snap names shill bidding ???

[pendragon]

Received this on FB


Sergio R. Rodriguez 05 November at 02:28 Reply
Hello everyone,

It's been a while since I've sent out a group message. But a BIG news piece that broke out today caught my attention and I felt everyone would benefit from being aware of it. Today, DNN.com reported the identity of a SnapName employee who placed bids to artificially inflate the prices of auctioned domain names by the company. He went by the username "Halvarez", but his real name is Nelson Brady, Snapname's VP of Engineering. This has undoubtedly cost many domain names to sell for much more than what they would have had "Halvarez" not entered the auction. We could all learn something from this, and I hope that this serves as a wake-up call to the domain name industry in general.

Here are some choice links to this shocking news:

DNN.com: SnapNames User Name “Halvarez” Was Nelson Brady, VP of Engineering Bidding on Domain Names [Updated] SnapNames User Name “Halvarez” Was Nelson Brady, VP of Engineering Bidding on Domain Names [Updated] | Domain Name News
DotsNews.com: Did Nelson Brady Sale to iREIT Blow SnapNames Fraud? Did Nelson Brady Sale to iREIT Blow SnapNames Fraud? Dots News
TheDomains.com: Can Oversee Get Some Of The Money They Paid For Snapnames.com Back? Can Oversee Get Some Of The Money They Paid For Snapnames.com Back? | The Domains
TechCrunch.com: Domain Industry Rocked By Shill Auction Bidding Admission Domain Industry Rocked By Shill Auction Bidding Admission
DNW.com: Domain Auctions: Chill Out, But Let’s Re-examine Domain Name Wire News Domain Auctions: Chill Out, But Let’s Re-examine - The Domain Industry's News Source

 

[foz]

Thanks.

What was the advantage to the employee alone (that's the angle the articles are giving). I see the shill bidding as an advantage to the Company Oversee not the employee.

Theirs more to it than Oversee just confessing out of the blue. Mr Brady may have forced their hand to many times and for to much $ to keep it a secret any longer.

 

[fish]

this post & thread responses makes for a good read, esp. with a few 'well known' domainers responding

 

[rob]

could be worth merging this with http://www.acorndomains.co.uk/domai...g-domain-names-domai.html?highlight=snapnames

 

[jasman]

Anyone else think this doesn't quite add up? If it was only Brady behind this, then how come he was getting a partial refund from the company for each name he won? Either someone else in Snapnames was in on the scam authorising the refund, or Brady himself was making payments from Snapnames' bank account to his own account THOUSANDS OF TIMES i.e. mass fraud, as well as shill bidding. If the latter is true, why would he bother bidding at all, surely he'd be better off just paying himself thousands of payments and not having this halvarez username keep appearing in auctions making it look like something suspicious is going on.

 

[rob]

Timing is very odd IMHO and I would be willing to bet this is not the last we hear of it all...

 

[Edwin]

He wouldn't have to pay for anything as long as he lost the auctions. The winning bidders would have had to pay more than if he hadn't bid up the domains, but he wouldn't have had to pay anything at all in order to do so - it's just a few keystrokes in the system, no doubt (and most likely he could see what any reserve was set at, and auto bid up to just under the reserve to make sure he didn't end up on the hook for the actual payment, but that the auction still ended higher than it would have without his intervention)

 

[jasman]

Yep, from the Snapnames email:

"Though on some occasions the employee won the auction, in many instances the bidding caused the ultimate auction winner to pay more for a name than had the employee not participated in the auction."

Also Techcrunch says

"The employee was shill bidding on auctions to pump the price up. When he won, he’d arrange for a partial refund from the company."

From: Domain Industry Rocked By Shill Auction Bidding Admission

I suspect in the majority of cases he was just inflating the bid level, and occasionally got caught out and ended up winning the domain.

So it looks to me like one of two possiblities has occurred:

1. Brady personally gained in some way from Snapnames' profitability. Quite possibly because being an executive he probably was a shareholder. But he may even have been on some commission based system. Either way, it's surpirsing that he would risk his own neck for a small chunk of the gain when presumably there were other much bigger shareholders who would see much bigger gains without risk to themselves. E.g. if he owns 3% of the shares and he influences an auction to push up the price by $1000, he'll only see a maximum of $30 and probably a fair bit less after operating costs are factored in.

2. Could there have been a conspiracy among several of them? Perhaps something occured recently (like some kind of gov. audit or even a lawsuit) which has exposed one or more occurances of shill bidding and they have no option other than to openly admit what has being going on. If there are several people involved, Brady may be being presented as a fallguy, while really taking the rap for all the others, presumably in some kind of deal.

It will be interesting to see if Brady is sued by Oversee.net. If not, I'd bet he was not the only one involved

 

[retired_member12]

I wouldn't be surprised if there is more to come in this industry. This should be investigated for criminal and tax purposes. Who gives a toss about the Directors or Shareholders, end users have been cheated here!

 

[rob]

DomainState.com - News & Views - An important message from SnapNames has some good posts.

Namely:

"If you bought a single domain from Snapnames since 2003, you HAVE been affected, because his [halvarez'] frantic activity inflated the entire perception of what domains where worth, even in auctions in which he didn't make an appearance."

&

Never, ever ask what Nelson will do for $60

It does make you wonder in some cases when people have a set price for their morals...! Not just re:snapnames

 

[Nigel]

We're in the money

Just got our compensation offer from Snapnames - $22 including interest :lol:

 

[rob]

...and you give up any rights to take it further

 

[Nigel]

That's right - can't see us signing for that sum. Mind you I see on another forum someone quite happy to take $25,000

 

[rob]

Thing is, at the moment people cant check the data to see if its a correct amount.

I realise in your case its not relevant, but for the $25k bloke, who is to say it shouldnt be $50k or $100k? Snapnames... who er, have a slight trust issue

 

[Nigel]

Agreed, but for this guy he said he was expecting about $25k so I think he's satisfied. With the recession I think a lot of people will be pleased to take the cash apart from all the little offers like ours where Snapnames will be happy that a lot won't sign for it.

 

[rob]

Pop back an email asking for the records in question as you dont think the figures match up.

Their reply would be interesting

 

[Nigel]

They've sent me the calculations. An $80 winning bid in 2007 for a mediocre .com. What I don't have is my earlier bidding records so I might ask for those.

 

[rob]

They've sent me the calculations. An $80 winning bid in 2007 for a mediocre .com. What I don't have is my earlier bidding records so I might ask for those.

Quick Q on that - is it via an unsecure web based PDF with several numbers in the filename?

 

[Nigel]

Yes - but I'm sure its legit.

 

[rob]

Yes - but I'm sure its legit.

I am not saying it isnt Just quite an 'open' way of doing things!