Heritage Live Auction -- Black Swamp debacle

[calvindog]

Agreed.

[glynparson]

They only graded one at a time, just listed current pop numbers and made no reference to possible future population numbers. I do not see how that is fraudulent? This was done all the time in the late 1990's when modern got hot. Could a lawyer please explain? That said it was nice of the family to do it like they did but I have to agree with Jeff I can't see Heritage or any Auction house selling them this way if they owned the cards.

[Rich Klein]

Look, a family found cards in the attic -- those cards are worth x dollars, the hobby got national pub, more people will look in their attics, basements, etc.

Maybe a few more finds make the rounds. Meanwhile, the HOBBY gets great pub -- and the type we like.

And could YOU have done any better for the family?

Rich

[Wymers Auction]

I talked to many people outside of the hobby and they asked me if I had heard of this find. It was on the news in the papers on talk shows. I think they did their job and the bidders did theirs. That day estimates aside true market value for these lots were determined.

[David R]

Originally Posted by glynparson

What if they only graded one at a time, just listed current pop numbers and made no reference to possible future population numbers. I do not see how that is fraudulent? This was done all the time in the late 1990's when modern got hot. Could a lawyer please explain? That said it was nice of the family to do it like they did but I have to agree with Jeff I can't see Heritage or any Auction house selling them this way if they owned the cards.

Agreed. And I don't think there would be anything fraudulent about that approach Glyn. And I do think an auction house could auction the cards without misleading hyperbole that might be considered fraudulent. Barry Sloate's descriptions when he did his auction were a good example - he showed a picture of the card with an accurate description of the condition and perhaps a few adjectives without a lot of superfluous BS. You don't need a lot of hyperbole and puffery to sell a PSA 10 Wagner or a PSA 9 Cobb. Perhaps any other approach than the one used by Heritage was out of the question once all the news reports about the details of the find hit the press, but it certainly affected the prices in a negative fashion IMHO.

[Matthew H]

Originally Posted by David R

Agreed. And I don't think there would be anything fraudulent about that approach Glyn. And I do think an auction house could auction the cards without misleading hyperbole that might be considered fraudulent. Barry Sloate's descriptions when he did his auction were a good example - he showed a picture of the card with an accurate description of the condition and perhaps a few adjectives without a lot of superfluous BS. You don't need a lot of hyperbole and puffery to sell a PSA 10 Wagner or a PSA 9 Cobb. Perhaps any other approach than the one used by Heritage was out of the question once all the news reports about the details of the find hit the press, but it certainly affected the prices in a negative fashion IMHO.

David, how would they know which one would grade a 10 without showing them all to PSA?

[David R]

Originally Posted by Matthew H

David, how would they know which one would grade a 10 without showing them all to PSA?

They wouldn't. They could have them graded and then auctioned in small batches. That was just an example.

[Peter_Spaeth]

Originally Posted by David R

They wouldn't. They could have them graded and then auctioned in small batches. That was just an example.

And then the pops would reflect how many were out there. And the huge premiums from being pseudo 1 of 1s would be lost. Or are you suggesting they somehow show them all to PSA, get them pregraded, but don't actually get them formally graded?

[David R]

Originally Posted by Peter_Spaeth

And then the pops would reflect how many were out there. And the huge premiums from being pseudo 1 of 1s would be lost. Or are you suggesting they somehow show them all to PSA, get them pregraded, but don't actually get them formally graded?

I was suggesting that they look at the cards or have someone who knows a little bit (not a grading company)look at them, pick out a few of the nicest ones first, have those graded, and then auction them off. The pop reports wouldn't show how many were out there because they wouldn't have them all graded at once. This of course depends on someone other than a grader at PSA or SGC being able to look at the cards initially and be able to tell generally which ones are in the nicest shape so that they can be sent in for grading :-)

[David R]

Originally Posted by Peter_Spaeth

And then the pops would reflect how many were out there. And the huge premiums from being pseudo 1 of 1s would be lost. Or are you suggesting they somehow show them all to PSA, get them pregraded, but don't actually get them formally graded?

Peter,
Let me suggest something else. Would there be anything wrong or fraudulent in this situation: I find 10 t206 Wagners in my attic that are in such good condition that they would grade between 7 and 9. I don't tell anyone about it. Instead, I pick out the nicest one, have it graded, and give it to an auction house to sell it for me. Over time I do the same with the rest. In this situation, does anyone really think I have a duty to "the hobby" or anyone else to disclose that I found 10 of these Wagners before I sell any? And can anyone really argue with what seems to me is a pretty self-evident point: I would make a lot more if I don't disclose them all or have them graded at the outset.

[benjulmag]

Originally Posted by David R

Agreed. And I don't think there would be anything fraudulent about that approach Glyn. And I do think an auction house could auction the cards without misleading hyperbole that might be considered fraudulent. Barry Sloate's descriptions when he did his auction were a good example - he showed a picture of the card with an accurate description of the condition and perhaps a few adjectives without a lot of superfluous BS. You don't need a lot of hyperbole and puffery to sell a PSA 10 Wagner or a PSA 9 Cobb. Perhaps any other approach than the one used by Heritage was out of the question once all the news reports about the details of the find hit the press, but it certainly affected the prices in a negative fashion IMHO.

IMO, Heritage had a legal duty to disclose all information in its exclusive possession that a reasonably prudent bidder would regard as material when evaluating whether and how high to bid. Accordingly, after further reflection I believe it would have been fraudulent for Heritage to have concealed the extent of the find REGARDLESS WHAT IT CHOSE TO SAY OR NOT SAY WHEN MARKETING THE FIND AND WRITING THE CATALOG DESCRIPTION. Any reasonable bidder would have regarded as critically important information when bidding on say, the PSA 10 Wagner, that there were 22 other examples graded 8 or higher that would soon hit the market, a number of them being 9's (not to mention another 15 graded as 7s). Or that when deciding what to pay for a PSA 9 Cobb that there were 14 more 9's to be soon released to the market. The final impact upon market value of the great majority of "find" cards once the find was fully absorbed by the hobby arguably would ten-fold. If this is not material information to a prospective bidder I'm struggling to know what is. In saying this I recognize others may disagree, and I respect that, but these are my views.

EDITED TO ADD in response to a subsequent point that I do not believe Heritage could have avoided this legal obligation by putting its head in the sand once it opened the box and saw the 700 E98s, and choosing to submit for grading only a select few. In this instance they would still be in exclusive possession that there were hundreds and hundreds more, many being superstars, that to the eye looked to be extremely high grade. I know if I was thinking on bidding on one of the select few that they had graded in this instance that I sure would want to know about the existence of these many other ungraded hundreds.