C.G.A in the news

I know there are diametrically opposed camps in this forum regarding TPGs, but I was curious what opinions y'all might have regarding the ongoing litigation against Currency Grading and Authentication, Inc (C.G.A.)

C.G.A. is one of the better known TPGs for paper bank notes. Before PCGS and NGC added notes to their services, C.G.A. was considered the more reliable TPG out there. Notes in CGA holders often brought premiums over raw notes of "equivalent" grade when sold at auction.

Recently C.G.A was a defendant in two lawsuits brought by an Ohio Coin Dealer, Vince Cavo. The first suit was settled, the second is on-going.

In the first suit the plaintiff alleged that a 1899 $5 Silver Certificate Star note in a CGA Gem Uncirculated 67 holder was significantly over graded and had in fact been repaired at some point in the past. Several experts in paper notes were querying along with an auction house and all agreed the note would now need to be listed as About Uncirculated, damaged, repaired.
In that suit the court entered a default judgement in favor of the plaintiff.

The second suit alleges that an additional 50 notes graded by C.G.A. are significantly over graded. The plaintiff is asking for a bunch of money as damages.


My concern is that one or fifty-one bad notes are going to spoil the whole barrel of C.G.A. graded notes.
I have a few notes in C.G.A. holders. I'm pretty confident that their grade matches what C.G.A. says....but if a paranoia develops regarding anything that C.G.A. put in a holder, it could significantly alter the value of the note should they be sold.

Your thoughts?

 

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Yeah prices are going to drop dramatically!!! Sell them all to me for $1 each...before they go any lower!!:hammer:

 

None of your notes in CGA holders are going to lose a penny of value because of this, because it's the notes that have value, NOT the plastic holder they're in. If you're worried that CGA holders will have some sort of stigma attatched to them and make notes in their holders harder to sell, take them out of the holders, problem solved. If they're beleived to be overgraded, they won't lose value by being regarded as the lower grade... because they never really had it in the first place. A note is what it is... whatever it is worth outside of a holder is precisely what it is worth inside of one; the holder doesn't add or subtract a single penny from its value.

My conclusion is; this just shows what a waste of money it is to have notes "professionally" graded as it is coins. What happens if someone decides another TPG has overgraded and sues them? Eventually people will realize that the grades the TPGs write on their holders are just someone's subjective opinion; no more, no less... at that point the TPGs would be out of business unless they can figure out a new way to rip collectors off by charging for a useless service.

If you have notes in CGA holders, keep them in there. They're nice sturdy plastic holders protecting the notes at least. And that's the only thing the TPGs have that's worth anything.

 

Is he the guy who defrauded the State of Ohio?

 

I believe you're thinking of someone else.

 

The first suit was not settled. The default judgement was vacated, and the matter will be adjudicated. CGA and Jess Lipka are suing Cavo for defamation.

 

Denoms, if you are who I thnk you are, it would be interesting to follow the outcome of this judgement. Please keep us posted to any new news.

RickieB

 

This is a rrather old story, but i thought i read in a magazine, that the original operson who submitted the notes in question for grading was a 'well known' person, but not neccessarily highly respected ( a dealer in florida).

Any new news would be interesting to read.

 

With the research I have done about CGA and how they overgrade there notes or there specialty of regrading PCGS and PMG graded notes that were graded AU then CGA grades them CH UNC. The one thing CGA can't do is cover there steps because serial numbers leave a trail and they have a long trail of overgrading there notes.I don't even look at a note that's been graded by CGA I just pass it over.

 

If you are buying the note and not the holder this is irrelevant.

 

I have to disagree in part. There are many possible scenarios where one buys a note basically sight unseen. Take for instance eBay or any online auction or brick and mortar auction where one mails or phones in a bid. You can make a coarse judgement about a note from photos and descriptions (remembering that both can be exaggerated, falsified and mis-represented thru omission or other means)
But no matter how good a photo is, nor how honest and critical a written description is, some things may not be apparent unless one can give the note an in hand first person examination.
This is where the value of a TPG comes in useful. Another set of (supposedly unbiased) critical eyes has looked at this note and made an assessment as to its condition.
We each become the final arbiter on the condition of any note we have, but it is handy to have a 'trusted source' who can help in the initial determination of whether to buy a note or not.

The problem comes when a TPG that was trusted violates that trust. CGA didn't always overgrade or misrepresent notes. For some time they were *THE* TPG for notes. As such they were as respected and trusted as PMG and PCGS are today.
Somewhere along the line they changed their business practices and a lot of people have been hurt by following that trust...buyers and sellers alike.

 

I might suggest to those who have not visited, go to http://www.keycurrency.com/badgrade/ and judge for yourself. Take the time to scan through the data gathered and I would be interested in your comments. If you do not want to post them here, feel free to email me at vcavo@bright.net.
Vinny

PS He still can't spell judgment....

 

So what does this say about C.G.A graded notes??

 

"don't get caught with your pants down choose a good, reliable grading service that you can count on."

 

If I found a nice note graded by CGA and the price was right and as a collector I would purchase it. Not because of the grading company reputation,but because I liked the note.Maybe some day I would sell after all this controversy is settled ,but I would be buying the note and not the grading company name.If I was a dealer then I would be hesitant about the buying or resale or quicker turn over of the stock and wait it out.

 

Tell me, if plastic hides problems, and you purchase the note, and you have missed the problem, and you paid way over the real grade, it will be a long time before you recover to the amount you spent origionally, if at all. Collectors just need to be aware, very aware!!

 

All the grading companies use plastic ,so if as you say plastic can hide a problem you would have to open (cut out) every PCGS,PMG,,,,etc holder .
Just inspect with a loop & light for repairs or defects,in other words buy the note not the grading co. unless you want to resubmit every note you buy & crack out,that could get very expensive,pcgs,ngc all under & over grade coins & paper as well.

 

Let me make it easy, who do you trust, Ragan or Obama. Both made mistakes. Look where we were; look where we are!

Let me be a bit more specific.... There are over 568 Large type notes listed in the Heritage auction for the FUN show scheduled in January. There is ONLY ONE CGA graded note in that auction. What does that tell you???

 

Connor1,

It is my initial interpretation of this Thread and it's content driving my statement here:

If I understand correctly, what is being said is that the OP is in grievance with said party for misrepresentation and or fraud.
I have no way to prove or disprove any allegations by either party.
It is my personal feeling that mistakes are and can be made by any human being.

But to knowingly upgrade what is supposed to be an unbiased opinion for a assigned appointment to an U.S. or Foreign Security is a matter of personal integrity. This is due to the fact that there is no regulation implied to this hobby as we know it. You the collector should be tuned in to what you are seeking in the item to be purchased. Most of all, a non expert in the field (like most all of us) can fall as prey, by those who are supposed to know and be a reliable unbiased grading source/service.

Until a regulatory standard is set, this will be quite impossible. To me, every note has it general characteristics and also it's personal ones for that individual note. It is up to you the collector to be educated and make the best possible decisions you can, for that in which you are interested in.

Regards,

RickieB

 

Cracking or cutting out ?

I still collect coins but very few since I've started paper.The practice of cracking out coins from holders and hoping to get a higher grade was a common practice. I'm just curious if any currency collectors also Crack/cut out CGA & resubmit to PCGS or PMG & save the CGA serial # & grade for proof of comparison ? This would be a good test ! Over or under grading happens I suspect and as Lettow says buy the note not the plastic if you like the note,but just be very knowledgeable and aware of what your buying no matter what grading company slabbed it !