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Does anyone know the Marx Cards backstory? Where did all the money go? If you receive $1M to submit cards on others’ behalf, how hard is it to earmark the funds and place them into a separate account?
Heck - all Marx Cards had to do was place the $1M into an interest-bearing account and leave it alone, until it was time to pay PSA, and it would’ve made free money off other people’s grading fee money. A 1% interest account would’ve netted Marx Cards $10,000.00 in free interest money. |
#2
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What he prob did was like like a king for a year off his submitters money, kinda like a pyramid scheme, he was on top. So sad I feel terrible for the victims of his con job. |
#3
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Considering the influx of hobby newcomers over the past 18 months, it's not surprising to see the amount of scandals on the rise.
Seven in three weeks is a breakneck pace, though. Even the most paranoid among us were probably caught a bit off guard by the frequency with which these news stories are breaking. I wonder if the new 1099 reporting rules were a factor, even if only indirectly. The timing is certainly uncanny.
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Eric Perry Currently collecting: T206 (132/524) 1956 Topps Baseball (190/342) "You can observe a lot by just watching." - Yogi Berra |
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Nah, but next January when the 1099s show up will be very interesting... and I'm interested in seeing which of the main consignment firms start requiring KYC and 1099s for their auction houses. The entire industry has been set up to hide funds for years.
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-- PWCC: The Fish Stinks From the Head PSA: Regularly Get Cheated BGS: Can't detect trimming on modern SGC: Closed auto authentication business JSA: Approved same T206 Autos before SGC Oh, what a difference a year makes. Last edited by swarmee; 01-22-2022 at 06:44 PM. |
#5
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I'll keep following it. I expect both criminal and civil liability due to the lack of escrow while operating in the capacity of a financial managers, and the lawsuits from submitters trying to get their funds back in bankruptcy court. (ed note: I am not a lawyer, so this is only my personal untrained thought.)
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-- PWCC: The Fish Stinks From the Head PSA: Regularly Get Cheated BGS: Can't detect trimming on modern SGC: Closed auto authentication business JSA: Approved same T206 Autos before SGC Oh, what a difference a year makes. |
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Eric Perry Currently collecting: T206 (132/524) 1956 Topps Baseball (190/342) "You can observe a lot by just watching." - Yogi Berra |
#7
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These group subs with their year delay are really fraught with peril.
__________________
My avatar is a sketch by my son who is an art school graduate. Some of his sketches and paintings are at https://www.jamesspaethartwork.com/ He is available to do custom drawings in graphite, charcoal and other media. He also sells some of his works as note cards/greeting cards on Etsy under JamesSpaethArt. Last edited by Peter_Spaeth; 01-22-2022 at 08:10 PM. |
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Sent from my SM-G955U using Tapatalk |
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Much will depend on the status of the cards themselves and if PSA is willing and able to get them back to the original submitters, hopefully graded. Marx must at least have records (one would hope) of who gave it what. If not, and the submitters are out their money which Marx collected then they have claims against Marx, but who knows if Marx has any assets that will be available in its bankruptcy proceeding. If it lost all its money on crypto....
__________________
My avatar is a sketch by my son who is an art school graduate. Some of his sketches and paintings are at https://www.jamesspaethartwork.com/ He is available to do custom drawings in graphite, charcoal and other media. He also sells some of his works as note cards/greeting cards on Etsy under JamesSpaethArt. Last edited by Peter_Spaeth; 01-22-2022 at 09:33 PM. |
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Pure guess on my part, but can see the aforementioned various factors putting a pinch on cash profit from operations, so they dip into funds being held to actually pay the grading fees, and figure they'll get caught up in the future. They don't worry about it when it comes time to actually pay grading fees to PSA in the interim as they become due because they expect to keep getting more continuing orders and grading fee deposits in. Well, then along comes the pandemic and all the PSA issues where they basically shut down new submissions for a while, and significantly jack up up the grading fees. So as a result, the continuous ongoing new submissions ends up taking a big hit, and with it, the influx of grading fee deposits they need to keep covering all the bills coming into Marx Cards, including the grading fee bills from PSA. Think about the timing of when all of this has been happening, and how PSA is finally starting to get caught up and billing people for those grading fees. Chances are Marx may have started doing the math and realized they weren't getting enough new deposits coming in to get them over the hump, realized all these PSA grading fee bills would soon be rolling in, and played the bankruptcy card now to try and get out of this. Not sure on the legal side if the people can come back at them. Don't know exactly how the contracts people entered into with Marx Cards (assuming there is some written document or agreement) are written and what they may say. I'll leave that to the attorneys on here if they want to weigh in. Wouldn't be completely shocked if the Marx Cards people end up not being personally liable, assuming the company was set up in an appropriate corporate or LLC form, which can then afford the owners protection from personal liability from company debts. Last edited by BobC; 04-13-2022 at 05:59 PM. |
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__________________
My avatar is a sketch by my son who is an art school graduate. Some of his sketches and paintings are at https://www.jamesspaethartwork.com/ He is available to do custom drawings in graphite, charcoal and other media. He also sells some of his works as note cards/greeting cards on Etsy under JamesSpaethArt. Last edited by Peter_Spaeth; 01-22-2022 at 09:38 PM. |
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This thread reminded me of the fake signed T206 scandal from a few years ago. Has anyone heard anything about that lately?
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Signed 1953 Topps set: 264/274 (96.35 %) |
#13
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I think you have your answer. If you check under the rug, I'll bet it's been swept under there.
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Don’t like the price hahah extend the bidding by a day, call it a system wide glitch. These dummies continue to bid with them, why not do it when you think prices are to low as a AH. There is nothing to lose nobody besides us, which is a small percentage of buyers in this industry care. The dealers love this Sh&t they can mark up their cards more biased off these pumped up auction numbers.
It’s so comical. Last edited by Johnny630; 01-23-2022 at 08:36 AM. |
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I figured as much. It's unfortunate.
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Signed 1953 Topps set: 264/274 (96.35 %) |
#16
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Like I said, I know nothing about them, so it would be a pure guess on my part if they can be held personally liable or not. Also no idea what other expenses, payroll, and so on they may have. My thought is that a huge drop in card submissions may have caught them and been the trigger to the bankruptcy filing now. Like you said, if it can be shown they intentionally ran it into the ground and stole the money, that's one thing. If they tried and it didn't succeed due to some bad moves or business decisions, that is something different, and they may be able to walk away. Still, bad for the hobby and the people getting screwed. You know, these people had been waiting a long time to get these cards graded. So if PSA just returns them, they're not only out the grading fees, but assuming they still need/want to get these cards graded, now they'll have to maybe resubmit the cards again and wait even longer. You know, if anyone over at the new PSA had half a brain, they could try to make this a positive PR move on their part by cutting these people some slack, and go ahead and maybe still grade cards for those that want that to happen, without making them resubmit and have to wait even longer. And maybe cut them a break and at least give them a half-way decent discount on the grading fees to possibly make up a little bit for what these people stand to lose that they originally paid to Marx Cards. They've got their fees artificially raised to lower submissions, so they wouldn't be losing money by giving these people a break on the fees. And as I said, it could be good PR for PSA. Last edited by BobC; 04-13-2022 at 06:01 PM. |
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They had $1 million apparently they had collected and knew they owed to a third-party, namely PSA. I can’t imagine there’s any excuse they acted in good faith in losing that money. It wasn’t their money to spend at that point.
__________________
My avatar is a sketch by my son who is an art school graduate. Some of his sketches and paintings are at https://www.jamesspaethartwork.com/ He is available to do custom drawings in graphite, charcoal and other media. He also sells some of his works as note cards/greeting cards on Etsy under JamesSpaethArt. Last edited by Peter_Spaeth; 01-22-2022 at 10:47 PM. |
#18
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I agree, on the surface it seems it may have been intentional, we just don't know what else may have been involved, and what assets, if any, are still in the company. I was giving them the benefit of the doubt, and assuming they were trying to run a fairly legit, ongoing company. And thus why I suspected it may have been more of a kiting scheme till things got.better, as opposed to an all out ponzi scheme, where they were in it from day one for a cash grab. I guess we'll find out as more details come out going forward. |
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