AT ANTIQUE AUCTIONS
We have all read about the insider trading scandals in the stock market but did you see the Wall Street Journal article not that long ago of the insider trading scandal that is has occurred at antique auctions across the country?
Insider trading? Yes, but with antiques the term is "pooling." That's where several dealers at an antique auction get together and agree not to bid against each other in order to keep the price down. The seller who believes the auction is fair ends up being cheated. The dealers who practice pooling believe it is just good business and a matter of "friends" not bidding against each other.
The Justice Department, however, does not view "pooling" the same way as these antique dealers. It views the practice as illegal - an anti-trust violation. Not too long ago the Justice Department started a nationwide investigation to uncover and to prosecute dealers who conspire to hold prices down.
In Philadelphia, for example, twelve antique dealers were fined up to $50,000 and given probationary sentences of up to three years. Legal fees for one of the defendants amounted to $40,000.
We are all familiar with the term "buyer beware." At auctions, it is especially critical for the buyer to be extra cautious. Sellers at the auction now also have to "beware" and, if you are a dealer who practices "pooling," the Justice Department is now saying "antique dealer - BEWARE."
Copyright: 2009 Ken Durham, GameRoomAntiques
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