Is this unethical?

MrEureka · September 28, 2004 7:01AM

If I own a coin that's worth about $1000 in 64 and 15K in 65, and if all of the services have repeatedly graded it 64, would it be unethical to offer you the coin raw for 5K with the promise that I'd pay 15K for it if you got it into a PCGS 65 holder? I think NOT. I figure (more or less) that it's just another proposition bet and I'm laying 7:2 odds against the coin ever working.

Also, should I feel obligated to disclose that I've tried the coin many times before? Or is it enough to just let the proposed odds speak for themselves? After all, it should be obvious to you from the odds that I don't think the coin is likely to ever grade 65. Do I really have to explain WHY I think the coin is a long shot?

Finally, what's the difference between my deal and this one?

Edited to change the link.

coinbuf · September 28, 2004 7:05AM

Sounds like I've heard this one..but where??

And yes this is unethical in my book.

Chris

K6AZ · September 28, 2004 7:06AM

Hypothetically speaking, if you crack out a 64 and sell it for 65 money, hinting that it is a 65, you are a numismatic fraud in my opinion. Omitting material facts is fraud.

IrishMike · September 28, 2004 7:11AM

It's unethical to suggest even by a reward that it might be a 65 when you the seller have submitted the coin several times. Its just another sleazy way to make a buck.

Bear · September 28, 2004 7:16AM

Someday, very soon, all of the hanky panky going on by many participants in the Coin Industry,

will cause collectors like myself to slam shut the wallet and the walls of Jerico will come tumbling down.

Toning is really not far from again falling out of favor, if only for collectors to protect themselves. It would seem,

in general, the Coin Industry needs an immediate refresher course in integrity, honor and honesty. Dont know if the

course would take, but it is certainly worth a shot. Wonder what ever happened to the posse? I needs me some hangings

to become a believer.

MrEureka · September 28, 2004 7:16AM

if you crack out a 64 and sell it for 65 money, hinting that it is a 65, you are a numismatic fraud in my opinion.

First, I'm offering the coin for a third of 65 money. (5K vs 15K)

Second, I could offer the coin at 15K and state emphatically that I believe the coin should grade 65 if I really believe it, which I could.

And besides, you should know I'm not a fortune teller. I can't possibly know if the coin will ever grade 65 at the services. So how could you take my opinion as more than just that?

greghansen · September 28, 2004 7:19AM

I don't think its wrong. It is a species of fraud to omit a material 'fact' to a prospective buyer. It is NOT fraud to omit a material 'opinion' to the possible buyer. Both this and the toned coin question involving failing to disclose a material 'opinion'. Whether a coin is AT vs. NT or MS64 vs. MS65 is not a numismatic FACT...they are numismatic opinions.

My problem is this. If you made your propositon bet and offer to pay $15K if the buyer got it in a PCGS MS65 slab, and then someone found out about the coins history and posted here the number of times that it had failed to get MS65, and you THEN threatend to sue that person because they were screwing with your auctions, then I think you would be treating the 'whistleblower' unfairly and unethically.

As Irish Mike pointed out on another thread, it really goes back to the way the dealer himself choses to do business. The dealer should be prepared to have his business practices found out and disclosed and each dealer needs to ask themselves whether their own business practices can withstand that type of scrutiny.

MrEureka · September 28, 2004 7:23AM

the Coin Industry needs an immediate refresher course in integrity, honor and honesty. Dont know if the course would take, but it is certainly worth a shot.

I'd be glad to teach a course in numismatic ethics at the ANA Summer Seminar if enough people here would care to take the course. I could also promise a great group of guest speakers. Any takers?

IrishMike · September 28, 2004 7:23AM

This is real simple for me, if you offered me that deal and stated that you had submitted it several times and it failed then its up to me to decide based upon my own lack of numismatic talents whether to accept the deal. In fact I would most likely refer business to a dealer that was that candid. Frankly I get tired of dealers pleading ignorance for something they or should know and I don't do business with them.

NoGvmnt · September 28, 2004 7:28AM

"By the way, I am quite confident that it is original bag type toning"

Operative word here being "type" as in Tiffany "type" lamp.

I wonder how many coin collectors would be bidding on Anacondas offerings if they knew he was a lawyer.

Jim

wondercoin · September 28, 2004 7:28AM

It is all about EDUCATION. Collectors and dealers alike need to EDUCATE themselves as best they can in order to make the best decisions possible.

I recently won a coin on ebay for more than $1,300. One of the first things the seller (collector) told me after the auction was that he had paid "35 CENTS" for the coin raw. Should he have disclosed that in his ebay auction? I can assure if he had, it would not have made a difference in my personal bid amount. The seller received roughly 3,500x the price he paid for the coin in the ebay auction. I have no problem with the amount I paid for the coin - if he would have found the nickel in a roll of nickels, he could have made 20,000x

Wondercoin

mgoodm3 · September 28, 2004 7:29AM

I would say that you shouldn't try to sell a coin for more than it's worth at present (MS64) based on what the price could be as a 65. If you sell it for what the 64 is worth and offer than same deal, fine. If you think it can realistically get into a 65 slab you should try to do it yourself instead of having some poor schmuck take on the risk.

RBinTex · September 28, 2004 7:34AM

Why is it that real estate people (& even car dealers) have to disclose any pertinent events (someone was murdered in the house, the car was totaled for flood damage, etc.) in the chain of title but coin dealers fight tooth & nail to make it acceptable to NOT have to do the same (ETHICAL) thing?

Oh, that's right - IT'S THE MONEY STUPID!

lloydmincy · September 28, 2004 7:36AM

A lot of ETHIC posts going on around here.

I agree with IRISHMIKE. As a collector, you are taking a huge risk you may be paying 5X the value for a 64 coin. I wouldnt take that risk. I would only buy it as a 64, then try to upgrade it myself. I find it FISHY when coins are in one graded slab, and the seller says it is better than what the holder says!!! I see this a lot on EBAY, which I stay away from. Or better yet, the coin is RAW, and would be a PCGS or a NGC whatever. Well, then get it in a SLAB!!

MrEureka · September 28, 2004 7:37AM

If you think it can realistically get into a 65 slab you should try to do it yourself instead of having some poor schmuck take on the risk.

Right! Why would I want to leave 10K on the table for a "poor schmuck"?

dlimb2 · September 28, 2004 7:37AM

It is a come on...the person offering a coin like that would 1) if he believed it to be authentic, had it graded 2) would not be offering such a rediculous auction....and yes knowing the coin not to be authentic is highly unethical....

Proofquarter · September 28, 2004 8:04AM

If you have to ask your self if it is unethical then it is.

ER · September 28, 2004 8:04AM

<< Someday, very soon, all of the hanky panky going on by many participants in the Coin Industry,

will cause collectors like myself to slam shut the wallet and the walls of Jerico will come tumbling down.

Toning is really not far from again falling out of favor, if only for collectors to protect themselves. It would seem,

in general, the Coin Industry needs an immediate refresher course in integrity, honor and honesty. Dont know if the

course would take, but it is certainly worth a shot. Wonder what ever happened to the posse? I needs me some hangings

to become a believer. >>

Thank you Bear.

IrishMike · September 28, 2004 8:39AM

Besides Andy your ego isn't as huge as other *cough* dealers.

ColonialCoinUnion · September 28, 2004 9:02AM

Unethical? No, I don't think so.

Extremely clever way to sell a coin? Yes, PT Barnum would be proud.

As I've said before, Anaconda is a very skillful marketer of coins. And I prefer to buy my coins from less skillful marketers.

mr3holesinone · September 28, 2004 9:13AM

Here is a way to deal with the situation which would not make the dealer feel guilty in the least. Put your price on the coin, doesn't matter if it's $3,000 or $5,000, price doesn't matter. Let the buyer know how many times you've submitted the coin and what it has come back as. (I bought it in NGC65, I've tried NGC and PCGS twice and it has come back as a 64 each time so far. Disclosure is important and as long as you're trying to do the right thing with a guilt-free conscience you've got to let a buyer know if you're selling the coin as a very possible upgrade.) Then it's time to negotiate from the price you've set and where 64/65 money is. If you're tired of the submission game let the buyer know you would love to pay the 65 money once it's holdered. Grading standards change/have changed often enough that someone with enough experience could buy the coin and wait until they relax a little and try again. Just depends on who wants to tie up a little money for a while.

My opinion is that a collector/investor should be given more facts than another dealer because a dealer should know better and therefore accept the risks for a little greed. I'd also add that the more you would like this buyer to be a repeat customer the more information you should give them also.

dbldie55 · September 28, 2004 9:26AM

Why do some people try to justify things by coming up with a totally unrelated analogy?

Myqqy · September 28, 2004 9:30AM

the Coin Industry needs an immediate refresher course in integrity, honor and honesty.

I like the sound of that!

I get tired of dealers pleading ignorance

I like the sound of that too......

MrEureka · September 28, 2004 9:31AM

Why do some people try to justify things by coming up with a totally unrelated analogy?

Help us out. Why are they unrelated? If you think it's obvious, please just humor me.

dbldie55 · September 28, 2004 9:38AM

<< Why do some people try to justify things by coming up with a totally unrelated analogy?

Help us out. Why are they unrelated? If you think it's obvious, please just humor me. >>

I don't think the situation is the same as "Is it unethical to receive a coin at face value, have it graded and sell it for it's currently graded value?"

BigMoose · September 28, 2004 9:59AM

Andy, the type of scenario you described has happened several times to me over the last few years of collecting. Two dealers, both of whom I consider close friends, frequently buy very high end slabbed coins and then try them at the services for upgrades. If they don't work, they get offered to collectors sooner or later. These are EXACTLY the type of coins I am interested in, very high end for the grade with exceptional eye appeal. These types of coins are never offered at bluesheet bid. There is always a premium attached to them as they are very high end and/or possess exceptional color, luster etc. You can spot these coins immediately because they look better than the stated slab grade and you wonder why they are not in a higher grade holder as soon as you see them. I don't ask these dealers how many times they have tried to upgrade the coin in question. If I really like the coin and the price is somewhere within the realm of reason, I buy it. I have enjoyed very good success in upgrading these types of coins. For the ones that don't upgrade, I know that I still have a very high end coin that I am proud to own. Mr. Bingham( Monsterman on the boards ) has made a very nice career out of buying very high end coins from dealers that didn't immediately "work" for the upgrade, then getting them upgraded somewhere down the line. It takes faith in your grading abilities and your eye for quality. So, no, I don't believe that your proposition is unethical. However, any collector who wants to play this game needs to be confident that he is a very good grader within his collecting series, can spot exceptional quality versus good quality, and can tell NT from AT with a high degree of accuracy. If there is any question in my mind about a particular coin, I pass. TomT.

FrattLaw · September 28, 2004 10:08AM

Okay Andy how about this one --

I take your offer. I happen to be friends with a finalizer at (insert TPG name here). You're not. I have connections you don't. I offer the finalizer $5000 of the $10,000.00 profit I'm going to realize when I sell the coin back to you if he puts the coin in a MS65 slab for me. And he does.

Is that ethical? No one gets hurt. You get your coin in a MS65 holder, I get $5k and the finalizer makes $5k.

Its a slippery slope and there's no bright line test in ethics. Ethics are personal in nature. There's no right answer.

Michael

MrEureka · September 28, 2004 10:09AM

BigMoose - So would it be unethical to offer my deal to someone less capable than you?

MrEureka · September 28, 2004 10:14AM

I take your offer. I happen to be friends with a finalizer at (insert TPG name here). You're not. I have connections you don't. I offer the finalizer $5000 of the $10,000.00 profit I'm going to realize when I sell the coin back to you if he puts the coin in a MS65 slab for me. And he does. Is that ethical?

Of course not.

No one gets hurt. You get your coin in a MS65 holder, I get $5k and the finalizer makes $5k.

Wrong. Someone ends up with the coin at 15K based on the mistaken belief that the grade on the holder is an honest professional opinion.

Its a slippery slope and there's no bright line test in ethics. Ethics are personal in nature. There's no right answer.

Not always. But in your scenario, it's black and white. But you knew that already.

By the way, nice try to hijack the thread!

FrankHKP7 · September 28, 2004 10:14AM

I might be missing the point of the thread, but here's my philosophical education busting out...

We need to remember because an action is legally permissible, it does not mean it's moral.

Cavaet Emptor; the seller has no ethical obligation to disclose any prior discriminatory action levied by another party (ie sent to TPG 4 times w/o upgrading) relevent to his product.

In any philosophic argument, the trumps argument come into play: Ethics trumps morality, morality trumps all else concerned.

It's immoral, not unethical.

I prefer to be moral. I try to make Aristotle proud.

Arete!

MrEureka · September 28, 2004 10:17AM

It's immoral, not unethical.

Convince me it's immoral.

FrattLaw · September 28, 2004 10:19AM

<< Wrong. Someone ends up with the coin at 15K based on the mistaken belief that the grade on the holder is an honest professional opinion. >>

Yeah, you do. The guy that tried to run the scam in the first place. Seems very ethical to me. You're buried in a overgraded POS. Didn't factor that into the odds -- did ya Andy?

Michael

BigMoose · September 28, 2004 10:21AM

Andy, I don't believe it would be unethical to make your offer to any collector. I am good in certain series and am a moron in other series. I tend to stay away from those series where I am a moron. I think it is the responsibility of the collector to bring as much knowledge and experience to the table as possible, before going after expensive collectibles of any kind.

MrEureka · September 28, 2004 10:23AM

Didn't factor that into the odds -- did ya Andy?

Nor did I factor in the possibility that the buyer could sell the coin for PQ money if it didn't work for him.

Doesn't mean I'm letting you hijack my thread, though.

FrankHKP7 · September 28, 2004 10:35AM

<< It's immoral, not unethical.

Convince me it's immoral. >>

The seller is in the position to knowingly harm the buyer.

MrEureka · September 28, 2004 10:38AM

The seller is in the position to knowingly harm the buyer.

That assumes that the services are 100% consistent AND that all other buyers require slabs. Obviously, that's not the case. It is obvious, isn't it?

nankraut · September 28, 2004 10:47AM

What BEAR said:
Tuesday September 28, 2004 3:16 PM (NEW!)

Someday, very soon, all of the hanky panky going on by many participants in the Coin Industry,

will cause collectors like myself to slam shut the wallet and the walls of Jerico will come tumbling down.

Toning is really not far from again falling out of favor, if only for collectors to protect themselves. It would seem,

in general, the Coin Industry needs an immediate refresher course in integrity, honor and honesty. Dont know if the

course would take, but it is certainly worth a shot. Wonder what ever happened to the posse? I needs me some hangings

to become a believer.

elwood · September 28, 2004 10:56AM

<< Nor did I factor in the possibility that the buyer could sell the coin for PQ money if it didn't work for him. >>

This was my view of your hypothetical. At $5K the coin may actually be worth that as a PQ, 641/2 kind of coin when the spread is as large as the one you stated.
While the Morgan in question has a significantly larger downside, if it doesn't work.

DMWJR · September 28, 2004 10:59AM

<< Why do some people try to justify things by coming up with a totally unrelated analogy?

Help us out. Why are they unrelated? If you think it's obvious, please just humor me. >>

Ok Andy, you seem to be looking for a fight. The indefensible position is this: The coin in question is an 1881-S, for sale at $3,800. The ultimate buyer of this coin is not getting a $1,000 coin, or even a $380 coin. They are getting a $72 coin. Do you really thing TBT would sell a $72 coin for $72 when he could get $380 . . . .???

Conder101 · September 28, 2004 11:19AM

No, I don't think it is unethical, in fact I think it is very ethical. You can OFFER the coin for any price you feel like. (No one HAS to pay it.) If you feel it is better than the typical 64 why shouldn't you be able to offer it for more than 64 money? (And if you were never able to ask more than price guide 64 money for ANY coin in a 64 holder, why would prices ever change?) Plus the dealer is committing himself to a market price if the buyer does get it to upgrade. (Guaranteing the purchase of a potential Coffin Coin. And don't say that since the dealer couldn't do it after several tries that it won't happen. We've all heard many stories about coins submitted multiple times that get dumped only to be upgraded the first time by the new owner.)

Unethical would be if the new owner gets the upgrade and the dealer then backs out on his guarantee.

nwcs · September 28, 2004 11:25AM

<< 

<< Wrong. Someone ends up with the coin at 15K based on the mistaken belief that the grade on the holder is an honest professional opinion. >>

Yeah, you do. The guy that tried to run the scam in the first place. Seems very ethical to me. You're buried in a overgraded POS. Didn't factor that into the odds -- did ya Andy?

Michael >>

Assuming this is PCGS or NGC, the new owner submits to them for a grade review. They agree it is a 64. So they send compensation of the difference. If it is done right, the TPG is the only one who loses money. In many ways it sounds like one of the many car insurance schemes where two people coordinate to defraud an insurance company by making some poor guy hit one of them.

MrEureka · September 28, 2004 11:26AM

Do you really thing TBT would sell a $72 coin for $72 when he could get $380 . . . .???

What makes you think TBT knows how much he can get for his coins? I've been buying and selling coins for 30 years and I can't think of a single coin I sold for which I was sure I got the last dollar.

But that's not the reason I posted this thread. I posted the thread because I consider Anaconda's eBay listing a "proposition bet" and thought it deserved a reappraisal in that context.

DMWJR · September 28, 2004 11:32AM

<< What makes you think TBT knows how much he can get for his coins? I've been buying and selling coins for 30 years and I can't think of a single coin I sold for which I was sure I got the last dollar. >>

A stark reminder to us collectors of how dealers think of us.

MrEureka · September 28, 2004 11:34AM

A stark reminder to us collectors of how dealers think of us.

Huh?

Conder101 · September 28, 2004 11:37AM

<< I take your offer. I happen to be friends with a finalizer at (insert TPG name here). You're not. I have connections you don't. I offer the finalizer $5000 of the $10,000.00 profit I'm going to realize when I sell the coin back to you if he puts the coin in a MS65 slab for me. And he does.

Is that ethical? No one gets hurt. You get your coin in a MS65 holder, I get $5k and the finalizer makes $5k. >>

No, both the buyer and the grader have acted unethically. The buyer by using his personal position and bribery to influence a supposedly unbiased opinion, and the grader by not remaining unbiased and selling his "opinion".

Nic · September 28, 2004 11:45AM

Agree with Andy and Big Moose and frankly, do not understand the uproar. K

FrankHKP7 · September 28, 2004 11:50AM

<< The seller is in the position to knowingly harm the buyer.

That assumes that the services are 100% consistent AND that all other buyers require slabs. Obviously, that's not the case. It is obvious, isn't it? >>

I can't argue against that!

Great thread Andy!!

So much for philospohy...

In my heart of hearts coupled with being a newbie at the coin thing, I'd say an uneducated buyer could easily get suckered into parting w/ a decent amount of money. I'd think a buyer that was going to drop that kind of scratch would know WTF he was looking at before he pulled the trigger. If it's a slabbed 64, I'd only pay 64 money for it regardless if it has a 3:1 shot of upgrading.

dorkkarl · September 28, 2004 9:31PM

NOT unethical.

K S

STEWARTBLAYNUMIS · September 28, 2004 10:04PM

Andy - This statement is SOOOO NOT YOU.Why are you soliciting such a line of Bull$hit ?

I've bought many coins from you.Odds,buybacks and possible upgrades HUH ?

Caveat Emptor is the general rule.Why sell a coin and say PCI will grade it 66,Anacs will grade it 63,PCGS will grade it64 and NGC will grade it 65 ?

This proposition sounds like a 3 card monte dealer talking on the streets of New York in 1991.

Stewart

BAJJERFAN · September 28, 2004 10:20PM

Andy
The only little problem with your scenario is that the graders at both NGC and PCGS will likely remember the coin after having seen it and graded it a 64 umpteen times. The new owner/submitter would have little chance of upgrading the coin.

Julian · September 28, 2004 10:23PM

I have at least fifty coins in my inventory that I believe are undergraded by the TPG. I have stickered them with my grade on them and have priced them according to the way that I grade them.

Just as soon as there is a concrete grading system that is acknowledged by all that it is essentially perfect, then someone could state that the TPG is the end all and pricing something differently from that price level would be fraudulent.

That is not the case, at this time, and I would resent anyone saying that I am unethical.

Numismatics is a hobby and not a financial tool.

What two people agree an item is worth is what it is worth at that time.

There is nothing unethical about the position that Andy posted.

There is no grading God, as yet. There is no pricing God.

Fraud and ethics come into play when misrepresentations about investment come into play.

Is this unethical?

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