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  #1  
Old 09-08-2007, 02:21 PM
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Default Auction House Conflict of Interest

Posted By: Aaron M.

I wrote a rather impassioned reply to a post that I think was just deleted, but I think what I wrote should be read anyway. My post was in response to a specific mention questioning why REA stresses their anti-shilling bid technology if they weren't aware of shilling going on elsewehere:

I also think your point about Robert Edward Auctions and their "Honest-Auto-Bid" format is well-founded. Why else would Rob stress this so much if he wasn't aware that many auction houses engage in shill bidding?

I mean at the end of the day by allowing his employees and executives to bid on Mastro auctions, Doug Allen cannot prove that in-house shill bidding does not occur. In fact you almost have to be a moron not at least be suspicious because the opportunity and motivation are so strong and obvious for Mastro employees to engage in shilling

Instead of bidding confidently with the knowledge that Mastro employees are forbidden from bidding on Mastro auctions (thus strongly lowering the oppurtunity to shill), you basically have to trust that Mastro employees are all honest, all are completely immune to any sort of financial interest in shilling, and never, ever, ever bid on an item they have in the auction just to see its price increase -- rather they always bid because they have a genuine interest as a collector in that item. How can Doug prove that? And why should we as bidders even be asked to trust them on it?

Think about it: All Mastro employees know that their jobs and reputations and hope for continuing to receive high-level consignments hinge on Mastro receiving strong prices on items. It never enters any of their minds that if they bid up items that it helps secure their own continued financial security by helping to keep the Mastro train rolling?

And what sort of check and balances do they have? Doug knows the bids? So he asks "Employee A" if he bid on a item out of genuine interest or shilling? What's the guy going to say? "Yes, I shilled, please fire me"? Good grief.

Without peering into the minds of Mastro employees we (including Doug Allen) can never know if that employee bid because of genuine interest or to shill. And with the motivation and opportunity to shill so strong and obvious and easy, we should not be asked to make this judgment or worry about it occurring in the first place.

Edited to re-title the thread. As has been fairly pointed out to me, this issue should be addressed with respect to auction houses in general and not single out one in specific.

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Old 09-08-2007, 02:45 PM
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Default Auction House Conflict of Interest

Posted By: barrysloate

Aaron- you are opening a huge can of worms here and you are just speculating. Plus, you are singling out one auction house when there are dozens of others.

I know a lot of bad things go down in this industry but you need to be careful what you say.

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Old 09-08-2007, 02:54 PM
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Default Auction House Conflict of Interest

Posted By: Harry Wallace (HW)

Aaron, why are you only mentioning Mastro? Besides REA, what auction houses claim to not allow employees to bid?

Sotheby's and Christies are the two largest auction houses in the country and allow their employees to bid on items.

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Old 09-08-2007, 02:57 PM
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Default Auction House Conflict of Interest

Posted By: Aaron M.

Please feel free to expand my orignal post to include any auction house which allows its employees to bid on their auctions.

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Old 09-08-2007, 02:58 PM
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Default Auction House Conflict of Interest

Posted By: Joann

Someone had started a thread (now deleted)about the difference between the way collectors view dealers versus auction houses when it comes to certain practices. Aaron's post does single out Mastro for discussion, and the original post was a far more generic (and interesting, I thought) question. However, I think that if Aaron's post were read in the context of the original thread it might make more sense.

Joann

ETA: The original post mentioned a wide, wide variety of practices. Self-interested bidding by auction houses and their employees was only one of many mentioned. Aaron's response zero's in on that comment.

OK. I think I should get out of the 'splaining business, because I'm not doing a very good job of it here!

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Old 09-08-2007, 03:00 PM
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Default Auction House Conflict of Interest

Posted By: Harry Wallace (HW)

Aaron, besides REA, what major auction houses do not?

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Old 09-08-2007, 03:00 PM
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Default Auction House Conflict of Interest

Posted By: leon

I deleted the original post/thread and there were no additional posts when I deleted it. The original poster had DELETED all of the words already and there was absolutely nothing there. Sorry if there was a response in the making...but again, the original post was deleted by the poster so I deleted the thread. Everyone knows my stance on deleting a post or thread when it's not anonymous....regards

edited spellin'

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Old 09-08-2007, 03:05 PM
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Default Auction House Conflict of Interest

Posted By: Joann

That's right - the original author had deleted all content from the first post before the thread was deleted. I thought it was an interesting post that could have raised some good discussion, but he deleted it soon after posting.

Joann

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Old 09-08-2007, 03:09 PM
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Default Auction House Conflict of Interest

Posted By: barrysloate

When I worked as an independent contractor at Sotheby's they not only allowed me to bid on Barry Halper material, but had a pre-printed form called an employee bid sheet. They had no problem with it at all, and just asked me to leave book bids and not raise my hand in the auction room. They allowed it and I don't see it as a big deal.

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Old 09-08-2007, 03:10 PM
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Default Auction House Conflict of Interest

Posted By: Aaron M.

Barry, I don't think this is opening a can of worms. I think it is dealing directly with an issue within the collecting community that needs to be addressed.

For the record, despite philosophical differences with some of Mastro's policies, I have always enjoyed good experiences with their auctions and never been disappointed with any of the items I've won in their auctions. I also intend to continue to bid on Mastro auctions, until I have reason otherwise.

But I do want to to see them and other auction companies reform in a climate of what I believe to be increased pressure to do so. My feelings are very much in line with what MEARS made public recently and REA has followed for years. Specifically I want to see auction houses:

1. Discontinue allowing its own executives and employees bid on their auctions.

2. Either discontinue the practice entirely or disclose if a a card has in any way been altered prior to grading.

3. Either discontinue the practice entirely, or disclose if an authenticator owns an items he authenticated.

4. Discontinue the practice of auctioning items the auction house itself owns.

To me, rather than a can of worms these are "the basics" of reform that we should be pushing for. From there we can tackle more complicated issues, but these are the "no-brainers" that we shouldn't receive any resistance from the various auction houses over.

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