I have been recently reading some books written by Paul F. Taglione about US gold coins. It is a 4 volume set and one of the volumes is a discussion of "investing guidelines for the prudent investor". I find a lot of his theories about the rare coin market, grading, rarity classifications, and the economics of the market to be very interesting and insightful. I also read somewhere that Taglione's firm (called New England Rare Coin Gallaries, which did business under some other names) was the subject of a Federal Trade Commission probe. I tried to do some research as to what the FTC probe was about, but I have been having trouble finding more information. Does anyone know any history of this case, or know of where I can find more information. I am just curious seeing that I like his books. Thanks.
Neither "Taglione" nor "New England Rare Coin" appear in the list of cases on the FTC's website. That list only goes back to June, 1996, so if he had a problem earlier than that a direct inquiry to the FTC is the only source I would know of to find information. If you want to check out some of the other names you have, go to the FTC site and scroll up or down through the alphabet. If you find something, click on the name and it will take you to a summary page about the particular case, with links to all the pertinent documents. Good luck.
Paul and my grandfather started the CDCDA Coin Show in 1967. Paul was investigated for, if I recall, tax evasion and unfair trade practices.
Some info about the case is on pages 71-2 of "The Coin Collectors Survival Manual" by Scott Travers: "In Federal Trade Commission v. New England Rare Coin Galleries, Dana Willis and Paul Taglione, the allegations made by the FTC included, but were not limited to: 'defendants have falsely represented that the value of rare coin sold by defendants at a specific grade in industry pricing publications, when in fact, in numerous instances, the value of rare coins sold by defendants at a specified grade is worth substantially less than prices quoted for rare coins of that grade in industry pricing publications.' Although New England and its principals never admitted to having done anything wrong, they agreed to an out-of-court settlement (stipulated final order and judgement) which called for the closing down of the firm and liquidation of the assets."
That sounds about right. For the record, in this case, birds of a feather did not fly together. My grandfather was as honest as the day is long and the CDCDA show is now, and will always remain, run by a group of honest professionals.
The author of the book also noted that James Halperin, founder of New England Coin (and now with Heritage) had sold the business prior to the FTC settlement. Sounds like Tagilone was a good person "gone bad"
Thanks for all of the info. I did find the FTC case on Westlaw (a legal database). There was some procedural history as well, such as a dismissal of the case against Jim Halperin because he had nothing to do with the fraudulent practices (the court decided that because he sold the business to the two defendants a few years prior to the fraudulent activities, he could not be included in the proceedings). I will try to find some more information, because as I said previously, notwithstanding this case, Taglione does have some novel views about the economics of the coin markets. It's unfortunate that he went bad, though.
Personally, I believe that it is impossible to judge a man based on his performance or lack thereof in one area of his life. Many intelligent men have made poor decisions in one arena or another and this is no reason to discount everything they have done in a wholesale fashion. I commend you for taking an intelligent approach and being willing to seperate Paul Taglione's ethical misteps from some of his economic views.
I agree. Many times over the years good people have made bad decisions. Sometimes our decisions are based on good intentions, but turn bad do to other circumstances.
Does anyone know if Taglione is still in business, or active in the coin markets? I am asking because I know a lot of authors are willing to discuss with interested parties the contents of their books and to discuss their theories. I think it would be interesting to try to contact him and possibly to set up a discussion (and maybe include others, etc.). Thanks.
Here is some additional information that I found in a court opinion. I still think Taglione's theories on the markets is pretty insightful... On February 11, 1987, the FTC filed a complaint against Willis, Taglione, and their closely-held corporation, Standard Financial Management Corporation (SFMC). The complaint alleged that through SFMC, which transacted business under the name and style of "New England Rare Coin Galleries", the appellants had engaged in deceptive practices in marketing and selling investment-quality rare coins. These machinations, it was said, were in contravention of the FTC Act, 15 U.S.C. § 45(a)(1), and resulted in losses to consumers in the $15,000,000 range. The suit was no bolt from the blue. It followed protracted negotiations among the parties. The FTC and the appellants had fashioned a tentative settlement (embodied in a proposed consent decree) which provided, inter alia, for injunctive relief and the appointment of special counsel to oversee the liquidation of SFMC. Though the decree suggested consumer restitution, it made relatively modest arrangements to supply the wherewithal for such remediation: payment by an insurer [FN1] of $1,500,000 into a redress fund, to be augmented by the net liquidation value of the remaining assets of the corporation. The anticipated settlement imposed some rather mild compliance and reporting conditions upon the appellants, but neither envisioned nor required them to contribute personal funds. And, there was every reason to believe that the redress fund would be topped off millions of dollars short of what would be needed to make affected consumers whole. FN1. The insurer had underwritten certain coverage for SFMC's officers and directors. The sense of urgency attendant to the proceedings in the district court related in large part to the scheduled expiration of this insurance coverage at 12:00 noon on February 13, 1987--an event of considerable potential significance both to SFMC and to those who saw themselves as possible claimants against SFMC, its officers and directors, and/or the redress fund. For present purposes, it suffices merely to note this circumstance; any detailed explanation would be supererogatory. In agreeing to this settlement, the FTC relied in part upon the sworn personal financial statements submitted to it by Willis and Taglione, respectively. See, e.g., Part IV.P of the Revised Stipulated Final Order and Judgment ("In agreeing to the amount of redress ..., the Commission has relied upon the information shown in [the financial] statements...."). It is these very statements which lie at the core of the current controversy. The parties jointly presented the consent decree to the district court on the day after the complaint was filed. At the urging of all concerned and because of exigent circumstances, see supra n. 1, the district judge reviewed the draft order immediately. He held a lengthy hearing lasting into the early evening of February 12 and provisionally approved the decree on the morning of February 13, subject to several modifications which he instructed the parties to draft. The judge indicated then and there that he was concerned about the accuracy of the principals' financial statements and ordered Willis and Taglione to appear before him on February 24 so that he might, among other things, inquire into the statements. Because of the press of time, it was not thought necessary to await the rewritten version of the decree. The special counsel took control of SFMC, and forthwith filed a Chapter 11 petition for corporate reorganization in the bankruptcy court
This is exactly why coins and investments should remain apart. When dealers try to give investment advice it usually backfires.
That was one heck of a backfire! Seems to me they were not "giving investment advice" so much as they were deceiving their pigeons.
Well I do not know any of the parties involved, so I can only base an opinion about what I read in the thread. "selling investment-quality rare coins" and their attempts at marketing. I can tell you that in the time this happened, brokers and investors were flocking to the hobby. Maybe the lure of easy money got the better of them. Maybe I am just trying to look at the positives in the story. I fully understand that we live in a world full of liers and crooks, but one has to choose how they interpret the world in which they live. Kind of like a half full thing
As far as I am aware, Paul Taglione is no longer with us in this world. I believe his son is though, and he was also in the coin business. My family knew them both and personally I believe that reviewing the facts in the context of evaluating the legitimacy or lack thereof of his writings is wholly appropriate. I do not however feel that it necessary or appropriate to dig further in an attempt to discuss the character of a man no longer available to defend it. Read his writings, formulate your own opinions and decide whether or not any of his advice is accurate and/or helpful.
Of course I do not know any of the parties involved either, and I can only draw my conclusions from what I read in the thread. I remember those days well, MS 65 was a very common grade. Wall Street was creating funds based on the infamous Solomon Brothers report on rare coins. The illustrious Q. David Bowers published a book, "High Profits From Rare Coin Investment." (I have a copy). PCGS (I think) was going to grade coins using a computer. A doctor joined our local club at that time, he had already spent a bunch on Morgans and St. Gaudens. Too bad he didn't "Join the club before buying the coin." It was great to see him get excited when he saw his first US large cent, he didn't know they even existed.When the market crashed, he dropped out of the club. Doubt that he's bought a coin since then, probably into baseball cards.
