Not to beat a dead horse, but back to Julian's double bid...
Don't forget, if the coin sold for less than the underbid, the consignor would have been screwed out of money that would otherwise be rightly his.
If I was not representing the consignor, I would not care. That is not to say that I will try to arrange collusion between my two clients. However, if I can talk them into bidding on different lots so that they can both have a chance to walk away happy, and so I can have a chance to make two commissions, what do you think I'm going to do?
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>I'd like to see someone tell one of two good customers-no over an auction commision. >>
So would I. That would eliminate any possibility of an issue arising. >>
What issue are attempting to prevent by turning away another bidder? >>
Conflict of interest. >>
Bidder's A interest is to win the auction. Bidder B's interest is to win the auction. Given that 2 bidders have emerged, competition will be guaranteed. Dealer 1's interest is to represent his/her clients best bid(s) at an auction.
If A & B work with dealer 1, how is that different than A working with dealer 1 and B working with dealer 2? The best bid will win either way.
I think you are confusing competiiton with a conflict of interest. >>
When one individual is in control of the confidential actions of two or more direct competitors there is a conflict of interest on the part of that one individual, in my opinion. There is no way, other than trust, to determine if that one individual is conducting operations in an ethical manner.
I'm simply saying that, in my opinion, since such a situation offers no concrete transparency there will always be the possibility of unethical practices. That simple possibility could be easily eliminated by only representing one client per lot. >>
Fair enough. But if you don't trust the dealer in the 1st place, then maybe you should not place any bids through them.
<< <i>I'd like to see someone tell one of two good customers-no over an auction commision. >>
So would I. That would eliminate any possibility of an issue arising. >>
What issue are attempting to prevent by turning away another bidder? >>
Conflict of interest. >>
Bidder's A interest is to win the auction. Bidder B's interest is to win the auction. Given that 2 bidders have emerged, competition will be guaranteed. Dealer 1's interest is to represent his/her clients best bid(s) at an auction.
If A & B work with dealer 1, how is that different than A working with dealer 1 and B working with dealer 2? The best bid will win either way.
I think you are confusing competiiton with a conflict of interest. >>
When one individual is in control of the confidential actions of two or more direct competitors there is a conflict of interest on the part of that one individual, in my opinion. There is no way, other than trust, to determine if that one individual is conducting operations in an ethical manner.
I'm simply saying that, in my opinion, since such a situation offers no concrete transparency there will always be the possibility of unethical practices. That simple possibility could be easily eliminated by only representing one client per lot. >>
Fair enough. But if you don't trust the dealer in the 1st place, then maybe you should not place any bids through them. >>
The dealer should not put him/herself in the position of being open to speculation in the first place. If a dealer represents only one client per lot then the possibility of this ever coming up as an issue is zero. I see it as a way the dealer can protect themselves.
If a dealer is honest with his clients about the situation and his clients are satisfied enough to accept his assurances regarding his performance, I don't think it's anybody else's business what they agree to.
<< <i>If a dealer is honest with his clients about the situation and his clients are satisfied enough to accept his assurances regarding his performance, I don't think it's anybody else's business what they agree to. >>
It's not a matter of who's business it is or not. It's simply a conversation about different methods of conducting business. I think everyone has the right to do that.
<< <i>This happened a long time ago (not at a major auction house).
Dealer X, who conducted the auction, was representing buyer W (that's "W" for "whale") on a number of lots.
A certain lot came up, and the dealer said, "I'm not taking any bids because no one will outbid W on this".
He then proceeded to close the lot to Mr. W at a price LOWER than I would have paid. I protested and he went on to the next lot anyway. >>
That is not right. Buyer W may have been wiling to pay whatever for that coin but all bids must be submitted before his (buyer W's) final purchase price is determined.
The seller and Coinosaurus got hosed in this example. >>
Coinosaurus, I hope you found out who the consignor was and informed him that the auctioneer screwed him royally!
An authorized PCGS dealer, and a contributor to the Red Book.
No matter what the intentions, if an individual attempts to represent two competing parties, it is a conflict of interest - period. If that is not clear, I strongly suggest Ethics 101. Cheers, RickO
<< <i>It's simply a conversation about different methods of conducting business. I think everyone has the right to do that. >>
Sure- that's fair enough. I just think it's unfortunate that, absent evidence of any wrongdoing, anyone's ethics would be questioned because of a difference of opinion regarding those business methods.
<< <i>It's simply a conversation about different methods of conducting business. I think everyone has the right to do that. >>
Sure- that's fair enough. I just think it's unfortunate that, absent evidence of any wrongdoing, anyone's ethics would be questioned because of a difference of opinion regarding those business methods. >>
The practice of one person (any person) representing two seperate clients competing for the same item automatically lends itself to question.
<< <i>No matter what the intentions, if an individual attempts to represent two competing parties, it is a conflict of interest - period. If that is not clear, I strongly suggest Ethics 101. Cheers, RickO >>
Better check out Ethics 101 yourself. A conflict of interest only exists if an agent is unable to represent one party to the best of his ability based on his representation of the other. In the described situation the dealer was able to fully represent both parties...ie, fully execute both maximum bids. A conflict would only have occurred if he used information from one party to enable the other party to place a higher proxy.
Edited to add: Turning down the second client would have avoided any appearance of conflict, though.
Just because I'm old doesn't mean I don't love to look at a pretty bust.
<< <i>No matter what the intentions, if an individual attempts to represent two competing parties, it is a conflict of interest - period. If that is not clear, I strongly suggest Ethics 101. Cheers, RickO >>
I am willing to be persuaded. Regarding this situation:
I was the dealer representing two very good clients, Rudy and Harry.
I wanted to keep their represntation business in the future. Both would give me discretionary bids.
I explained my predicament to both gentlemen, asked them for exact bids and that I would faithfully execute them both.
The dealer has made an agreement to make a bid for each of two individuals on the same item. As long as he executes the bids as he has agreed to with each bidder, where is the conflict? The terms of the agreement are out in the open (each bidder knows about the other and is responsible for determining his own max bid) and all parties have consented to the arrangement.
The only conflict is that each of the bidders wants to buy the item, but that's a conflict they have with each other, not the dealer.
<< <i>A conflict would only have occurred if he used information from one party to enable the other party to place a higher proxy. >>
How is Generic Bidder A supposed to know, positively, that Generic Dealer A1 (who is bidding on his behalf) is not using information from him to enable Generic Bidder B (who GDA1 is also bidding for) to gain an unfair advantage?
It's impossible for GBA to know with certainty and it's impossible for GBB to know with certainty either. The situation is sticky and gray and all parties would be best served by GDA1 just avoiding the situation all together and only represent one of the bidders.
<< <i>As long as he executes the bids as he has agreed to with each bidder, where is the conflict? >>
Exactly! Who is to say that the bids are executed as agreed upon? There is absolutely no way for the bidders to know for sure. It's best avoided by acting on behalf of only one bidder per lot.
It is also impossible for GBA to "know" that GDA1 is not using info received from him to allow his buddy GDA2 an unfair advantage. A modicum of trust has to enter into the equation somewhere.
Just because I'm old doesn't mean I don't love to look at a pretty bust.
<< <i>How is Generic Bidder A supposed to know, positively, that Generic Dealer A1 (who is bidding on his behalf) is not using information from him to enable Generic Bidder B (who GDA1 is also bidding for) to gain an unfair advantage?
It's impossible for GBA to know with certainty and it's impossible for GBB to know with certainty either. The situation is sticky and gray and all parties would be best served by GDA1 just avoiding the situation all together and only represent one of the bidders. >>
And all parties should do as you suggest, if that's what they think and what they're worried about.
If, however, they all agree to the arrangement, where's the problem?
I've never been in the situation of wanting to have someone make a bid for me who is also bidding for someone else, but I do know people I would trust to act fairly should that situation arise. That I would do so is no indication that I think you should do likewise.
I bid and won a lot of Indian Peace Medals on an ebay live Auction with Butterfields in San francisco. My high bid was around $5000. I recieved verification by e-mail from eBay, Butterfields, as well as on the Java console interface for the Live Auctions.
I live near San Francisco, and actually physically went to Butterfields to view the auction lots. I chose to use the Live Auction interface to save a second drive to the City.
The week after the auction, I drove to San Francisco to pay for and pick up my lots. (I won one other lot). When I arrived there, they did not show me as the high bidder on the Peace Medal lot. I had their verification, but they had already sold and given the lot to a floor bidder on the day of the auction. I was really upset, but short of suing them, there was nothing I could do.
I knew someone who had attended the auction live, and he told me that the people at the auction had coached one unknowledgeable bidder/collector of substantial means before the auction, telling him that the medal lots (deacessed by the San Francisco Museum of Fine Arts) were underestimated and valuable. This was true, and a couple of buyers knew this. The medals were sold in large lots, unpictured on ebay, and without a list of the contents of the lots. So this bidder just bid like crazy, winning almost all of the lots, at nearly retail, or higher, and at 20 or 30 times the estimates (which were ridiculously low) I was told that the bidder was literally looking at one of the employees in the room, who was guiding him when to bid.
The impression that my friend had waas that this bidder was likely a huge customer at butterfields, the kind who bids hundreds of thousands on art, maybe millions in a year. Sort of like the casinos that have special loose slot machines they only allow high rollers to play, the auction house clues these special customers in when they know things have been miscatalogued.
A typical example was a box of Assay Commission medals had an estimate of $200-300. I was the underbidder to this guy, and the lot sold for $8,500. If Butterfields didn't bring him in, I would have got the lot for a few hundred dollars.
So on the Peace Medal lot, this is what happened, according to the person who was there live. The bidder stopped bidding, and the lot sold to the book (me as an internet bidder). Tha auction stopped, literally. The auctioneer and a few people had a meeting with the bidder, and then the auction proceeded. Obviously they let him have the lot, and at MY high bid. In the meantime, I had already won the lot electronically, and was notified of this by e-mail.
The only reason they got away with this was that these lots were at the end of the auction, there was jewelry and art in the earlier lots, and after those were auctioned off, almost everyone had left. The small number of folks who remained may have put them at ease to do this to me. Of course, I other than Butterfields, and the underbidder, and me, no one knew what they did, but I suspect they let him have other lots which were won on eBay. Fortunately, I did get my one lot, but those peace medals were incredible, it included a 4" copper jefferson restrike, a huge rarity. This was about 5 years ago, mayber longer. Butterfields has since sold. Today those medals would be worth about $20,000.
<< <i>If, however, they all agree to the arrangement, where's the problem? >>
So you want the dealer to get all the bidders he is representing on the same lot together and see if they agree to it? Not likely.
<< <i>I've never been in the situation of wanting to have someone make a bid for me who is also bidding for someone else >>
How would you know if you have or haven't? I highly doubt any dealer doing this would voluntarily tell you that he just happens to be representing another bidder on the same lots you want to bid on.
<< <i>So you want the dealer to get all the bidders he is representing on the same lot together and see if they agree to it? Not likely. >>
As long as the representative tells the bidders what's going on, there's no need to get everybody together.
<< <i>How would you know if you have or haven't? >>
That one's easy- I've never had somebody else bid for me.
<< <i>I highly doubt any dealer doing this would voluntarily tell you that he just happens to be representing another bidder on the same lots you want to bid on. >>
You're certainly welcome to your doubts, but as I said, there are people I would trust to do so. As long as I'm satisfied that's the case, where's the problem?
Expanding on your earlier scenario...
<< <i>How is Generic Bidder A supposed to know, positively, that Generic Dealer A1 (who is bidding on his behalf) is not using information from him to enable Generic Bidder B (who GDA1 is also bidding for) to gain an unfair advantage? >>
Suppose Generic Dealer A1 is only bidding for Generic Bidder A, and Generic Bidder B is not in the picture. How is Generic Bidder A supposed to know, positively, that Generic Dealer A1 is not using information from him to enable someone else to gain an unfair advantage?
Seems to me, somewhere along the line you have to trust somebody to do the right thing.
It sounds like this boils down to an issue of trust. If there was a dealer that you unquestionably trust to keep all information about your interest in an item confidenential there is no reason not to use them as your agent to bid in an auction. Even if they bid for other collectors on the same item. This could be a valuable service so such an honest dealer would be well-rewarded.
Legend and other dealers often talk about this service that they offer. So far I've been too queasy about letting ANYONE know what items I intend to bid on, but I think this could change with time.
<< <i>It sounds like this boils down to an issue of trust. >>
That's about it- it's just as easy to mistrust someone bidding for one person as for several. Everybody has to make their own decisions about who to trust.
Comments
Don't forget, if the coin sold for less than the underbid, the consignor would have been screwed out of money that would otherwise be rightly his.
If I was not representing the consignor, I would not care. That is not to say that I will try to arrange collusion between my two clients. However, if I can talk them into bidding on different lots so that they can both have a chance to walk away happy, and so I can have a chance to make two commissions, what do you think I'm going to do?
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
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<< <i>I'd like to see someone tell one of two good customers-no over an auction commision. >>
So would I. That would eliminate any possibility of an issue arising. >>
What issue are attempting to prevent by turning away another bidder? >>
Conflict of interest. >>
Bidder's A interest is to win the auction. Bidder B's interest is to win the auction. Given that 2 bidders have emerged, competition will be guaranteed.
Dealer 1's interest is to represent his/her clients best bid(s) at an auction.
If A & B work with dealer 1, how is that different than A working with dealer 1 and B working with dealer 2? The best bid will win either way.
I think you are confusing competiiton with a conflict of interest. >>
When one individual is in control of the confidential actions of two or more direct competitors there is a conflict of interest on the part of that one individual, in my opinion. There is no way, other than trust, to determine if that one individual is conducting operations in an ethical manner.
I'm simply saying that, in my opinion, since such a situation offers no concrete transparency there will always be the possibility of unethical practices. That simple possibility could be easily eliminated by only representing one client per lot. >>
Fair enough. But if you don't trust the dealer in the 1st place, then maybe you should not place any bids through them.
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<< <i>I'd like to see someone tell one of two good customers-no over an auction commision. >>
So would I. That would eliminate any possibility of an issue arising. >>
What issue are attempting to prevent by turning away another bidder? >>
Conflict of interest. >>
Bidder's A interest is to win the auction. Bidder B's interest is to win the auction. Given that 2 bidders have emerged, competition will be guaranteed.
Dealer 1's interest is to represent his/her clients best bid(s) at an auction.
If A & B work with dealer 1, how is that different than A working with dealer 1 and B working with dealer 2? The best bid will win either way.
I think you are confusing competiiton with a conflict of interest. >>
When one individual is in control of the confidential actions of two or more direct competitors there is a conflict of interest on the part of that one individual, in my opinion. There is no way, other than trust, to determine if that one individual is conducting operations in an ethical manner.
I'm simply saying that, in my opinion, since such a situation offers no concrete transparency there will always be the possibility of unethical practices. That simple possibility could be easily eliminated by only representing one client per lot. >>
Fair enough. But if you don't trust the dealer in the 1st place, then maybe you should not place any bids through them. >>
The dealer should not put him/herself in the position of being open to speculation in the first place. If a dealer represents only one client per lot then the possibility of this ever coming up as an issue is zero. I see it as a way the dealer can protect themselves.
<< <i>If a dealer is honest with his clients about the situation and his clients are satisfied enough to accept his assurances regarding his performance, I don't think it's anybody else's business what they agree to. >>
It's not a matter of who's business it is or not. It's simply a conversation about different methods of conducting business. I think everyone has the right to do that.
<< <i>
<< <i>This happened a long time ago (not at a major auction house).
Dealer X, who conducted the auction, was representing buyer W (that's "W" for "whale") on a number of lots.
A certain lot came up, and the dealer said, "I'm not taking any bids because no one will outbid W on this".
He then proceeded to close the lot to Mr. W at a price LOWER than I would have paid. I protested and he went on to the next lot anyway. >>
That is not right. Buyer W may have been wiling to pay whatever for that coin but all bids must be submitted before his (buyer W's) final purchase price is determined.
The seller and Coinosaurus got hosed in this example. >>
Coinosaurus, I hope you found out who the consignor was and informed him that the auctioneer screwed him royally!
An authorized PCGS dealer, and a contributor to the Red Book.
<< <i>It's simply a conversation about different methods of conducting business. I think everyone has the right to do that. >>
Sure- that's fair enough. I just think it's unfortunate that, absent evidence of any wrongdoing, anyone's ethics would be questioned because of a difference of opinion regarding those business methods.
<< <i>
<< <i>It's simply a conversation about different methods of conducting business. I think everyone has the right to do that. >>
Sure- that's fair enough. I just think it's unfortunate that, absent evidence of any wrongdoing, anyone's ethics would be questioned because of a difference of opinion regarding those business methods. >>
The practice of one person (any person) representing two seperate clients competing for the same item automatically lends itself to question.
<< <i>No matter what the intentions, if an individual attempts to represent two competing parties, it is a conflict of interest - period. If that is not clear, I strongly suggest Ethics 101. Cheers, RickO >>
Better check out Ethics 101 yourself. A conflict of interest only exists if an agent is unable to represent one party to the best of his ability based on his representation of the other. In the described situation the dealer was able to fully represent both parties...ie, fully execute both maximum bids. A conflict would only have occurred if he used information from one party to enable the other party to place a higher proxy.
Edited to add: Turning down the second client would have avoided any appearance of conflict, though.
<< <i>No matter what the intentions, if an individual attempts to represent two competing parties, it is a conflict of interest - period. If that is not clear, I strongly suggest Ethics 101. Cheers, RickO >>
I am willing to be persuaded. Regarding this situation:
I was the dealer representing two very good clients, Rudy and Harry.
I wanted to keep their represntation business in the future. Both would give me discretionary bids.
I explained my predicament to both gentlemen, asked them for exact bids and that I would faithfully execute them both.
The dealer has made an agreement to make a bid for each of two individuals on the same item. As long as he executes the bids as he has agreed to with each bidder, where is the conflict? The terms of the agreement are out in the open (each bidder knows about the other and is responsible for determining his own max bid) and all parties have consented to the arrangement.
The only conflict is that each of the bidders wants to buy the item, but that's a conflict they have with each other, not the dealer.
<< <i>A conflict would only have occurred if he used information from one party to enable the other party to place a higher proxy. >>
How is Generic Bidder A supposed to know, positively, that Generic Dealer A1 (who is bidding on his behalf) is not using information from him to enable Generic Bidder B (who GDA1 is also bidding for) to gain an unfair advantage?
It's impossible for GBA to know with certainty and it's impossible for GBB to know with certainty either. The situation is sticky and gray and all parties would be best served by GDA1 just avoiding the situation all together and only represent one of the bidders.
<< <i>As long as he executes the bids as he has agreed to with each bidder, where is the conflict? >>
Exactly! Who is to say that the bids are executed as agreed upon? There is absolutely no way for the bidders to know for sure. It's best avoided by acting on behalf of only one bidder per lot.
<< <i>How is Generic Bidder A supposed to know, positively, that Generic Dealer A1 (who is bidding on his behalf) is not using information from him to enable Generic Bidder B (who GDA1 is also bidding for) to gain an unfair advantage?
It's impossible for GBA to know with certainty and it's impossible for GBB to know with certainty either. The situation is sticky and gray and all parties would be best served by GDA1 just avoiding the situation all together and only represent one of the bidders. >>
And all parties should do as you suggest, if that's what they think and what they're worried about.
If, however, they all agree to the arrangement, where's the problem?
I've never been in the situation of wanting to have someone make a bid for me who is also bidding for someone else, but I do know people I would trust to act fairly should that situation arise. That I would do so is no indication that I think you should do likewise.
I live near San Francisco, and actually physically went to Butterfields to view the auction lots. I chose to use the Live Auction interface to save a second drive to the City.
The week after the auction, I drove to San Francisco to pay for and pick up my lots. (I won one other lot). When I arrived there, they did not show me as the high bidder on the Peace Medal lot. I had their verification, but they had already sold and given the lot to a floor bidder on the day of the auction. I was really upset, but short of suing them, there was nothing I could do.
I knew someone who had attended the auction live, and he told me that the people at the auction had coached one unknowledgeable bidder/collector of substantial means before the auction, telling him that the medal lots (deacessed by the San Francisco Museum of Fine Arts) were underestimated and valuable. This was true, and a couple of buyers knew this. The medals were sold in large lots, unpictured on ebay, and without a list of the contents of the lots. So this bidder just bid like crazy, winning almost all of the lots, at nearly retail, or higher, and at 20 or 30 times the estimates (which were ridiculously low) I was told that the bidder was literally looking at one of the employees in the room, who was guiding him when to bid.
The impression that my friend had waas that this bidder was likely a huge customer at butterfields, the kind who bids hundreds of thousands on art, maybe millions in a year. Sort of like the casinos that have special loose slot machines they only allow high rollers to play, the auction house clues these special customers in when they know things have been miscatalogued.
A typical example was a box of Assay Commission medals had an estimate of $200-300. I was the underbidder to this guy, and the lot sold for $8,500. If Butterfields didn't bring him in, I would have got the lot for a few hundred dollars.
So on the Peace Medal lot, this is what happened, according to the person who was there live. The bidder stopped bidding, and the lot sold to the book (me as an internet bidder). Tha auction stopped, literally. The auctioneer and a few people had a meeting with the bidder, and then the auction proceeded. Obviously they let him have the lot, and at MY high bid. In the meantime, I had already won the lot electronically, and was notified of this by e-mail.
The only reason they got away with this was that these lots were at the end of the auction, there was jewelry and art in the earlier lots, and after those were auctioned off, almost everyone had left. The small number of folks who remained may have put them at ease to do this to me. Of course, I other than Butterfields, and the underbidder, and me, no one knew what they did, but I suspect they let him have other lots which were won on eBay. Fortunately, I did get my one lot, but those peace medals were incredible, it included a 4" copper jefferson restrike, a huge rarity. This was about 5 years ago, mayber longer. Butterfields has since sold. Today those medals would be worth about $20,000.
<< <i>If, however, they all agree to the arrangement, where's the problem? >>
So you want the dealer to get all the bidders he is representing on the same lot together and see if they agree to it? Not likely.
<< <i>I've never been in the situation of wanting to have someone make a bid for me who is also bidding for someone else >>
How would you know if you have or haven't? I highly doubt any dealer doing this would voluntarily tell you that he just happens to be representing another bidder on the same lots you want to bid on.
<< <i>So you want the dealer to get all the bidders he is representing on the same lot together and see if they agree to it? Not likely. >>
As long as the representative tells the bidders what's going on, there's no need to get everybody together.
<< <i>How would you know if you have or haven't? >>
That one's easy- I've never had somebody else bid for me.
<< <i>I highly doubt any dealer doing this would voluntarily tell you that he just happens to be representing another bidder on the same lots you want to bid on. >>
You're certainly welcome to your doubts, but as I said, there are people I would trust to do so. As long as I'm satisfied that's the case, where's the problem?
Expanding on your earlier scenario...
<< <i>How is Generic Bidder A supposed to know, positively, that Generic Dealer A1 (who is bidding on his behalf) is not using information from him to enable Generic Bidder B (who GDA1 is also bidding for) to gain an unfair advantage? >>
Suppose Generic Dealer A1 is only bidding for Generic Bidder A, and Generic Bidder B is not in the picture. How is Generic Bidder A supposed to know, positively, that Generic Dealer A1 is not using information from him to enable someone else to gain an unfair advantage?
Seems to me, somewhere along the line you have to trust somebody to do the right thing.
<< <i>You're so eager to trust the dealers carte blanche, have fun with that.
I don't believe I said that at all.
<< <i>
<< <i>You're so eager to trust the dealers carte blanche, have fun with that.
I don't believe I said that at all. >>
Ok but I'm done talking to the wall.
Legend and other dealers often talk about this service that they offer. So far I've been too queasy about letting ANYONE know what items I intend to bid on, but I think this could change with time.
Who is John Galt?
<< <i>It sounds like this boils down to an issue of trust. >>
That's about it- it's just as easy to mistrust someone bidding for one person as for several. Everybody has to make their own decisions about who to trust.
Mad Marty