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<p>[QUOTE=&quot;Jaelus, post: 3340191, member: 46237&quot;]There is a conflict of interest here:</p><ol> <li>An auction company gets a consignment to sell a high dollar coin.</li> <li>An auction company is aware of a likely strong buyer for the coin.</li> <li>They auction the coin, but do not reach out to that buyer to advertise the auction. Potentially they do not publicize the sale as extensively to hopefully keep the bidding low (doing the bare minimum as per their contractual obligation).</li> <li>The auction company ends up buying the coin for themselves.</li> <li>The auction company reaches out to the strong buyer and sells it at a profit.</li> </ol><p>Sure, in that scenario the company&#039;s bid <i>did</i> push the price up, but through their other actions (or in this case, inactions) prior to the sale, they suppressed the overall bidding. The end result is that the coin hammers lower than its potential. They probably can do the above while meeting their contractual obligations, but they are not acting in good faith as the agent of the seller due to the conflict of interest.</p><p><br /></p><p>Perhaps they do not do this, however, at a minimum, the <i>appearance</i> of a conflict of interest will always exist when an auction house can bid on coins they are the seller&#039;s agent for. The only way to avoid this is to not bid on coins themselves, or to spinoff their buying operation into another company. That way if their buying operation has knowledge that can be used to make money on a purchase, there is no conflict of interest when the auction house does not use that knowledge to make money instead for the seller.[/QUOTE]</p><p><br /></p>

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