Mears bidding on a MEARS lot? Yes it happened in the Spring 2008 Robert Edwards Auction. On Friday the 9th of January, I conducted my compliance audit/inspection as outlined in our policy for Rob Lifson and Robert Edwards Auction. The incident I am referring to occurred on an opening bid on Lot # 1466. I could not believe it…A Mr. Steve Mears bid on a bat consigned by Troy Kinunen. True story….
Sorry for the tease, but I wanted to make sure as many people read this article, for whatever reason. I consider it to be one of the most important I have written for MEARS. In the fall of 2007, Rob Lifson of REA was the only member of his segment of this industry to agree to the terms and conditions we set forth in our 2008 Auction House Contract Policy. In order for us to do work for Rob Lifson, he consented to a short notice compliance audit/inspection of his operation. This meant I would have to see his bidding records as means to assess compliance for things like prohibitions against “shill bidding.”
My methodology for this particular audit started with printing out the ten pages of lots and prices realized from the REA web site. This list produced some 1,673 items arranged in four columns per page. I wanted to perform a random 10% sample of lots so I had my wife simply highlight any four lot numbers per column. She had no knowledge of what the lots were and she has never seen a REA catalog or web site. I did not inform Rob in advance as to what lots I would be looking at and only in very general terms the type of information he would have to make available to me:
-Bidding Records
-Consigner Agreements
-List of Employees
-Copies of Actual Checks Sent to Consigners
When I arrived at REA, I briefly took Rob and his folks through what I wanted to see. The bulk of what I was looking at was contained on-line through the software REA utilizes. The employee list, consigner agreements, and proof that consigners were paid were a paper drill.
For each lot identified on the list:
-The consigner was identified in the on-line records;
-The consignment was checked against the consignment contract;
-The bidding history was checked to ensure the consigner did not bid;
-Copies of checks were cross-referenced to ensure payment was made.
In all of this I was looking to see if shill or “in house” bidding took place that can result in an item appearing to sell at some figure, when in fact it did not. The final check was to ensure an actual payment went out in the amount of the bid(s).
In the course of my audit, I found no evidence of this taking place or any other bidding irregularties or violations of our policy. The only incident of this kind took place in the opening of the 2008 auction and was brought to my attention personally by Rob Lifson. In only one other incident, did I find that a bidders and consigners last name matched. This was not the MEARS related teaser, but two separate individuals with the same common last name. These individuals lived in different states and to my knowledge are not related. While rather a tedious process to repeat in detail some 160+ times, the work was fairly easy to do given how well organized the folks at REA were and I thanked Rob and his folks for their cooperation.
As you might remember, one of the principle arguments offered for not signing the 2008 MEARS Auction House Policy is that auction house’s feared I would poach their consigner and bidder lists. I thought that was hollow argument then and do now. I provided Rob Lifson, at my insistence, a signed non-disclosure agreement. In addition, while performing this audit, I made NO copies, either paper or electronic of any list or document belonging to REA. I had a small notebook that I jotted down a few lines of text or questions I had for Rob, but that was it. Before I left, I made sure Rob had and chance to inspect and was shown this notebook. To get through 160+ lots in the manner I did in about five hours does not leave a lot of or time brain cells to remember every bidder by name, phone number, address, bidding or consignment history, favorite color etc… I was never in the room by myself and for about 95% of the time, labored within three feet of Dean Faragi at the next work station. While Dean is a dedicated and tireless worker, along with Tom D’Alonzo, Dean did have to go the bathroom while I was crunching data. I suspect Rob will let him make up those few minutes of work this weekend.
My point in all of this is, is that MEARS got almost no valuable information from REA on this visit. I say almost, because I did get a chance to see how a first class auction operates on a daily basis. This I take is no great “industrial secret” as I suspect Rob would be more than happy to show anyone how he and folks run things. Anyone who does things well and honestly is proud to shine a little light on their efforts and I am sure Rob Lifson would be most accommodating.
What Dave Bushing and Troy Kinunen know about my visit to REA is what they read here. I have asked Troy about a similar audit of MEARS Auctions and he has assured me that one will take place no later than late summer 2009. This is to be conducted by a professional outside auditing agency who will be looking for the same things I looked for. They may a different methodology or process given their professional background and expertise, but the standards will be the same:
No Shill Bidding
Ownership Disclosed
No Hidden Reserves to Make It Appear a Lot has Sold
I am sure there will be some who will throw stones at what it is I did, the manner it was done, and my motives for wanting to do it. Sad to say, but I see this all time in other aspects of what I do for MEARS and the larger hobby/industry. That’s fine since I have always had a vision of what I wanted to do in this hobby/industry and I am pleased to be apart of an organization that has provided me great leeway in pursuit of it. Until such a time as this industry gets what I feel are necessary standards and oversight, both internal and external, we will have to rely on the efforts of a few…but then again, I suspect most things in life are like that.
As always, collect what you enjoy and enjoy what you collect. If I were you, I would feel very comfortable about collecting items through bidding in a Robert Edwards Auction.
MEARS Auth, LLC
For questions or comments on this article, please feel free to drop me a line at DaveGrob1@aol.com