Kevin Keating responds to shill bidding allegations

[bcawly]

I sent the following email to Kevin Keating on February 9 after a review of Exhibit E and his response to the matter. Exhibit E standing alone does not disclose how the government's investigation confirmed collusion among specific parties to shill bid, it does clearly show the conflicted inter-party transactions that exist between the auction houses and those that do business with them.

There is the need for more transparent and verifiable auction practices and controls to detect and prevent shill bidding along the line I presented in my email to Kevin Keating that follows. It is my opinion, that there is a clear need for the major auction firms to step up and address this issue to ensure the integrity of their business practices. I stand behind my comments to Mr. Keating.

Bob Cawly



Re: Mastro-Legendary Auction's Shill Bidding Report Response
From Robert H. Cawly
To qualityautographs qualityautographs@msn.com

Kevin

Just let me say that after reviewing Exhibit E, it appears to me that you were also a victim of the shill bidding and that your bidding patterns were customary with many dealers and collectors that desire to take an early position on a number of lots to hold a place in extended bidding. In any event, the infraction is one of RELATED PARTY TRANSACTIONS which make you ineligible to bid. The more appropriate classification would be "Bids by Ineligible Bidders" as opposed to calling them all shill bids.

While the effect is the same as placing a shill bid, the implications are completely different. All reputable auction houses should post a list of Related Parties and make known the Related Party Policies which would include auction house employees, and employees of subcontractors, authentication firms and other related companies.

The real issues reside with the business practices of the auction firms. It is up to the auction house to enforce its own rules, not the bidders. The prudent auction house would have each auction overseen by an well known and reputable independent accountant that would oversee the bidding process, and audit the auction records. This one step would clearly establish what auction firms are interested in restoring honesty and integrity to our hobby and care about their firm's credibility. The expense of such a process would clearly be affordable and a sound investment.

Knowing of your credentials and reputation for integrity from people in the industry and notably fellow UACC members, let me express my full confidence in your response in this matter.

Robert H Cawly, CPA
UACC RD326

[prewarsports]

Kevin is one of the first big guys in the hobby that treated me fairly and honestly when I was a young man getting started in the hobby. I would go to shows in my early 20's and other big dealers would not even bother to stop and show me a card in their cases, while Kevin was very personable and for that I have always respected him. Getting to know him more over the years and having numerous encounters with him, I always thought he was one of the more respectable people in the hobby. It is not surprising to me at all there is a rational explanation for his name being on the list. I am happy he was able to clear the air.

Rhys Yeakley

[jimjim]

Not to drag up an old thread, but I was just on Kevin's website and I was surprised on his prices. He is charging 2-3x the going rate for most items. Do people actually pay his prices? I know he is one of the best in the hobby, but am not going to pay a premium for living modern day players.

[Duluth Eskimo]

Then don't pay it. You don't need to tell anyone you are not going to do it. People can charge whatever the hell they want for stuff. When it's your stuff, you can do what you want with it.

[Hankphenom]

Originally Posted by Duluth Eskimo

Then don't pay it. You don't need to tell anyone you are not going to do it. People can charge whatever the hell they want for stuff. When it's your stuff, you can do what you want with it.

+1

[jimjim]

I get it. You guys are dealers and you guys are friends with Kevin. I fully understand that you're defending him and all dealers. However, I was just wondering how a person so highly respected in the hobby can offer prices that are not competitive. That is my only question. I am sorry if I insulted anyone.

[ALR-bishop]

Maybe he is colluding with Levi and Dean to keep all their prices high so no one will buy anything and bring the hobby to a standstill.

[Hankphenom]

Originally Posted by jimjim

I get it. You guys are deslers and you guys are friends with Kevin. I fully understand that you're defending him and all dealers. However, I was just wondering how a person so highly respected in the hobby can offer prices that are not competitive. That is my only question. I am sorry if I insulted anyone.

Insulted? Where did you get that? And I don't see any defense of Kevin or "all dealers" in our responses. Where did you find those, exactly? The real question is: what's YOUR point? All collectors find what they perceive to be overpriced items everywhere they turn. Ebay, Online stores, shows, auctions, etc. So you don't buy them, simple as that. Have you ever told a dealer at a show that his stuff is overpriced? I didn't think so. Why bother? It's his business. I'm not an autograph guy, so I can't speak to Kevin's prices specifically, but I will tell you this. He's been the biggest vintage sports autograph dealer in the country for many years, and probably the most successful in dollar volume. I set up with him at the National each year, and he's swamped doing business from beginning to end. As for his website, he's had a full-time employee whose only job is handling that part of the operation for the last 25 years, so I'm guessing that does pretty well, too. I have this suggestion for you: give Kevin a call. He loves to talk about every aspect of the hobby, and he will be happy to explain anything you want to discuss, from hobby pricing in general to any individual autograph you might ask about. Maybe you'll both learn something.

[steve B]

Originally Posted by jimjim

I get it. You guys are deslers and you guys are friends with Kevin. I fully understand that you're defending him and all dealers. However, I was just wondering how a person so highly respected in the hobby can offer prices that are not competitive. That is my only question. I am sorry if I insulted anyone.

I don't think it's entirely how you're putting it.

For a dealer who has stuff that's "right" or in other words trusted to not be fake, some of the higher costs are related to the cost of replacing the inventory. The few autographs I've ever sold went for the going rate for what they were. Once popular football players who signed at shows, 8x10s with no certs but the show flyers and auto tickets. Originally $25, and it wasn't clear if that included the cost of the photo. Both sold for about the cost of an unsigned photo, which was typical. I was happy with that price.

But if I was a full time dealer? I'd have asked probably a bit more than 2-3x the going rate. Because I would have a need to keep those commons in inventory, and I'd have to pay at least the going rate to replace that inventory.
How many dealers would do well having none of the cheap stuff? Some, but for most dealers it's the volume of common items that make enough to support the business. And if the reputation becomes "they have good prices, but usually don't have what/anything I want" They won't last long. The same problem comes with being one of those guys who won't pay a decent price for stuff someone is selling. Get a rep as someone who lowballs every time and the really good stuff will never come your way.

All of the above is intended to be generic, I don't know Kevin, but I've hung around a lot of dealers and spent a trivial amount of time on their side of the table and that's part of the challenge they've got as I see it.


Steve B