Grey Flannel question

[kingjammy24]

Patrick,

During your numerous dealings with GF, did you purchase items from them which they owned (as opposed to auction/consigned items)? Were these items authenticated by GF and include a GF LOA?

If the answer to my original thread question is yes, then I'd like to pose a follow-up question. (Just to make sure my intentions aren't misinterpreted, rest assured I genuinely want to know the answer. I'm not trying to fan any flames here). My follow-up question to all forum members:

- Is it not a huge, irreconcilable conflict of interest when a dealer directly sells items that only they themselves (or their directly employed authenticators) have authenticated?

It's a fundamental tenet that appraisers shouldn't sell or buy items they have appraised. I think the reasons are obvious. Most professional auction houses, antique stores, art houses, etc are aware of this basic rule. GF is in a 'challenging' situation because they're one of the few businesses that states it's both a dealer and authenticator. Most are either dealers or authenticators or auction houses but not all 3 at once. In an arrangement of this nature, it would require a good amount of effort to ensure the different sides don't affect each other. When substantial profits come into play there may be a good deal of 'subtle' pressure from the Sales dept on the Authentication department. I imagine the only way to ensure an ethical business of this nature is to refuse to sell or buy any items submitted for authentication and conversely to sell only items which have been authenticated by a third party. Note: LOA's are different than warranties. Warranties outline the buyer's recourse. LOA's state authenticity.
Does GF really sell items they've authenticated?

Rudy.

[trsent]

- Is it not a huge, irreconcilable conflict of interest when a dealer directly sells items that only they themselves (or their directly employed authenticators) have authenticated?

Does GF really sell items they've authenticated?

Rudy, common, you are going to lose this one.

Doesn't MEARS publish which items they have a finical interest in major auctions somewhere?

What is the difference. They authenticate an item and then they sell it with their letter. I do not believe this to be a conflict. If it is, then Upper Deck Authenticated would be out of line selling merchandise with their letter of authenticity, right?

I like having debates, but I do not find much point to your issues with this topic. If a buyer has an issue with an item from Grey Flannel, they can send it to MEARS or Lou Lampson to have them authenticate it. I believe all items in the GF Auction come with a Grey Flannel letter, why is this a conflict to you?

They authenticate an item, find it valid and sell it - What are they doing wrong?

[kingjammy24]

Joel,

Good to see your caps button is off. Har har just kidding!
Re: conflict of interest. I can't 'lose' this one simply because it's fact. It's not me making this up, it's a basic tenet of the industry. Here is an excerpt from the Code of Ethics from the International Society of Appraisers:

"A dealer / appraiser should not make an appraisal of an item of personal property that the dealer/appraiser will buy, or that the dealer / appraiser owns and intends to sell."


Why Joel? Because if the dealer/appraiser intends on buying it, then he might issue an authentication which intentionally lowers the value of the item so he can buy it for cheaper. Example: Joel Alpert finds an '89 Bo Jackson jersey in his attic and doesn't know what it is. The truth is it's a game-worn jersey. Joel comes to me with this jersey. I'm both an authenticator and dealer. Joel is going to rely on my authentication. Recognizing that it's a $1000 Bo Jackson that, as a dealer I could easily re-sell, I say "Ok I'll buy it and I'll authenticate it. Let's see, my 'authentication' says it's just a replica, I'll give you $150". I intentionally issued a false authentication because I had a personal financial stake. Had I only been an authenticator who was paid regardless of the outcome of the authentication, I would have no incentive whatsoever to lie.
Secondly Joel, if I intend to sell an item, how do you possibly think my authentication will turn out? Here's a hint: It's legit. I don't even need to see it. If I'm going to make money selling it, then my authentication will magically make it legit. You can't see this?


Here is Dave Grob commenting on MEARS' policy to avoid this blatant conflict of interest:

"A [MEARS employee] may sell an item in a private transaction as an individual, but that item can not be submitted for a MEARS evaluation as part of that transaction. They will have to provide an independent letter of their own, just like any other dealer in the industry who buys and sells....In addition, we do not charge an auction house for the work done on those consigned items as it would be a conflict of interest for a MEARS member to profit both from the work and the submission at the expense of the auction house."

PSA/DNA's CEO Michael Hayes: "We consider it a conflict of interest for a seller to be the authenticator because this places the seller in a position of bias. Our employee-authenticators do not buy or sell and our company does not buy or sell...."


"They authenticate an item, find it valid and sell it - What are they doing wrong?"

Here's why it's a conflict: If you're going to sell an item, then there is a likelihood that this possibility of profit will cause you to authenticate an item in your favor. Furthermore Joel, if you're going to buy an item in order to re-sell and you're going to base the value of that item on your own "authentication" then again there is the "great likelihood" that you're intentionally going to issue a false authentication in order to buy it at a lower price for yourself. Want more? If you run a business, then the more more "authentic" items you have, the more you can sell and the more money you can make. Selling 150 "authentic" jerseys will bring you far more profit than selling 5. Well if the person who decides if these jerseys are authentic is the same damn person profiting from their sale, then how do you think the authentications will likely turn out? Surprise, they're all authentic! What a shock.

Joel, do you think it's a conflict of interest for a doctor to also be paid by a drug company? When that drug company comes out with a new medication, do you think that doctor will issue positive recommendations about it if he's being paid by the drug company? People depend on doctors for unbiased, honest advice, just like they do from authenticators. When the "salesman" is also the "authenticator", a bias automatically and immediately occurs and puts into question the objectivity and impartialness of the authenticator.

Rudy.

[trsent]

Rudy, sorry, I just don't get it.

You want to compare Grey Flannel with a drug company? Common, this is silly. They have a right to authenticate an item and sell it - They have for years and they will continue to do so.

So, Upper Deck Authenticated has Michael Jordan autograph a basketball. They put a hologram on the ball and sell it on their web site. Isn't this a conflict of interest?

Seriously, you are claiming that Grey Flannel may lie to a customer to buy an item cheaper and then authenticate it as genuine so they can profit. Sure, they COULD (SEE CAPS LOCK) DO THIS, but you are then stating that they are criminals looking to defraud customers on either side (the seller or the buyer) which I do not believe they are looking to do.

I spent a few weeks in Great Neck, NY a few years ago (I know, they have since moved to The Hamptons) and even though the prime rib every night was great, and I won about $8000 playing poker in NYC the second trip I made and I never found the boyhood home of Andy Kaufman, who is one of my heroes (Search my name on myspace.com).

Oh wait, I got off the topic, which I never, ever do.

In my time dealing with the staff at Grey Flannel, I found them to be very professional. I felt they were running a legitimate business, and I didn't see anything that would lead me to believe that they would conflict business such as you have suggested they may.

You can't win this argument, because it is accepted in this hobby by their customers. I believe (and I may be wrong) that GF Auctions is #2 behind Mastro in this industry. If this is the case, their customers don't have an issue with what they authenticate - Why should you raise your blood pressure over it?

Did you know when I was a young boy, I used to play poker with Bill Mastro? He liked to tell us that we were crazy to play with him because his theory is whoever has the most money will win at no-limit poker. I generally won, but I liked to hear his theory. By the way, I wasn't that young, I was at least 16 when I used to play with the traveling baseball card dealer crowd.

[kingjammy24]

Hang on. I never stated or implied Grey Flannel is doing anything questionable whatsoever. I was merely using them as an example of a unique company that is both authenticator and dealer. I never once stated or implied in any way, shape, or form that Grey Flannel issues false authentications, lies to customers, or engages in fraudulent practices.
I was speaking about the nature of a business relationship involving authenticators IN GENERAL who are also dealers, without any comment whatsoever on Grey Flannel's practices or history.

By the way, you brought up Mastro. Here's how Mastro feels:
"We are not dealers.

MastroNet is a consignment auction house. Many auctions are run by dealers offering material they own. And in addition to offering an infinitely inferior service, these auctions expose consignors to numerous unreconcilable conflicts of interest."

What do possibly think they could be talking about Joel?

At any rate, if you don't get it...even after PSA/DNA, Mastro, MEARS, and the ISA have spelled it out, that's ok. Just don't think that the fact that it's been going on for a long time means there is no conflict.
This conflict existed for years and years within investment banking before Eliot Spitzer finally had enough and fined several investment banks hundreds of millions.

Rudy.

[stlbats]

I have bought a couple of GU bats from Grey Flannel and received pretty good service. They even paid the shipping charge and came off the asking price considerably. Both bats came with PSA/DNA COA's.


Thanks
Jason

[trsent]

This conflict existed for years and years within investment banking before Eliot Spitzer finally had enough and fined several investment banks hundreds of millions.

There you go again!

You have to compare!

RUDY MY CAPS ARE ON SO READ CLOSELY!!!

DO NO BID OR BUY FROM GREY FLANNEL. LET THEIR SOLID CUSTOMER BASE CONTINUE TO DO BUSINESS WITH THEM AND THEY WILL OR WILL NOT MISS YOU AS A CUSTOMER, BUT STOP LOOKING FOR TROUBLE.

In other news, I was 4-0 in football this weekend and there is two cute girls from Minnesota sleeping in my bed right now so I am in a great mode. Oh wait, I am sleeping on the couch, what is wrong with this picture?

(Ten minutes later I return to the computer without a picture because they were up and showering)

Anyway, my point is simple - You are looking for trouble and your comparisons are out of line. Sorry, you include a drug manufacture and some guy name Elliot I have never heard of. My point is don't buy from them and we have no issues. Right?

In the meantime, when do you start your own authenticating service? I'm sure it will be a success!

[trsent]

I was sarcastic in my first post when Rudy posed his questions, but I often can't answer a question without coming off sarcastic. Oh well, I wasn't looking for trouble.

[EndzoneSports]

Patrick,

During your numerous dealings with GF, did you purchase items from them which they owned (as opposed to auction/consigned items)? Were these items authenticated by GF and include a GF LOA?

If the answer to my original thread question is yes, then I'd like to pose a follow-up question. (Just to make sure my intentions aren't misinterpreted, rest assured I genuinely want to know the answer. I'm not trying to fan any flames here). My follow-up question to all forum members:

- Is it not a huge, irreconcilable conflict of interest when a dealer directly sells items that only they themselves (or their directly employed authenticators) have authenticated?

It's a fundamental tenet that appraisers shouldn't sell or buy items they have appraised. I think the reasons are obvious. Most professional auction houses, antique stores, art houses, etc are aware of this basic rule. GF is in a 'challenging' situation because they're one of the few businesses that states it's both a dealer and authenticator. Most are either dealers or authenticators or auction houses but not all 3 at once. In an arrangement of this nature, it would require a good amount of effort to ensure the different sides don't affect each other. When substantial profits come into play there may be a good deal of 'subtle' pressure from the Sales dept on the Authentication department. I imagine the only way to ensure an ethical business of this nature is to refuse to sell or buy any items submitted for authentication and conversely to sell only items which have been authenticated by a third party. Note: LOA's are different than warranties. Warranties outline the buyer's recourse. LOA's state authenticity.
Does GF really sell items they've authenticated?

Rudy.

Rudy-

I have both purchased items outright and through their auctions. If I remember correctly, all itmes that come from GF will come with their LOA, regardless of method of sale.

As to your follow-up question, I'll leave that one alone. I have my own personal opinion of LOAs in general and since the parties involved in this debate appear to also be entrenched with their minds already made up, thowing out my biased opinion will only add fuel to the fire.


Regards,

[suave1477]

HERE IS AN ANSWER TO ALL YOUR QUESTIONS ABOUT GREY FLANNEL, they just recently teamed up with steinersports for a huge yankee auction. Do you think steiner would put yankees on the line if they were teaming up with a fraudelent or a bad repped company. Remember THE YANKEES IS STEINERS MONEY MAKER NOW. Brandon Steiner would not want to piss off THE BOSS ( GEORGE STEINBRENNER) by associating with someone less then reputable. I also have spoken recently with people from Grey Flannel and they seem to know what there talking about.