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Spectrum buys Noe coins, avoids litigation

The state of Ohio announced today it rejected a series of closed bids from dealers and instead sold a batch of rare coins and currency connected to a state scandal to Spectrum Numismatics International for $7.5 million.

The stock of collectibles was part of a $50 million Ohio Bureau of Workers’ Compensation investment with former Toledo-area coin dealer Tom Noe and is now part of the evidence in a criminal case against him.

The $7.5 million bid was the pre-set minimum that Spectrum agreed to pay if a so-called auction — one held over several days in a secret location and open only to select dealers who provided $10,000 deposits — did not raise more.

Six other bidders placed bids totaling nearly $2.03 million on 37 of the 100 lots for sale, said Ohio Attorney General Jim Petro’s office. Bidding was from March 21 to Wednesday.

Mr. Noe’s attorneys, in preparation for their defense of Mr. Noe, a one-time chairman of the Ohio Board of Regents and of the Ohio Turnpike Commission, inspected the auction/evidence room in Columbus and took pictures yesterday.

A Lucas County judge ordered the state to give the legal team access.

The minimum $7.5 million bid and deal with the state was part auction bid and part civil settlement because of Spectrum’s role in the controversial $50 million investment.

Spectrum Numismatics ran the Spectrum Fund, which was a subsidiary of Mr.
Noe’s $50 million Capital Coin funds he set up using money given him to invest by the Ohio Bureau of Workers’ Compensation. He seeded the fund with $6.5 million.

The fund, which bought and sold coins and collectibles, was managed through a restrictive contract with Spectrum Numismatics that gave the company exclusive rights to buy and sell the material.

The Spectrum deal was arranged by Development Specialists Inc., the firm hired by the state to liquidate the stock.

Comments

  • krankykranky Posts: 8,709 ✭✭✭
    And the guy from DSI was quoted in CW this week saying their only goal was to maximize the sale prices of the coins for the state.

    New collectors, please educate yourself before spending money on coins; there are people who believe that using numismatic knowledge to rip the naïve is what this hobby is all about.

  • If they only got 2.1M in other bids, then it looks like Ohio had a big pile of common date "stuff" that NGC had maxed-out.
    Get ready for 1000's of ordinary Morgans in MS65/66 and other commons to flood the auctions.image
    morgannut2
  • I wonder if the FBI would be interested in this?
    sounds like another buckeye scandal in the works.
    "Everyday above ground is a good day"

  • rlawsharlawsha Posts: 1,028 ✭✭✭


    << <i>I am an undisputed world class major player in auctions >>



    How humble of you...
  • WillieBoyd2WillieBoyd2 Posts: 5,034 ✭✭✭✭✭
    Sounds a little like the 1954 King Farouk coin auction.
    https://www.brianrxm.com
    The Mysterious Egyptian Magic Coin
    Coins in Movies
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  • SanctionIISanctionII Posts: 11,660 ✭✭✭✭✭
    I have a point of view, cynical to say the least, that stems from being a lawyer and that stems from possible political considerations.

    I understand that criminal and civil charges are pending against Mr. Noe and others. As to civil charges, civil cases primarily seek monetary damages. The party who sues seeking damages (the State Of Ohio) must prove that the wrongful conduct of the defendant (Mr. Noe) legally and factually caused a financial loss. Since the State Of Ohio funds were invested in coins and since numerous coins have been recovered from the defendants, a question becomes what is the value of these coins. The value can best be ascertained by selling them in the market.

    If, upon selling the coins in the market, the sales proceeds equal or exceed the amount of money the State Of Ohio invested, the State will not be able to prove it suffered "damages" as a result of the wrongful acts of the defendants. In that case, the defendants would prevail in the civil action(s) filed against them for damages.

    Strange how the auction of these coins did not take place in the manner that coin auctions are usually held (auction brochures prepared picturing/describing each coin and released to market the coins; lot viewing at no cost to potential bidders; coins sold one at a time, etc.).

    If I were the defense lawyers for Mr. Noe, I would get all information I can about the who, where, what, when, why and how of this auction and sale to Spectrum. I would also obtain a list of every coin sold to Spectrum. I would then monitor the resale of each coin by Spectrum (when, under what auction procedures, to whom and for how much). If the coins on resale bring prices far in excess of what Spectrum paid, I would seek to introduce evidence at trial of what happened to support a legal defense that the State Of Ohio failed to act prudently to "mitigate its damages" (i.e. if a tenant leaves 18 months before his lease expires, the landlord must take reasonable efforts to rerent the space, if he does not do so and if the tenant proves the space could have been rerented at equal or greate rent within 30-60 after the tenant left, the tenant can avoid being held responsible for 18 months rent since the landlord did not "mitigate his damages" by renting to another tenant after 30-60 days).

    To prove a "failure to mitigate damages" defense, Mr. Noe and his lawyers would have to hire experts to investigate the sale to Spectrum and Spectrum's resale.

    Turning from the legal to the political, it seems that those who want to see Mr. Noe and his associates go down in flames to embarass his political contacts would find it easier to gain political traction if it is shown the State Of Ohio suffered financial loss. If the coins were sold resulting in a profit to the State Of Ohio, the political value of this "Ohio Coingate Scandal" would not be as great.

    Cynical, I know, but entirely possible.
  • CaptHenwayCaptHenway Posts: 31,499 ✭✭✭✭✭
    What are the chances we will ever find out what those coins that sold for $7.5 million cost the fund?
    TD
    Numismatist. 50 year member ANA. Winner of four ANA Heath Literary Awards; three Wayte and Olga Raymond Literary Awards; Numismatist of the Year Award 2009, and Lifetime Achievement Award 2020. Winner numerous NLG Literary Awards.
  • I am a resident of The state of Ohio. I hope that I am wrong, but I doubt that my state will recover from all the mis-deeds of the Bob Taft administration, in my lifetime. The Taft name once had a very high place in the state of Ohio, but no more. Very sad to see.
    Gary
    image
  • sanction II's comment's make sense for the States motivations. As for Spectrum, I've given my speculations for them to get involved at all-- ie. they were already a party to the investment. I'm tring to think of a state I would prefer to live in less than Ohio--nope, that's the worst.
    morgannut2
  • FatManFatMan Posts: 8,977
    This is about polictics so you can throw common sense and what is best out the window. I suspect that Spectrum just won the political lottery. Too many people don't want this fund to recover its rightfull value for political reasons. They can fix the blame of the loss based upon the $7.5 million sale and score political points. If this went to a true auction and brought big money this would blow the whole game. Sorry Laura, you are a victum of politics here.


  • << <i>sanction II's comment's make sense for the States motivations. As for Spectrum, I've given my speculations for them to get involved at all-- ie. they were already a party to the investment. I'm tring to think of a state I would prefer to live in less than Ohio--nope, that's the worst. >>



    THE PEOPLES REPUBLIC OF KALIFORNIA ....maybe?
    "Everyday above ground is a good day"

  • roadrunnerroadrunner Posts: 28,303 ✭✭✭✭✭
    It would appear that the state of Ohio did everything in its power to ensure the coins sold to Spectrum. My gut feel says they would have returned a profit. Whether that helps Mr. Noe or not is irrelevant to me, but that fact that the coin hobby gets another smack is irritating. With thousands of bidders shut out, the coins realized far less than they could have otherwise.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • CoinosaurusCoinosaurus Posts: 9,614 ✭✭✭✭✭
    Talk about cutting off your nose to spite your face........
  • BigEBigE Posts: 6,949 ✭✭✭
    So whats going to happen when the people of the state of Ohio see that these coins bring 12M? I guess the exact margin will have to be covered up---------BigE
    I'm glad I am a Tree
  • mrearlygoldmrearlygold Posts: 17,858 ✭✭✭
    Here's something someone mentioned to me:

    Mr. Noe and his attorneys are hoping that the sale of their 'assets' will hit 50-55 mil, in which case they'll say 'no harm, no foul.' But how much should it be? That's where the story is.

    image

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