Suspected coin dealer employee seeking arbitrage - lowest of the low

People,
I suspect a coin dealer employed by a reputable coin collector company is buying coins wholesale through his employers channels and reselling them on eBay. Is this activity dishonest or illegal? Surely this is inefficient market behavior!

This is profiteering from having insider knowledge - but creates a loss to the company for which he works for.

Is this activity common amongst coin dealers who are employed by coin companies?

It is comparable to insider trading surely! If i were an equity research analyst and had insider information and bought stocks it would be illegal - if not illegal, dishonest and arbitrage seeking.

Do you think I should report this individual?

Many thanks

 

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First, welcome to the neighborhood.

I would say to leave it alone. It isn't like insider trading in the stock markets. I'm sure that his employer is aware of his purchases because they have to bill him for them. It would be another thing if it was an auction firm, and he was manipulating the bidding process to his advantage, but I seriously doubt that he could get away with it unless his employer is really, really stupid.

Chris

 

The question of impropriety can only be determined if there is a non-compete clause in their business/employer/employee agreement. A business relationship/ Independent Contractor agreement usually provides for a non-compete clause. If no such written agreement exists, there is no impropriety, and the Dealer ( Solicitor ) is free to develop a personal business relationships with any of the contacts made on behalf of the individual you term " Employer " .

 

Thanks for the kind welcome,

it's just very suspicious..I've been monitoring this individuals eBay page and I'm talking about a high volume of coin sales being made on a regular basis.

It just feels like they are taking advantage of avid coin collectors who purchase via online auctions. But at the cost of their employer...

Really, would you sell a coin at it's "cost price" to your employee knowing they were going to sell it with a considerable profit margin days later? Or even when the market timing us right? What type of business would want to face these type of losses? Somthing ain't right here...

Key point I'm trying to make: Im pretty sure this dealer is paying cost/wholesale price per coin from his employer and reselling them on eBay with a margin- making a risk free profit. Is this activity common amongst coins dealers who are employed by coin companies?

 

perhaps that is part of their deal.

Since I do not know how much you are paid by your boss, nor do you know how much I earn, it is not your business nor mind to know yours....

The boss may know, or how do you know that this individual hasn't been hoarding coins for years?

I could sell a bunch of coins and still have a bunch left over-- you never know.

If you saw him/her poscketing the coins at work-- hey that is one thing, but re-selling at a profit?
MYOB.

 

Well if that's the case... Then that's a darn good way of making a risk free profit! Geez, talk about market inefficiency...

 

If you have no knowledge of the employer/employee arrangement, and you cannot prove that the employee is stealing, cheating or embezzling the employer, then your concerns are likely to be viewed as meddlesome and may serve only to open yourself to personal liability for slander or libel.

Let it go!

Chris

 

Lots of deals go on with shop owners and the help. Not something to get in the middle of. I have known several that worked for coins. Never took home a paycheck.
I have also known of the help doing Ebay on the side for the shop owner.
Just no way to know what might be going on.

 

I buy coins at work on occasion and don't pay as much as I used to. It's a benefit of working in a coin shop.
I really don't sell all that often anymore but I do have an occasional want list I'll try to fill. When I do I talk to the boss about it. Nothing hidden. He makes a few bucks and I make a few bucks.

He also does this for some of our customers. One in particular has an ebay store and sells a lot of lower end stuff. He makes a few bucks but I know I don't want to mess with it. He's NOT guaranteed profit and he sinks a lot of his time into it.

In the case you have pointed out it seems to me no different than dealers selling to dealers. This happens everyday on a large scale.
We buy a lot of coins where I work and a lot of them we don't really have buyers for. They either end up on ebay or we ship them to a dealer that has buyers. It's called turning your inventory.
It's a business and idle inventory does us no good at all.

If this is unethical then I suppose the whole coin dealing industry should be shut down. Now THAT would be a huge blow to collectors and ebay alike.

 

Would say at the very least an unethical practice

 

When I do work for a certain number of dealers I am sometimes paid in coins. They pay me in coins that they have nothing in, or at least do not have lots of cash in, what I do with these coins, sometimes very nice, is my business and my business alone. I expect that this dealer is either buying the coins at a discount, but still providing his employer with a profit and turning over their inventory quickly so they have more liquidity...then making a profit on his own time; or he is doing something dishonest. However, unless you have some concrete proof that he is not on the level it is not your place to get into that business. You can speculate all you want but you should not act without some proof.

 

It is very common, even for the best known or more respected dealers, to have their employees sell their inventory on ebay under various user names while at the same time it is listed on their websites. There is nothing wrong with that situation.

 

Who's to say that he isn't going to coin shows on his days off and using his knowledge to buy coins and sell them for a profit? Or maybe his employer is having him sell them for him???

Just because you have the knowledge doesn't mean your employer owns it.

 

When I worked at the pawn shop, I had to sign a non-compete agreement which prohibited me from buying for myself, and then reselling to the shop at a profit, as well as buying from the shop and reselling to the general public.

 

for all we know he could be working for his rich uncle

 

Let me see. You are accusing him of;

• buying coins wholesale through his employers channels and reselling them on eBay

• Surely this is inefficient market behavior

• profiteering from having insider knowledge

• comparable to insider trading surely

Translation - he is using his brain and personality to make money. The day that becomes illegal, I need to go somewhere else. BTW, it is not comparable to "insider trading" because it is public knowledge and there is no law against it.

Now, if you have PROOF (not suspicions, beliefs, hearsay, etc.) that he is doing something against company policy,not for the company, and without the company's knowledge or approval, then you might try to notify someone.

 

yes Dear GD i have 1000 coins to sell wholesale? how soon can you transfer the money? $1 per coin just for you

 

Is it any different than a coin store employee buying stock from the store at cost and then selling them at retail? I can't think of a single coin shop where employees don't do this. Heck, I do it and I don't even work in a shop.
Guy~

 

A coin dealer would NEVER sell anything at COST... ever... You'd be out of buisness in no time.

Selling coins at wholesale is different. Selling a coin quickly for a small profit is how we stay in buisness. I might only make $5 if I spend $100 on a coin and wholesale it... but I make that $5 in a matter of hours or days... If I put the coin in stock and try to retail it and make $20 on it... it might take me several months. I'd much rather have my $105 in a few days to flip again then have to wait months to have $120.