Interesting thread on the non-sports board

[calvindog]

Iggy, I'm satisfied with Chris Ivy's explanation. It is transparent and not unfair. That the usual Greek--woops, I mean Goodwin--chorus has not come out to loudly support Heritage also comforts me.

[Jim VB]

Originally Posted by calvindog

Iggy, I'm satisfied with Chris Ivy's explanation. It is transparent and not unfair.

Jeff,

My reading is a little different. Heritage has a rule in place that allows them to bid in their own auctions. Chris' explanation is transparent and not unfair, but he basically, just narrows down the times when Heritage DOES bid in their own auctions.

So there is still a gap between what they CAN do and what they DO do. I do happen to believe him, but their rules ought to be more narrow in scope and more specific about what they are doing.

[Fred]

The bottom line is that the prices realized in the auctions influenced by house or consignor bidding creates a somewhat inflated view of the prices realized.

Whose to say that the house doesn't put a maximum bid on an item and that the consignor doesn't also bid it up. What happens if the house and consignor bid up the auction as the only two bidders (because the actual market value for the item is less) and the final hammer price (including juice) is used as a bench mark in value for that particular card. It's all bull$hit... lets make some money and to heck with the hobby(ist)... I suppose the above scenario doesn't play out too often but once is too much...

[buymycards]

Here are my thoughts: (As if anyone cares)

1. Bidding on items that are consigned to your auction. Totally unethical. The auction house has the chance to inspect the items and make a purchase offer before they are placed in the auction. Once the auction begins, then it should be hands off.

2. Bidding on your own items that you consigned to an auction house. Totally unethical.

3. An auction house putting their own items in their own auction. OK, as long as they are disclosed as their own items.

4. An auction house bidding on their own items in their own auction. Totally unethical.

5. Employees of an auction house bidding on items in their auction. Totally unethical.

Rick

[calvindog]

Originally Posted by buymycards

Here are my thoughts: (As if anyone cares)

1. Bidding on items that are consigned to your auction. Totally unethical. The auction house has the chance to inspect the items and make a purchase offer before they are placed in the auction. Once the auction begins, then it should be hands off.

2. Bidding on your own items that you consigned to an auction house. Totally unethical.

3. An auction house putting their own items in their own auction. OK, as long as they are disclosed as their own items.

4. An auction house bidding on their own items in their own auction. Totally unethical.

5. Employees of an auction house bidding on items in their auction. Totally unethical.

Rick

Now imagine if auction houses do all of these things -- and don't disclose any of this to its bidders. Suddenly, Heritage doesn't look so bad.

[PolarBear]

Originally Posted by calvindog

Now imagine if auction houses do all of these things -- and don't disclose any of this to its bidders. Suddenly, Heritage doesn't look so bad.

True, but being the least unethical compared to their peers, still isn't a place where a company should want to be.

[barrysloate]

Bobby- here's a hypothetical situation:

After you were high bidder at $1150, bidder #12 came in and left a ceiling bid of at least $1950. Then somebody else came in and left a bid of say $1800, which pushed bidder #12 near or at his maximum. Was there enough time between your bid of $1150, and the point you realized the bid was now $1950? That's a possible scenario.

As far as Heritage disclosing their questionable bidding practices, it is better that it is out front rather than hidden, but it still isn't a good thing. Given all the scandalous auction practices that have been revealed of late, this information can only get bidders angry.

[Wesley]

Originally Posted by buymycards

Here are my thoughts: (As if anyone cares)

1. Bidding on items that are consigned to your auction. Totally unethical. The auction house has the chance to inspect the items and make a purchase offer before they are placed in the auction. Once the auction begins, then it should be hands off.

2. Bidding on your own items that you consigned to an auction house. Totally unethical.

3. An auction house putting their own items in their own auction. OK, as long as they are disclosed as their own items.

4. An auction house bidding on their own items in their own auction. Totally unethical.

5. Employees of an auction house bidding on items in their auction. Totally unethical.

Rick

That pretty much sums up my thoughts as well, Rick. Whether it is spelled out in their policies or not, I am simply not comfortable with Heritage placing bids.

[calvindog]

Originally Posted by Wesley

That pretty much sums up my thoughts as well, Rick. Whether it is spelled out in their policies or not, I am simply not comfortable with Heritage placing bids.

Of course, you guys are right, but good luck finding a single auction company that is fully ethical and honest -- you simply will not. Finding one that does not break the law is difficult enough.

[E93]

"21. The Auctioneer or its affiliates may consign items to be sold in the Auction, and may bid on those lots or any other lots. Auctioneer or affiliates expressly reserve the right to modify any such bids at any time prior to the hammer based upon data made known to the Auctioneer or its affiliates."


The following scenarios are perfectly acceptable in a Heritage auction according to this rule as I understand it:

1. Chris Ivy can consign his own card. He can watch to see if any top all bids come in. When one comes in, with full knowledge of it, he can bid that person up to their maximum by stopping one increment short of the top all bid.

2. If no top all bid is placed, Chris can simply be an aggressive bidder in the closing minutes of the auction, continuing to artificially drive the price up, while watching who the other bidders (with knowledge of their previous bidding habits) are and how they are reacting. When it seems that his last bidding opponent won't go any further, Chris can simply withdraw ("modify") his last bid two seconds before the hammer falls, leaving the "underbidder" as the actual winner.

3. Chris can bid up a $1000 card of his own up to $4000, creating a new threshold of a "realized price" for that card. He can then re-sell the card in another format with that high number of a "price realized" on the record in places like VCP.


I don't know any of the folks at Heritage other than Peter (who I like) and have no evidence to suggest that they have done any of these things. But it seems reasonable to infer that they have these rules there for a reason. Chris Ivy suggested in this thread that they do not utilize the full powers of rule #21. If that is the case, why not change it. It leaves a terrible impression about the motivations and potential activities of the auction house. It makes me very uncomfortable bidding in their auctions.
JimB

[Wesley]

Maybe we will know soon enough whether Heritage's practices are legal or not. There is an ongoing lawsuit filed last summer in TX by a former Heritage employee or consultant that alleges shilling, bidding manipulation, RICO violations, etc. Who knows. It is possible their disclosures will be enough to protect them.