Escala receives delisting notice

Frankcoins · October 7, 2006 11:25AM

Parent of Teletrade, Bowers & Merena, Spectrum Numismatics, A-Mark Precious Metals,

is delinquent in its regulatory filings.

Link

DRUNNER · October 7, 2006 11:41AM

Interesting . . .

Not being flippant at all . . . what might be the reasons / ramifications???

Drunner

Coxe · October 7, 2006 11:44AM

They have had a couple extraordinary issues this past year I think and they may be trying to get compliant with Sarbanes-Oxley. A lot of smaller cap companies have gotten into that bind and get delinquent in their filings as a result. I have had a couple of my stocks delisted temporarily because of little more than that.

Dog97 · October 7, 2006 11:56AM

Pink Sheet bound.

Frankcoins · October 7, 2006 12:05PM

<< They have had a couple extraordinary issues this past year I think and they may be trying to get compliant with Sarbanes-Oxley. A lot of smaller cap companies have gotten into that bind and get delinquent in their filings as a result. I have had a couple of my stocks delisted temporarily because of little more than that. >>

Not in this case

Link

IrishMike · October 7, 2006 12:08PM

Two words come to mind "due diligence". Always amazes me that companies fall down on this issue and don't really know what they paid for when they purchase a company.

Frankcoins · October 8, 2006 12:54AM

More

Bear · October 8, 2006 12:57AM

If this developement worsens, it could have a measurable,

negetive impact on the coin market.

robertpr · October 8, 2006 1:07AM

Yes, the stock is heading for the pink sheets. Of course, that could smooth out the stock volatility as well.

sinin1 · October 8, 2006 1:08AM

their stamp scam in Spain is going to get some people jail time probably

Coxe · October 8, 2006 1:10AM

<< 

<< They have had a couple extraordinary issues this past year I think and they may be trying to get compliant with Sarbanes-Oxley. A lot of smaller cap companies have gotten into that bind and get delinquent in their filings as a result. I have had a couple of my stocks delisted temporarily because of little more than that. >>

Not in this case

Link >>

What do you think the extraordinary issues I was referring to were? The filing compliance is directly relevant to the Spanish stamps and Ohio state cases as the stated figures could be used against them in any judgments and they also need to be S-O compliant to avoid other serious issues. They are in one tight spot right now. Dropping to the pink sheets for a while is definitely preferred over the risks in a filing now I bet.

seemyauction · October 8, 2006 1:11AM

If you own shares dump them....take the loss if you have too..right it off as a loss on your taxes.

If you bought anything from them get rid of it before the government takes over your collection....sell it, give it away...what ever you do don't get caught standing without a chair when the music stops.....and most important play bumb "I did not know anything about it." and stick to your statement at all costs.....

I can guarantee you NOTHING GOOD is going to come from this.....

Coxe · October 8, 2006 1:15AM

<< If this developement worsens, it could have a measurable,

negetive impact on the coin market. >>

A ripple but shouldn't drag any other folks with them. Their problems in Spain, even if the consequences reach their US assets, won't damage the coin market. The Ohio state scandal is a problem for those involved in the scandal. Yeah, it wasa matter in dumping the holdings on the market, but I think the scandal brought attention to coins as a lucrative candidate for investing that others might have lookedinto as a result. That's speculation though. It Escala went away, the others would carve up their marketshare pretty quickly. Heritage would be able to sustain their internet sales two (maybe three) times a week and eBay would get fatter too.

BigE · October 8, 2006 1:20AM

A latino looking character asked me for some spare coins the other day, I wonder if it was the Spainsh secret police

--BigE

Coxe · October 8, 2006 1:22AM

<< If you own shares dump them....take the loss if you have too..right it off as a loss on your taxes.

If you bought anything from them get rid of it before the government takes over your collection....sell it, give it away...what ever you do don't get caught standing without a chair when the music stops.....and most important play bumb "I did not know anything about it." and stick to your statement at all costs.....

I can guarantee you NOTHING GOOD is going to come from this..... >>

What is your basis for telling folks the government would have any lefitimate interest in coins purchased through them? A judgment in the matter, when if comes to assets, would be limited to their wholly owned assets. The government and other parties have no interesting in such purchased coins unless they were stolen property, which is not the matter here. Consigned coins on their premises could get held in suspense in a raid, which is not a likely occurrance in this kind of thing, until the dust clears. They never assume title on a coin and are simmply acting legally as an agent for a fee.

As for offering investment advice, be careful especially if you are in that industry or have a position in the Escala group as an investor.

seemyauction · October 8, 2006 1:36AM

At this point we do not know what Escala is being accused of. The tern "The Raids" should scare the poop out of you.

To quote the article

"The raids impaired Escala's ability to file its annual report on time, though the company announced yesterday that it would be taking huge writedowns in receivables, inventories, and goodwill related to Afinsa, as it is severing all business ties with the company. Afinsa, however, still owns nearly 70% of Escala's stock. In total, Escala says it will take charges of $41.9 million. Of that amount, $2.6 million would be for severance payments, $11.2 million would go toward receivables from Afinsa, $12.5 million for impairing goodwill and intangible assets, and $15.6 million to write down inventories."

If somehow it turns out that they sold items that were stolen or violated a contract.....the government can and most likely will seize the stolen or improperly sold merchandise.....Why take the chance....get rid of the merchandise.

seemyauction · October 8, 2006 1:44AM

Here is a Link to the State of Maryland liqudating items seized....

Coxe · October 8, 2006 1:56AM

<< If somehow it turns out that they sold items that were stolen or violated a contract.....the government can and most likely will seize the stolen or improperly sold merchandise.....Why take the chance....get rid of the merchandise. >>

Teletrade, B&M, ... Generally do not operate in a way that is used to fence stolen coins. The paper trail is there. Thieves will go to eBay or sell directly to dealers on a bourse or in a shop. Contract violations with their consignors would be relevant but unlikely. As much as people gripe about how TT sells stuff, it is not improper in the legal sense. All of the things to bring up are irrelevantin this case and would apply to ALL sources of coins to the same degree. Are you saying every coin, as a potential hot potato, should be liquidated immediately? That is nonsense. The risk of buying stolen property is everywhere, though minimal.

7Jaguars · October 8, 2006 2:03AM

HELLO, this is NOT Nazi Germany. It is a semi-public forum and each can express their right of freedom of speech - I am not a player in this but these comments are completely out of line. If I was in it I would tell you to "Bring it"!

I can not believe you would go there with threats. These are coins we are talking about, time to get a grip.

Coxe · October 8, 2006 2:10AM

Everyone is entitled to an opinion. But when allegations are brought that can present material damages to an innocent party, that is a problem. It is hard enough to make a dime selling coins. I sure don't need some guy scaring folks away from mine thinking they are more likely receiving tainted goods than anywhere else. Facts are facts. Speculation is ok when it is presented as such. I sell legitimately purchased goods.

7Jaguars · October 8, 2006 2:33AM

Then no worries and put your best foot forward. I seriously doubt that one person's opinions will significantly affect the buy prices in a Teletrade auction.

To me people say things all the time & I believe was taught to believe 10% of what you hear and only 50% of what you see.

I know I work in a field where people make all kinds of gestures and threats but bottom line just stick to my guns and present my service/product - worked so far.

Coxe · October 8, 2006 2:39AM

For the record, I am not suing anyone. People, especially someone engaged in competing auctions, need to be careful in sounding alarms to send people to the exits. There are serious issues for Escala and I am sure they are sweating them big time. But coins purchased from TT and B&M run no more of a risk that anyone has identified than from anywhere else. A consignment to any house could turn out to have been stolen. That is a general, not specific, risk. You generally sign a contract that afirms you have full legal title to the coins to limit things as best possible.

I took enough of a beating with buyback fees on my first consignment to TT. Don't need things harder on my second (and possibly last) one there.

tradedollarnut · October 8, 2006 3:00AM

<< 

<< If you own shares dump them....take the loss if you have too..right it off as a loss on your taxes.

If you bought anything from them get rid of it before the government takes over your collection....sell it, give it away...what ever you do don't get caught standing without a chair when the music stops.....and most important play bumb "I did not know anything about it." and stick to your statement at all costs.....

I can guarantee you NOTHING GOOD is going to come from this..... >>

What is your basis for telling folks the government would have any lefitimate interest in coins purchased through them? A judgment in the matter, when if comes to assets, would be limited to their wholly owned assets. The government and other parties have no interesting in such purchased coins unless they were stolen property, which is not the matter here. Consigned coins on their premises could get held in suspense in a raid, which is not a likely occurrance in this kind of thing, until the dust clears. They never assume title on a coin and are simmply acting legally as an agent for a fee.
>>

You would think so, yet just last Long Beach millions of dollars worth of gold bars owned by an independent third party were seized by US government agents.

Coxe · October 8, 2006 3:04AM

TDN -- Yes, but that is the risk from any coin source and not specific to the case here. Did anyone read where Escala (TT or B&M) are involved in anything where that risk would be presented as higher? I didn't.

Coxe · October 8, 2006 3:53AM

Yes, the folks at those firms are very nice, especially Irma.

I feel sorry for them being associated with the Spanish fiasco and don't know what their level of involvement in the Ohio case is. The original Teletrade is largely responsible, however, with the success and efficiency of internet auctions. They were conducting sight-unseen sales over the telephone and on the internet when it blossomed while all the big guys were twiddling their thumbs nay-saying them. But their reliability was noticed and lent significant credibility, enough that the others slowly warmed up to it too. Their cataloguer, IMO, was excellent in the old days, but they have images now. (Oh and I found out they do not scan the coins but photograph each one, perhaps not asw ell as many would like though.) Today, again IMO, Heritage and Teletrade are the reference standards for internet coin auctions. eBay is too crazy to compare.

tradedollarnut · October 8, 2006 6:07AM

What happens to the coin you just bought if the auction house fails to pay the consignor?

[I am NOT inferring this could be the case with ANY current auction house - I just don't know the answer to the question]

Coxe · October 8, 2006 6:55AM

According to the TT agreement, section 1, you authorized TT as your agent to transfer the title. So I think that the buyer has legal title and the consignor's claim would be with TT (in this hypothetical example). Would be a sticky situation but, thankfully, is highly unlikely. Same as if the auction company went bankrupt before paying the consignors. They would have no claims on the sold coins but would on the proceeds through the bankruptcy. Any lawyers think I am wrong on this? Seems logical.

UncleWiggly · October 8, 2006 7:05AM

<< If you own shares dump them....take the loss if you have too..right it off as a loss on your taxes.

If you bought anything from them get rid of it before the government takes over your collection....sell it, give it away...what ever you do don't get caught standing without a chair when the music stops.....and most important play bumb "I did not know anything about it." and stick to your statement at all costs.....

I can guarantee you NOTHING GOOD is going to come from this..... >>

Reading this thread and the links........"play dumb" really can't hold true.

Jerry

UncleWiggly · October 8, 2006 7:30AM

<< Parent of Teletrade, Bowers & Merena, Spectrum Numismatics, A-Mark Precious Metals,

is delinquent in its regulatory filings.

Link >>

Also, "David Hall Rare Coins is now North American Certified Trading " NACT is part of the Escala Group. I believe this is Mr. Hall's old coin company and not the new one. I've been looking at what I quoted for at least 3 years and is still up.

Jerry

tradedollarnut · October 8, 2006 8:09AM

According to the TT agreement, section 1, you authorized TT as your agent to transfer the title. So I think that the buyer has legal title and the consignor's claim would be with TT (in this hypothetical example). Would be a sticky situation but, thankfully, is highly unlikely. Same as if the auction company went bankrupt before paying the consignors. They would have no claims on the sold coins but would on the proceeds through the bankruptcy. Any lawyers think I am wrong on this? Seems logical.

I suspect you might be right. If an auction company were to go bankrupt before paying its consignors, it would be one hell of a mess.

elwood · October 8, 2006 8:29AM

<< There are NO known facts hat they comitted any crimes (unless I don't know something). >>

Unless........

<< While there is yet no proof that Escala was definitively involved, it does seem that investigators are leaning in that direction. Spanish tax authorities believe that certain stock trading transactions by both Escala founder Greg Manning (Escala was previously known as Greg Manning Auctions) and director Gregory Roberts are worthy of further investigation. >>

<< Roberts is also president of Spectrum Numismatics and A-Mark Precious Metals, a company Escala acquired last year. Spectrum has been at the center of a coin trading scandal with Ohio's Bureau of Worker's Compensation. Coin dealer Thomas Noe has been indicted for allegedly mismanaging $50 million in state funds he received for coin investments, transactions which were handled by Spectrum. He also loaned Greg Manning Auctions $6.5 million, using state funds to set up Spectrum while also investing more than $10 million in Bureau funds in the company. In an off-market purchase, Noe bought 500,000 shares of Greg Manning Auctions at a 36% discount, after which Afinsa made its takeover bid for the company. Noe then sold his shares for a $3 million profit. >>

<< Afinsa's former president denies that Manning or Roberts ever manipulated the stock for their own benefit, but Spanish authorities seem to think that the transactions of the two say otherwise and "deserve[s] a special attention" by investigators. >>

....there's more to this story???

wondercoin · October 8, 2006 8:31AM

"I suspect you might be right. If an auction company were to go bankrupt before paying its consignors, it would be one hell of a mess."

I believe we've already seen how that would go down when a major filed for BK a decade or two before.

Wondercoin

Coxe · October 8, 2006 8:48AM

elwood -- It looks like some of the folks personally might have troubles per trading the stock and in the Ohio scandal. However, I have not seen anything that would even remotely suggest that coins purchased by buyers through the Escala subsidiaries here have shaky titles as if they were stolen or sold to separate buyers. Greg Roberts' problems, if he has any, are his own and do not translate to the customers'. Am I wrong here?

Russ · October 8, 2006 8:52AM

<< At this point we do not know what Escala is being accused of. The tern "The Raids" should scare the poop out of you. >>

I think you're right. I just looked out my window and there is a black helicopter hovering above my building and a guy with binoculars wearing a hat that says "Coin Police" is staring at me.

Russ, NCNE

Cameonut · October 8, 2006 10:06AM

Unless you have a strong stomach, I would not consign to any division of Escala.

I understand that some of their divisons have fine and reputable people working for them.

But if the firm goes bankrupt, your assets will be frozen and you will get in line with other creditors to attempt to get your assets back. The sad thing is the fine employees will be powerless to help. Better to sit on the sidelines.

I know that bankruprty has not been mentioned, but if it is a real risk, you had better beware.

I am glad I saw this thread, I will not be placing any bids on any TT auctions any time soon. (Not that they have that much to offer.) They lost my consignments a couple of years ago, now they have lost my bids.

elwood · October 8, 2006 10:43AM

<< Greg Roberts' problems, if he has any, are his own and do not translate to the customers'. Am I wrong here? >>

I'm not a securities expert but it looks like a few of these people are not going to have a very fun year ahead of them.

Insider trading is a different issue compared to the Spain/Stamp problem.

Maybe Wondercoin can enlighten us as to what happened when this other auction company went bankrupt?

I will be bidding in an upcoming auction from one of their divisions and this news is now somewhat of a concern to me. I talked to some of their reps (not about escala's problems) about the auction yesterday and they seemed to be very, very nice people to deal with. Much more relaxed and informative then the B & M employees.

MrEureka · October 8, 2006 10:49AM

I don't see any risk of a near-term bankruptcy so I wouldn't hesitate to do business with the Escala firms. However, if Escala is implicated in the Afinsa frauds, there will certainly be some longer term risks.

Coxe · October 8, 2006 10:50AM

<< But if the firm goes bankrupt, your assets will be frozen and you will get in line with other creditors to attempt to get your assets back. The sad thing is the fine employees will be powerless to help. Better to sit on the sidelines. >>

Nonsense. Teletrade does not hold title to the consignors' coins. They might not come back right away whiel they sort things out, but at no time does a creditor have any interest whatsoever in an asset that is not the property of the company. Now, if you bought a coin from an Escala subsidiary's direct inventory that goes bankrupt before they deliver it, you are one of the creditors.

tradedollarnut · October 8, 2006 1:15PM

<< 

<< But if the firm goes bankrupt, your assets will be frozen and you will get in line with other creditors to attempt to get your assets back. The sad thing is the fine employees will be powerless to help. Better to sit on the sidelines. >>

Nonsense. Teletrade does not hold title to the consignors' coins. They might not come back right away whiel they sort things out, but at no time does a creditor have any interest whatsoever in an asset that is not the property of the company. Now, if you bought a coin from an Escala subsidiary's direct inventory that goes bankrupt before they deliver it, you are one of the creditors. >>

If the coin is sold and the money collected, but not yet paid out to the consignor - what then? Has title transferred to the buyer and the consignor is a creditor of the auction company?

Coxe · October 8, 2006 1:22PM

<< If the coin is sold and the money collected, but not yet paid out to the consignor - what then? Has title transferred to the buyer and the consignor is a creditor of the auction company?

>>

That should be the case.

Frankcoins · October 8, 2006 2:20PM

<< A latino looking character asked me for some spare coins the other day, I wonder if it was the Spainsh secret police

--BigE >>

Unlikely. People from Spain are not Latinos.

Escala receives delisting notice

Comments

Leave a Comment