? yeah, didn't turn out to be a good idea.

[Leon]

Originally Posted by Tabe

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

I think, but not sure, I read that the amount includes punitive damages.

.

[sacentaur]

CGC recently lost a $10 million lawsuit (they jury deliberated less than an hour) from a couple who restored/recreated high-end comic books claiming they were slandered by CGC (who also refused to grade their books), so I wouldn’t be so sure that this action has no chance of prevailing (even via a smaller settlement).

[Balticfox]

Hmmmm, shill bidding? How many hours do you think it will take now for a class action lawsuit to be filed against PWCC?

And what did the initials PWCC stand for anyway?

[Peter_Spaeth]

Originally Posted by Snowman

Lol. Good luck with that, Alt. Idiots gonna idiot.

Anyone want to place a side bet on how this one turns out? Zero chance of Alt winning is my position.

Curious why you think that? From the complaint it sounds like Alt has one or more former PWCC people as a source.

[parkplace33]

Where is Brent these days?

[Republicaninmass]

Originally Posted by Peter_Spaeth

Curious why you think that? From the complaint it sounds like Alt has one or more former PWCC people as a source.

For some reason, unbeknownst to all, maybe even himself, he always sides with PWCC. Even in the Am hours, when PWCC says time for bed, he heads upstairs and gets under the covers.

[raulus]

Originally Posted by parkplace33

Where is Brent these days?

I thought he had a job somewhere in the industry, with some larger player like Fanatics?

[Peter_Spaeth]

Originally Posted by raulus

I thought he had a job somewhere in the industry, with some larger player like Fanatics?

No, Fanatics bought PWCC from him and punted him.

[nolemmings]

Originally Posted by Tabe

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

Their damages analysis is creative but speculative, and not likely to carry the day. They assert that they lost $4.5M from the cards they won in PWCC auctions, then allege that PWCC's conduct artificially and wrongfully inflated values throughout the hobby by over 40%, such that cards they won in other auctions were overpaid by another $9.2M. That's how they get to $13.7M. See paragraphs 48-51. Good luck with that.

Personally I thought the Complaint was rather meh and lacked some basic allegations on causation and malice, even if those can be inferred and later added through amendment. Still, it could be interesting to follow this, especially if affidavits/declarations are part of the record. I would expect Brent and spouse to be added if the matter continues, and will pony up some $$$ if it quietly settles.

[perezfan]

Originally Posted by Balticfox

Hmmmm, shill bidding? How many hours do you think it will take now for a class action lawsuit to be filed against PWCC?

And what did the initials PWCC stand for anyway?

Profiting
While
Cutting
Ccards

[Peter_Spaeth]

Originally Posted by Tabe

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

Part of that is their claim (no comment on the merits) that PWCC's activities artificially inflated the entire market. The same claim that many made with regard to Mastro, so it's nothing new.

[Exhibitman]

Originally Posted by raulus

Favorite passage so far:

The frequency with which other bidders matched or closely approached Alt’s maximum bids was especially unlikely in legitimate auctions because, during that time period, Alt had idiosyncratic incentives to acquire inventory to jump start its own marketplace, which led Alt to submit maximum bids that it considered abnormally high.

Translation:

We were doing stupid stuff and bidding like drunken sailors because we had our own monetary reasons for wanting to rip other people off ourselves. The fact that we weren't winning everything hands down with our stupid bids is a clear sign that the fix was in!

[raulus]

As a business owner, the whole situation fascinates and flummoxes me.

It sure seems like PWCC had a perfectly solid business that was basically printing money through normal operations by operating their boring little monthly eBay auctions. Seems like only a fool would mess with that. I guess you could argue that it was too boring and pedestrian as far as business models go, without a whole lot of flash and pizzazz.

And yet the only way that these allegations make any sense is if PWCC decided that they needed even more, and the only way to get there was by engaging in shenanigans and monkeyshines, because they thought they could get away with it?

I suppose to some extent they did get away with it, in terms of not going to jail or facing any serious consequences, aside from the business basically collapsing, and who knows how much (or little) in value accruing to the original ownership in the sale to Fanatics. I think we've had some debates around here about that point, but none of us seems to really know whether the original ownership actually got any cash in the sale. If they got nothing, then that has to hurt. If the payout was 8 or 9 figures (seems unlikely to me), then I guess it worked out well for them in the end.

But for my money, particularly with the benefit of hindsight, it sure seems like a terrible idea to take a perfectly solid business and basically bet the farm by chasing a little more. But maybe as an accountant, I'm just way too conservative in my approach to managing my business to swing out of my shoes at every pitch that comes my way.

[Peter_Spaeth]

Originally Posted by raulus

As a business owner, the whole situation fascinates and flummoxes me.

It sure seems like PWCC had a perfectly solid business that was basically printing money through normal operations by operating their boring little monthly eBay auctions. Seems like only a fool would mess with that. I guess you could argue that it was too boring and pedestrian as far as business models go, without a whole lot of flash and pizzazz.

And yet the only way that these allegations make any sense is if PWCC decided that they needed even more, and the only way to get there was by engaging in shenanigans and monkeyshines, because they thought they could get away with it?

I suppose to some extent they did get away with it, in terms of not going to jail or facing any serious consequences, aside from the business basically collapsing, and who knows how much (or little) in value accruing to the original ownership in the sale to Fanatics. I think we've had some debates around here about that point, but none of us seems to really know whether the original ownership actually got any cash in the sale. If they got nothing, then that has to hurt. If the payout was 8 or 9 figures (seems unlikely to me), then I guess it worked out well for them in the end.

But for my money, particularly with the benefit of hindsight, it sure seems like a terrible idea to take a perfectly solid business and basically bet the farm by chasing a little more. But maybe as an accountant, I'm just way too conservative in my approach to managing my business to swing out of my shoes at every pitch that comes my way.

Never underestimate greed and hubris. There are countless criminals who probably could have made a nice living with a legitimate version of their business.

[raulus]

Originally Posted by Peter_Spaeth

Never underestimate greed and hubris.

And I guess a willingness to cross a lot of red lines. If the allegations are true, then there doesn’t seem to be much in the way of a moral compass in play.

[Peter_Spaeth]

Originally Posted by raulus

And I guess a willingness to cross a lot of red lines. If the allegations are true, then there doesn’t seem to be much in the way of a moral compass in play.

BTW Brent was hooked in with notorious card doctors amost from day one. Not like he had a completely legit business then went south.

[raulus]

Originally Posted by Peter_Spaeth

BTW Brent was hooked in with notorious card doctors amost from day one. Not like he had a completely legit business then went south.

Fair enough.

And maybe that's how the business really survived, with the auction platform being more of a side show, with the real action in the shadows.

Not sure if that's 100% true, simply because it seemed like they were running huge volumes of cards through their eBay auction service by 2017 and beyond. But maybe the initial success from all the doctoring helped to jumpstart the auction service?

[Peter_Spaeth]

Originally Posted by raulus

Fair enough.

And maybe that's how the business really survived, with the auction platform being more of a side show, with the real action in the shadows.

Not sure if that's 100% true, simply because it seemed like they were running huge volumes of cards through their eBay auction service by 2017 and beyond. But maybe the initial success from all the doctoring helped to jumpstart the auction service?

I think there was certainly a point where the brand was strong enough that it would have done fine had Brent gone straight. And much of that growth was, to be fair, due to his creativity and hard work and vision.

[BobbyVCP]

He did a few bad things but also did a lot of good as well...

[samosa4u]

Was anything ever done during the whole SlabGate scandal ?? Noooope !! And I don't expect anything to happen this time!
Nothing to get excited over, folks!

[jayshum]

Originally Posted by samosa4u

Was anything ever done during the whole SlabGate scandal ?? Noooope !! And I don't expect anything to happen this time!
Nothing to get excited over, folks!

Isn't this a civil case instead of criminal? Isn't it easier to get a favorable judgement in a civil case?

[parkplace33]

Originally Posted by BobbyVCP

He did a few bad things but also did a lot of good as well...

I think way more bad than good. Hell, they got kicked off EBay!

[BobbyVCP]

Originally Posted by parkplace33

I think way more bad than good. Hell, they got kicked off EBay!

Really you actually believe that is from shill bidding....LOL

[Mark17]

Originally Posted by BobbyVCP

Really you actually believe that is from shill bidding....LOL

Then why?