Wednesday, 4 January 2012

CNG Online Auctions

There is quite an interesting discussion going on over on the Yahoo Hammered Coins (that's UK hammered coins) collectors' forum about CNG's online auction accompanying the New York sale discussed in an earlier post. This closes before the live auction, at which the same coins are offered. This means that CNG knows the maximum offer of coins that have a lower price at the close of online bidding. The problem with this what it says in their catalogue:
terms of use III.1.i; we reserve the right [...] to bid on behalf of the consignor, and to permit the consignor to bid on his own lots. CNG may bid on its own account as an “insider” with information not available to the public.
There was a scandal a few years back over shill bidding in the antiquities market. Why is this not another example of shill bidding which is not only frowned on or barred by other auction houses as unethical, but in the UK is considered criminal fraud? CNG operate on the UK market too (Classical Numismatic Group, Inc., 14 Old Bond St. London W1), so this question is not irrelevant.

Pegasi Auctions (Ann Arbor, MI 48113, Holicong, PA 18928) and Auctiones GmbH (Bern 8, Switzerland) have the same phrase in their terms of use. Whatever lies behind these practices, selling dugup artefacts like coins online seems to be a nice little earner.

Vignette: Norman Rockwell illustration, auctioneer - caveat emptor


kyri said...

hi paul,if the sale of a particular coin specifically says "no reserve" than yes,it is shill bidding and wrong ,if the consigner has a reserve on the coin than of course the auction house will bid up and bounce imaginary bids off the walls till it reaches the reserve price.this happens all the time.
btw,i loved your headline "curtain-twithing" it realy made me laugh.if you ever gave up your day job you could carve out a great career writing headlines for the tabloid newspapers.

Paul Barford said...

The issue was over the unrealised maximum bids from (closed) online biding being carried over into the live auction.

The question concerns online bidding closing with somebody having won the coin for (say) 730 dollars, but who, in the online bidding had made a maximum offer of USD 1000. What was suggested is that by "imaginary bidding" ("bidding from the chandelier" I believe it is called) in the subsequent live auction, the price that same buyer has to pay on that item could be bumped up by the auctioneer within that maximum offer without anyone in the room actually being a bit interested in bidding above 730 dollars for it.

If the online maximum offer was above the "reserve" price, then the latter would have been met, and there is no problem.

I am not sure though I would say that an auctioneer bouncing imaginary bids off the wall to make it look as if somebody has been bidding up to the reserve price is not "wrong". This is price fixing, and even if the object does not sell, it inflates the perceived worth among auction watchers of it and similar items.

Perhaps the whole value system of artefacts is based on such sham processes and price fixing by those in the business of selling them?

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