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Sales, Swaps, Auction & Approvals/Auction Disc. : Is this permitted in the auction?

 

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Staantoo

29 May 2014
09:23:31am
Sometimes I am bidding against another member on several different lots and we are the only two bidders. I would like to contact the other bidder and try to negotiate an agreement to split the lots so we can stop bidding all the prices up on each other. Is this permitted under the rules since it could be seen as unfair to the seller?
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smauggie
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29 May 2014
09:42:56am
re: Is this permitted in the auction?

I don't know that it would be unfair to the seller, as he/she still makes a sale. There is no specific mention of buyer "collusion" in the auction rules. Winking

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amsd
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Editor, Seal News; contributor, JuicyHeads

29 May 2014
11:24:42am
re: Is this permitted in the auction?

it is not permitted Stan, precisely for the reason Antonio cited.

thank you for asking

David the auctioneer

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BobbyBarnhart
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29 May 2014
11:54:00am
re: Is this permitted in the auction?

"I don't know that it would be unfair to the seller, as he/she still makes a sale. There is no specific mention of buyer "collusion" in the auction rules."

It would most definitely be unfair to the Seller. Buyer "collusion" is as harmful as shill bidding, albeit to the Seller while shilling harms the Buyers. Regardless of a mention in the rules, "Buyer collusion" is a form of fraud and fraud is always a "no no."

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roy
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29 May 2014
12:13:59pm
re: Is this permitted in the auction?

In the long run, such behaviour is detrimental to the quality of the auction.

A number of years ago, I sold a great many good covers via auction (not Stamporama) to a small group of specialist collectors who knew each other. Initially, there was good competition, and I was a happy seller. I scoured the market and worked hard and paid good money to find interesting material for them, and was rewarded for the effort.

After a while, it became clear that they were doing exactly what Stantoo was suggesting. Competitive bidding dropped off, the "group" never seemed to bid against each other, the covers went (usually) evenly split, and the only advance I got were when an "outsider" (typically a specialist dealer) went up against them. I was no longer rewarded for doing the leg-work.

My response? I dropped that specialty. I no longer look for covers for them and a good and regular source of supply for them dried up.

Roy

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smauggie
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29 May 2014
12:49:43pm
re: Is this permitted in the auction?

I knew playing the devil's advocate would bring out the lawyer in Bobby.Big Grin

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BobbyBarnhart
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They who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety. -Benjamin Franklin

29 May 2014
01:46:49pm
re: Is this permitted in the auction?

Antonio, have you ever looked up the meaning of "sneaky?"Big Grin

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smauggie
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29 May 2014
02:02:46pm
re: Is this permitted in the auction?

Never needed to Bobby. There were always real-life examples close to hand. Winking

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cdj1122
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Silence in the face of adversity is the father of complicity and collusion, the first cousins of conspiracy..

09 Jun 2014
03:59:32pm
re: Is this permitted in the auction?

Long term collectors will recall that about twenty years ago several well known Dealers decided to create a buyer's combine designed to limit bids on large lots and they would meet afterward to divy up the purchases among themselves. Eventually they were exposed and charged with criminal fraud. I believe that they all paid substantial fines.
Interestingly, several still advertise their years of experience and honesty.
As Bobby and David pointed out; ....... "Buyer collusion" is a form of fraud .......

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amsd
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Editor, Seal News; contributor, JuicyHeads

10 Jun 2014
08:30:04am
re: Is this permitted in the auction?

well said, Charlie.

all were also expelled from APS, if they were then members, which points to great integrity on APS's part.


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d1stamper
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10 Jun 2014
09:49:05am

Auctions - Approvals
re: Is this permitted in the auction?

Did these companies or people ever rejoin the APS at later time or under another name?

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amsd
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Editor, Seal News; contributor, JuicyHeads

10 Jun 2014
11:19:44am
re: Is this permitted in the auction?

i don't know. I remember some of the names, but i have been an on/off APS member. Linn's covered it in great detail.

David

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DouglasGPerry
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APS Member #196859

10 Jun 2014
11:52:14am
re: Is this permitted in the auction?

Earl P.L. Apfelbaum, Inc., was one of the companies involved. Here is a good summary:
http://archive.today/1w1Z

Here is the official court document regarding their plea agreement of 2002:
http://www.justice.gov/atr/cases/f203200/203220.htm

Basically, they and several other companies colluded to rig bidding to keep down auction prices (for the stamps these companies were buying).

I should note that this rigging involved the SELLING of stamps TO Apfelbaum (through other auction houses), but did not involve the BUYING of stamps FROM Apfelbaum. Personally, I have been buying stamps from Apfelbaum for years, and remain a happy customer.

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michael78651
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Moderator, MT Member

10 Jun 2014
03:25:03pm
re: Is this permitted in the auction?

I do not believe that Earl P.L. Apfelbaum Inc belongs to any philatelic organizations. My recollection is that the APS expulsion was permanent. Apfelbaum also voluntarily resigned its membership in the ASDA. That, too, has not been reinstated.

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DouglasGPerry
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APS Member #196859

10 Jun 2014
04:10:30pm
re: Is this permitted in the auction?

That's my understanding, too. In fact, if I remember correctly, one of the Apfelbaums was on the ASDA Ethics Committee. Ironic!

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cdj1122
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Silence in the face of adversity is the father of complicity and collusion, the first cousins of conspiracy..

10 Jun 2014
11:38:01pm
re: Is this permitted in the auction?

Yes, it is a shame that what was a honored name in the business was and is still stained by that nefarious business. I also had dealt with the Apelbaum people who sold some gems I had found in the "70s. The staff were always polite and very helpful.
Now that my memory juices are gurgling away, I seem to recall Herman Hurst telling a similar tale of bid rigging that occurred before WW II when a group of dealers conspired at a then famous auction house in Brooklyn by single bids and later gathering behind closed doors to bid among themselves and distribute the profits quietly.
I do not recall the names or how they distributed their profits but it must have been similar, and I think that Herst was partly responsible for assisting the authorities in breaking up the illegal syndicate.


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michael78651
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Moderator, MT Member

11 Jun 2014
12:18:59pm
re: Is this permitted in the auction?

Charlie, was that the incident that the Stolow brothers reported, or was that something else?

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khj
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11 Jun 2014
03:50:48pm
re: Is this permitted in the auction?

It was Greg Stolow who exposed the bidding ring involving Apfelbaum. That is a more recent event compared to the one Charlie was talking about.

Apparently Stolow participated unofficially through a member of the ring. Seeking to extract some additional "benefits", he threatened to expose the ring. When they balked, he showed them he wasn't bluffing.

Regarding the APS response, the APS eventually did some expulsions, but that was long after the accusations broke. The reason used by the APS in awaiting the results of the court case before doing anything was that it was a civil case. Yet APS routinely expels members for philatelic indebtedness (often very trivial amounts) based on the word of the accuser and the lack of response by the accused -- there is never any "wait for the results" of the civil or criminal case excuse. The felonies committed by the bidding-ring members resulted in an estimated $5million+ differential in hammer price. That's the amount they essentially ripped off from collectors selling through the auction houses.

Douglas is correct, John Apfelbaum was on the ASDA Ethics Committee. And yes, unfortunately ironic. His comment with his guilty plea was the old adage "it's common practice and everybody does it". Sorry, I know of plenty of dealers who DON'T do it. Submitting a guilty plea and believing you did something wrong, are not always linked hand-in-hand. But that's his business, literally.

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khj
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11 Jun 2014
03:52:18pm
re: Is this permitted in the auction?

Yes, Herst wrote about that early bidding ring in his book.

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michael78651
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Moderator, MT Member

11 Jun 2014
04:16:27pm
re: Is this permitted in the auction?

Thanks. I knew Stolow had a role in exposing one of them. Now if I could remember who exposed the earlier one. I think it was a big name too.

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bobstew617
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12 Jun 2014
03:36:39pm
re: Is this permitted in the auction?

RE: John Apfelbaum, he was also APS Treasurer. I can't remember if he was still in that position when the charges came out.

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cdj1122
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Silence in the face of adversity is the father of complicity and collusion, the first cousins of conspiracy..

16 Jun 2014
06:05:12pm
re: Is this permitted in the auction?

" ...... Charlie, was that the incident that the Stolow brothers reported, or was that something else?......"

We started talking about a recent scandal that occurred about 20-25 years ago and involved both Apfelbaum and a small cadre of other dealers who should have known better. While not in that "Syndicate" as a member, Stolow, the whistle blower, did not exactly come out smelling sweet as a freshly picked rose. Apparently as long as he got a cut it was hunky-dory with him, which in my notebook of Puritan morals, makes him just as crooked as the rest. Also, in that same book is a lesson pounded into my derriere by my mother that "Every one else is doing it is a very weak excuse. ..." not to be accepted.
Later, I mentioned a much earlier bidding consortium that did their deeds in the early 1930s. That was mentioned by Hearst in one of his books. When I get home from my trip to Hawaii (Yes, hahaha ! ) I'll dig out those books and look up the details. I recall it being and interesting tale and I suspect all the participants have closed their albums by now.

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michael78651
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Moderator, MT Member

17 Jun 2014
01:39:09am
re: Is this permitted in the auction?

Look forward to your post about the earlier scandal.

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Author/Postings
Staantoo

29 May 2014
09:23:31am

Sometimes I am bidding against another member on several different lots and we are the only two bidders. I would like to contact the other bidder and try to negotiate an agreement to split the lots so we can stop bidding all the prices up on each other. Is this permitted under the rules since it could be seen as unfair to the seller?

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smauggie

29 May 2014
09:42:56am

re: Is this permitted in the auction?

I don't know that it would be unfair to the seller, as he/she still makes a sale. There is no specific mention of buyer "collusion" in the auction rules. Winking

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canalzonepostalhisto ...
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amsd

Editor, Seal News; contributor, JuicyHeads
29 May 2014
11:24:42am

re: Is this permitted in the auction?

it is not permitted Stan, precisely for the reason Antonio cited.

thank you for asking

David the auctioneer

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"Save the USPS, buy stamps; save the hobby, use commemoratives"

juicyheads.com/link. ...

They who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety. -Benjamin Franklin
29 May 2014
11:54:00am

re: Is this permitted in the auction?

"I don't know that it would be unfair to the seller, as he/she still makes a sale. There is no specific mention of buyer "collusion" in the auction rules."

It would most definitely be unfair to the Seller. Buyer "collusion" is as harmful as shill bidding, albeit to the Seller while shilling harms the Buyers. Regardless of a mention in the rules, "Buyer collusion" is a form of fraud and fraud is always a "no no."

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1 Member
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"The only thing necessary for the triumph of evil is for good men to do nothing. -Edmund Burke"

www.bobbybarnhart.ne ...

BuckaCover.com - 80,000 covers priced 60c to $1.50 - Easy browsing 500 categories
29 May 2014
12:13:59pm

re: Is this permitted in the auction?

In the long run, such behaviour is detrimental to the quality of the auction.

A number of years ago, I sold a great many good covers via auction (not Stamporama) to a small group of specialist collectors who knew each other. Initially, there was good competition, and I was a happy seller. I scoured the market and worked hard and paid good money to find interesting material for them, and was rewarded for the effort.

After a while, it became clear that they were doing exactly what Stantoo was suggesting. Competitive bidding dropped off, the "group" never seemed to bid against each other, the covers went (usually) evenly split, and the only advance I got were when an "outsider" (typically a specialist dealer) went up against them. I was no longer rewarded for doing the leg-work.

My response? I dropped that specialty. I no longer look for covers for them and a good and regular source of supply for them dried up.

Roy

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"BuckaCover.com - 80,000 covers priced 60c to $1.50- we added 10,000 new covers on January 12. If you like covers there has to be something for you!"

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smauggie

29 May 2014
12:49:43pm

re: Is this permitted in the auction?

I knew playing the devil's advocate would bring out the lawyer in Bobby.Big Grin

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canalzonepostalhisto ...

They who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety. -Benjamin Franklin
29 May 2014
01:46:49pm

re: Is this permitted in the auction?

Antonio, have you ever looked up the meaning of "sneaky?"Big Grin

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"The only thing necessary for the triumph of evil is for good men to do nothing. -Edmund Burke"

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smauggie

29 May 2014
02:02:46pm

re: Is this permitted in the auction?

Never needed to Bobby. There were always real-life examples close to hand. Winking

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canalzonepostalhisto ...

Silence in the face of adversity is the father of complicity and collusion, the first cousins of conspiracy..
09 Jun 2014
03:59:32pm

re: Is this permitted in the auction?

Long term collectors will recall that about twenty years ago several well known Dealers decided to create a buyer's combine designed to limit bids on large lots and they would meet afterward to divy up the purchases among themselves. Eventually they were exposed and charged with criminal fraud. I believe that they all paid substantial fines.
Interestingly, several still advertise their years of experience and honesty.
As Bobby and David pointed out; ....... "Buyer collusion" is a form of fraud .......

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".... You may think you understood what you thought I said, but I'm not sure you realize that what you think you heard is not what I thought I meant. .... "
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amsd

Editor, Seal News; contributor, JuicyHeads
10 Jun 2014
08:30:04am

re: Is this permitted in the auction?

well said, Charlie.

all were also expelled from APS, if they were then members, which points to great integrity on APS's part.


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"Save the USPS, buy stamps; save the hobby, use commemoratives"

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d1stamper

10 Jun 2014
09:49:05am

Auctions - Approvals

re: Is this permitted in the auction?

Did these companies or people ever rejoin the APS at later time or under another name?

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amsd

Editor, Seal News; contributor, JuicyHeads
10 Jun 2014
11:19:44am

re: Is this permitted in the auction?

i don't know. I remember some of the names, but i have been an on/off APS member. Linn's covered it in great detail.

David

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"Save the USPS, buy stamps; save the hobby, use commemoratives"

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DouglasGPerry

APS Member #196859
10 Jun 2014
11:52:14am

re: Is this permitted in the auction?

Earl P.L. Apfelbaum, Inc., was one of the companies involved. Here is a good summary:
http://archive.today/1w1Z

Here is the official court document regarding their plea agreement of 2002:
http://www.justice.gov/atr/cases/f203200/203220.htm

Basically, they and several other companies colluded to rig bidding to keep down auction prices (for the stamps these companies were buying).

I should note that this rigging involved the SELLING of stamps TO Apfelbaum (through other auction houses), but did not involve the BUYING of stamps FROM Apfelbaum. Personally, I have been buying stamps from Apfelbaum for years, and remain a happy customer.

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"All hobbies are absurd to those on the outside, and a joy to those within."
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michael78651

Moderator, MT Member
10 Jun 2014
03:25:03pm

re: Is this permitted in the auction?

I do not believe that Earl P.L. Apfelbaum Inc belongs to any philatelic organizations. My recollection is that the APS expulsion was permanent. Apfelbaum also voluntarily resigned its membership in the ASDA. That, too, has not been reinstated.

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DouglasGPerry

APS Member #196859
10 Jun 2014
04:10:30pm

re: Is this permitted in the auction?

That's my understanding, too. In fact, if I remember correctly, one of the Apfelbaums was on the ASDA Ethics Committee. Ironic!

Like
Login to Like
this post

"All hobbies are absurd to those on the outside, and a joy to those within."

Silence in the face of adversity is the father of complicity and collusion, the first cousins of conspiracy..
10 Jun 2014
11:38:01pm

re: Is this permitted in the auction?

Yes, it is a shame that what was a honored name in the business was and is still stained by that nefarious business. I also had dealt with the Apelbaum people who sold some gems I had found in the "70s. The staff were always polite and very helpful.
Now that my memory juices are gurgling away, I seem to recall Herman Hurst telling a similar tale of bid rigging that occurred before WW II when a group of dealers conspired at a then famous auction house in Brooklyn by single bids and later gathering behind closed doors to bid among themselves and distribute the profits quietly.
I do not recall the names or how they distributed their profits but it must have been similar, and I think that Herst was partly responsible for assisting the authorities in breaking up the illegal syndicate.


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michael78651

Moderator, MT Member
11 Jun 2014
12:18:59pm

re: Is this permitted in the auction?

Charlie, was that the incident that the Stolow brothers reported, or was that something else?

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"Author: Seasons of Fantasies and Dreams, The Whitechapel Fog"

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khj

11 Jun 2014
03:50:48pm

re: Is this permitted in the auction?

It was Greg Stolow who exposed the bidding ring involving Apfelbaum. That is a more recent event compared to the one Charlie was talking about.

Apparently Stolow participated unofficially through a member of the ring. Seeking to extract some additional "benefits", he threatened to expose the ring. When they balked, he showed them he wasn't bluffing.

Regarding the APS response, the APS eventually did some expulsions, but that was long after the accusations broke. The reason used by the APS in awaiting the results of the court case before doing anything was that it was a civil case. Yet APS routinely expels members for philatelic indebtedness (often very trivial amounts) based on the word of the accuser and the lack of response by the accused -- there is never any "wait for the results" of the civil or criminal case excuse. The felonies committed by the bidding-ring members resulted in an estimated $5million+ differential in hammer price. That's the amount they essentially ripped off from collectors selling through the auction houses.

Douglas is correct, John Apfelbaum was on the ASDA Ethics Committee. And yes, unfortunately ironic. His comment with his guilty plea was the old adage "it's common practice and everybody does it". Sorry, I know of plenty of dealers who DON'T do it. Submitting a guilty plea and believing you did something wrong, are not always linked hand-in-hand. But that's his business, literally.

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khj

11 Jun 2014
03:52:18pm

re: Is this permitted in the auction?

Yes, Herst wrote about that early bidding ring in his book.

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michael78651

Moderator, MT Member
11 Jun 2014
04:16:27pm

re: Is this permitted in the auction?

Thanks. I knew Stolow had a role in exposing one of them. Now if I could remember who exposed the earlier one. I think it was a big name too.

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bobstew617

12 Jun 2014
03:36:39pm

re: Is this permitted in the auction?

RE: John Apfelbaum, he was also APS Treasurer. I can't remember if he was still in that position when the charges came out.

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Silence in the face of adversity is the father of complicity and collusion, the first cousins of conspiracy..
16 Jun 2014
06:05:12pm

re: Is this permitted in the auction?

" ...... Charlie, was that the incident that the Stolow brothers reported, or was that something else?......"

We started talking about a recent scandal that occurred about 20-25 years ago and involved both Apfelbaum and a small cadre of other dealers who should have known better. While not in that "Syndicate" as a member, Stolow, the whistle blower, did not exactly come out smelling sweet as a freshly picked rose. Apparently as long as he got a cut it was hunky-dory with him, which in my notebook of Puritan morals, makes him just as crooked as the rest. Also, in that same book is a lesson pounded into my derriere by my mother that "Every one else is doing it is a very weak excuse. ..." not to be accepted.
Later, I mentioned a much earlier bidding consortium that did their deeds in the early 1930s. That was mentioned by Hearst in one of his books. When I get home from my trip to Hawaii (Yes, hahaha ! ) I'll dig out those books and look up the details. I recall it being and interesting tale and I suspect all the participants have closed their albums by now.

Like 
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".... You may think you understood what you thought I said, but I'm not sure you realize that what you think you heard is not what I thought I meant. .... "
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michael78651

Moderator, MT Member
17 Jun 2014
01:39:09am

re: Is this permitted in the auction?

Look forward to your post about the earlier scandal.

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