12,000 Auctions, 8,900 Bidders and 350,000 Bids: We Conclude Halvarez Was The Only Shill Bidder At Snapnames
When Snapnames put each user’s entire auction history into there respective Snapnames.com account last Saturday night, we went to work.
We scraped all the data from every auction.
We got every bid, every bidder, and organized them into a searchable database.
We then computed how many auctions each bidder was involved in, how many of those auctions the bidder had placed a bid other than the initial bid (of generally $60), and computed what percentage of the auctions they won compared to the auctions they had bid on.
Here are some numbers:
Amount of auctions we were involved in 11,973
Number of unique bidder Id’s: 8,890
Amount of auctions we won: 4,771
Amount generated from all the auctions we were involved in : $13,200,000
Now Snapnames.com said there were 1,000,000 auctions during this period which means we were involved in, and have detailed records from about 1.2% of all auctions.
Snapnames.com also said that the bidder Halvarez was in 5% or about 50,000 auctions.
Going through our history we found Halvarez was in 2,023 of the auctions we were involved in or around 17%, obviously a much higher percentage than the overall average.
Of course we like to think we were in many of the better, higher priced domain auctions which may account for the higher participation rate of Halvarez in our auctions.
Out of the 2,023 auctions Halvarez placed an initial $60 bid getting him into the auction, he placed another bid in 590 of those or 29.2%.
Out of the 590 auctions he placed a bid in other than the initial bid, he won just 34 or 5.8%.
Compared to the 2,023 auctions he was in, Halvarez only won 1.7%
For comparison purposes, we placed bids (other than an initial bid) in 7,300 of the 12,000 auctions we participated in or 61.7%. We won 38.9% of all auctions we had an initial $60 bid in and 64.5% of all the auctions we placed additional bids in.
We then computed this same information for each of the 8,890 bidders compiling a list with the number of auctions each bidder was in, number of bids each bidder placed, number of auctions each bidder placed above the initial bid, and the win rate for each bidder.
We looked at those bidders that had a high bid rate but low win percentage.
We then went in and actually looked at each of those questionable bidder’s accounts to see each of the bids placed and their bidding patterns.
Bottom line we could not find any of these high volume, high bid, and low win accounts that matched Halvarez’s bidding pattern.
If you look at Halvarez’s bidding pattern on other domains, except those he apparently wanted to win, it was mostly “one timers”.
Typically in an auction bidders will increase their bids as other bidders increase their bids.
So a typical bidder will bid $1K, then $1,500, then $2,500, then $3,500, then $5,000, and so on, until they win the auction or until the high bid is more than they are willing to spend and drop out.
What you see with Halvarez is an initial $60 bid and then a “one time” bid which pushes against the high bidders proxy.
Having access to the system, Brady knew what the proxy bids were and he used this information to push the sales price close to the max proxy bid.
He was careful not to push you right to your limit.
If you saw time after time the auction ended at your maximum proxy bid you, would know something was up.
So Brady seemed to push the bidding up to somewhere between 80%-90% of your high proxy bid, seemingly dependent on the price range of the bid.
For example, lets say you had a proxy bid of $15,000, like I did on GreatJob.com, he put a one time bid close to the ending time of the auction of $12,500 pushing my proxy to the winning bid of $12,750. The previous high bid from a real bidder was $8,888.
So other than the initial bid of $60, he placed no others except for a $12,500 bid pushing on the proxy.
Another example of an auction where I was not the high bidder is AcAdapters.com. Halvarez placed a one time bid of $12,500 when the last real bidder was at $7,900, pushing the winning bidder bid to $12,750 based on a proxy.
Yet don’t get the idea that all Halvarez did is push up 4 and 5 figure bids.
A lot of his bidding activity was at much lower levels.
I won auctions with a bid as low as $80 where it was just Brady and I in the auction, and my proxy was $111 – like in the case of thejammer.com.
In another auction, makeabetterlife.com, that only Halvarez and I were in, my bid was pushed to $100 while my proxy was $111.
Themotive.com was another auction just between the two of us. In this case he pushed my proxy to $105.
I know it’s small change.
Nickel and dime stuff.
Amazing that a guy who must have cashed out for substantial dollars when Snap sold to Oversee would screw with $100 auctions.
But he did.
Time and time again.
Stupid.
In all there were 211 auctions of mine that I won in which Halvarez was the second highest bidder, and of the 12K auctions, he was the second highest bidder in 339 of them.
In terms of comparing all bidders, he was the 5th most frequent second bidder, winding up in 2nd place a whopping 58% of the time, while only winning 5.7%.
No other bidder came close.
Yes there were other bidders that had a high percentage of second place bids, but none had the volume as Halvarez.
The other substantial second place high bidders were all substantial winning bidders, those domainers you all know and widely regarded as having the best portfolios.
The fact that bids were placed to push up my proxy, not only on the four and five figure domains but on domain auctions as low as $80, tells me one thing for sure: Brady used a script to automatically place these bids, pushing up people’s proxies.
The first auction I have record of him pushing my proxy bid up was on 3/27/05 and the last one took place just a couple of months ago on 9/1/09.
So 50,000 auctions over 53 months, lets call it 1590 days, comes to almost 32 auctions a day.
But wait, Oversee says that 75% of Brady’s bidding was done before they acquired Snapnames.com.
Oversee acquired Snapnames.com in May 2007, so if that figure is correct then 37,500 of the auctions took place in that 26 month period or about 48 auctions a day, every day, 365 days a year.
If we use that number and see that bidding took place on domain auctions with prices as low as $80 I would say there is not way Brady was sitting around bidding on these auctions, there had to be a script.
So now we return to the main issue.
Were there other bidder IDs that were used by Brady for shill bidding?
So we ask are there any other bidders who had the same bidding pattern of Halvarez?
We couldn’t find any.
We not only looked at the stats described above, but we looked at the percentage of time that each bidder wound up being the second highest bidder vs. their percentage of winning bids.
What did we find?
No one came close to Halvarez.
In 58% of the auctions Halvarez bid in he came in second, while only winning 5.7%.
Moreover no other bidder had the sheer number of auctions they bid on like Halvarez 590 with such a low winning percentage.
Now for some disclaimers.
Of course once again we were in only in 1.2% of all auctions. That means we have no records on 98.8% of the auctions. We believe our sample should be representative of the whole, but of course it may not be.
Is it possible that Brady had other bidding IDs that he used, but did not use them in auctions we were involved in?
Its possible, but doesn’t seem all that probable.
Next disclaimer, we only looked at high volume accounts.
Those that had a significant amount of auctions, bids, and second place finishes.
Could Brady have set up say 500 different bidder ID’s and shill bid on just one auction using that ID?
I guess he could, but we also recognize that if he did, we would have no way of figuring that out from the bidding history.
We need volume to determine patterns.
You cannot see a pattern on an account which only had 1 or 2 auctions in 5 years, nor can you make a determination based on one or two questionable bids.
Did we go through all 8,890 bidders to see every bid they placed?
No
We looked at every bidder with statistically troubling numbers that had volume of transactions
In those accounts we either were able to recognize the domainer associated with the bidder ID, or when we looked at the detailed bidding in that account, saw normal bidding patterns.
Nothing that looked like the proxy pushing bidding of Halvarez.
Our conclusions:
1. We do not think there was another meaningful bidder ID used for shill bidding.
2. All of the auctions in which Halvarez pushed our proxy bid up with his shill bidding, Oversee properly noted and gave us credit for in the settlement agreement they sent.
3. Halvarez seemed to be especially interested in adult domains. This may also account for why he was in a higher percentage of my domain auctions than overall.
4. I hate Frank, Kevin, Buydomains, and Bonkers for outbidding me on a ton of great domains as well as costing me a fortune on the ones I won.
Now for the outstanding issues.
Although we cannot pinpoint any meaningful shill bidder other than Halvarez, there are still issues.
What to do when Halvarez was the 3rd or 4th bidder?
Before I ran the numbers I was concerned that I would find Brady started the high bidding off in most cases, triggering other high bids, winding up being the 3rd or 4th highest bidder, which Oversee is not offering compensation for.
Frankly this happened, but not as much as you would think.
However where it did happen its troubling.
Take the auction memoria.com for example, where Halvarez put in a one time bid of $10K , when at that point the high bid was just $6,100. After the $10K bid of Halvarez was placed, two other domainers bid on the domain back and forth until it sold for $10,805.
These are the most troubling for me as we all know if one guy doesn’t bid $10K maybe no one ever does.
Maybe the high bid winds up at $8K in this example, but then we will never know.
In another auction for the domain Clash.com, Halvarez placed bids for $22,500, $25,000 and $27,500. The auction found two other bidders before closing at $30,500.
Since there were two bidders higher than Halvarez, no compensation is offered by Oversee.
What would have happened if bids by Halvarez had not been placed?
Impossible to say.
We have seen many instances where a domain gets re-auctioned on NameJet.com for non-payment weeks after the first auction. The typical result is the domain almost never sells for close to the second bid of the first auction, but usually in the range of 50% of the first auction.
Why?
It has to do with the dynamics of the auction, psychology of bidders, certainly a topic worthy of a book more than a simple blog post.
I know one things for sure, you can’t stuff the genie back into the bottle.
You can’t predict what the outcome of an auction would have been if a bid had not been placed, no more than you could predict what would happen if the auction was rebid at a different time or place.
I do think some compensation is in order for these situations, but it’s well above my pay grade to figure out the right solution.
Does this mean we think you should accept the settlement?
That is a question which requires analysis of many other issues which go beyond this post.
One thing for sure, before you decide to settle read and then re-read the release that Oversee wants you to sign.
Its incredibly broad and overreaching.
It seeks to free them from any and all liability whether it is related to this exact situation or not.
If you have a meaningful settlement you should get the advice of counsel.
Are there other issues beyond these?
Yes.
There are some bidding anomalies we have not been able to resolve.
There are some domains that appear as they were won by one bidder but went to another domainer.
These issues are for another day, another post.
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Oversee paid $25 million for Snap. First of all, they did not pay $25 million to have this blow up in their face. I can see people being upset, but if you cannot see that this hurts the company, then maybe you never worked for anybody but yourself. In any kind of corporate environment, this kind of scandal creates all kinds of waste (staff time, legal expenses, etc, etc), negative publicity, and on and on.
I do not hear them crying “I am the victim”. I said that they are victims, not them. They are acting like responsible adults. If you were any of their top execs, how would you handle this? Oversee.net has been very good to very many of us over the years, and that includes me. Yes, they have been good to me, because they are in this to make money. But then, who is not? Anyone here donating all of their income to charity?
Sorry I was referring to Rob Sequin .. your post got on the way.
“Let’s treat Oversee different than Snapnames here.
Oversee is the victim. Snapnames is the problem”
********************************
Does the word “responsability”means anything anymore anywhere …?
The shake down will start of the top…watch it happen.
Awesome analysis – definitely answers a lot of questions about this whole deal.
Howard
I did applaud the company for coming forward with the information and offering a solution.
http://www.thedomains.com/2009/11/05/the-5-most-surprising-things-that-came-out-of-the-snapnames-scandal/
I also by virtue of this post agree that Halvarez is the only bidder ID with substantial shill bidding.
However Oversee made some mistakes in my opinion in handling this situation which has made it worse.
1. There is no indication that Oversee or Snapnames has filed a criminal complaint or is seeking any criminal action against Brady. This is very troubling and upsetting to people. Domainers don’t understand why there are no criminal charges being pressed.
2. Oversee pulling down the history’s with Halvarez from people’s account last week was a huge mistake. I know they put all the history in the accounts last weekend, but the initial action of pulling down the info made people crazy.
3. The release that Oversee wants domainers to sign for their settlement is way over broad and asks people to waive rights to complain about things that may have happened in the past that may or may not be known to Oversee and/or Snapnames.com but is certainly unknown to domainers. This is pissing people off.
4. The complete silence from Oversee and Snapnames.com . There has been a ton of material written in the week since they released the information and they have not issued one statement to clarify, or answer concerns of the industry.
Silence in this case is not golden.
Excellent analysis. Thank you for the post.
larry
“Silence in this case is not golden.”
In the adult world back in 1997, 1998, 1999, I saw what silence does., Silence is not survivable no matter how big you are. The silence over the past 8 days has done irreparable harm to Oversee. Self inflicted wounds will do more damage than all others combined and we as an industry are witnessing what might be an IMPLOSION of the largest company in the space.
Really great research. I’ve been duped in this business plenty of times but I actually picked up on this shill bidding instantly in the couple of auctions I participated in over the years and I’d bet dollars to donuts that “halvarez” was not the only one that knew of this.
It’s ashame that tech crunch article labeled the whole domain business as shady when it’s a great business, it’s just if you’ve done enough business you would know that all business is shady. I’ll continue to do business with oversee, because they have the best registrar and the best auction platform by a mile. In this business, where it can be extremely hard to make money, if you choose to only do business with the most upstanding people you may have noone else left to do business with. I commend anyone with those ethics, just don’t go out and buy some Nike sweatshop made apparel before passing up good domains in auction, because that is much shadier business to me then a company offering rebates galore.
P.S. I’d be pissed off as hell too but I’d take the check. Depends if you are the type to return food 5 times until it’s perfectly seasoned or eat what’s served to you. Just don’t be surprised if the chef hocks a loogie in your food the 5th time though.
Rick said:
“Self inflicted wounds will do more damage than all others combined and we as an industry are witnessing what might be an IMPLOSION of the largest company in the space.”
May be a good reason to take the check before Oversee declares bankruptcy?
Then none of us get paid.
I’m not saying they are out of money but maybe this would be a strategic bankruptcy to clean the books declaring the Snap purchase a total loss, shutting down the unit and maybe merging into Moniker which has a great reputation.
Bankprtucy?
Los Angeles, Calif. Oversee.net®, the leader in Internet real estate, today announced that it ranked number 326 on Technology Fast 500TM, Deloitte LLP’s ranking of 500 of the fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America.
Oct 28th
http://oversee.net/news_details.php?id=420
“Its incredibly broad and overreaching.”
It looks like a pretty standard release. The point of a release is to bring finality to a dispute involving any and all claims possible, whether known or unknown, or on whatever theory, including ones nobody thought of yet.
EVERY attorney knows that, and has seen plenty of releases precisely like this one many times before. Here’s why:
My wife and I are driving down the road, and you hit our car. After some angry words you offer a payment in settlement of the accident. The release says:
“I’ll pay X for the damage to your car.”
So, I take X and get my car fixed. Then, I send you the bill for my broken finger, and you say:
“Okay, I’ll pay for your medical bills.” and you pay for the broken finger.
A month later, I develop a sore neck, and come back to you with the bill for my physical therapy.
By that time, you say, “Okay, I’ll pay X for the broken finger, and the sore neck, but that’s it. No matter what else you develop, no mas.”
I figure X is okay, so I take it.
Then, a couple of weeks after that, I come back with a bill for the time my wife lost from work, and her sore neck… and so on.
The entire POINT of a release is to avoid becoming someone else’s ATM. Life is uncertain, and lawyers are creative enough to slice a dozen different legal claims based on different theories from any one incident. In fact, your first lawyer might see a dozen claims arising from one incident. If you specifically settle those those claims, then you move on to the lawyer who sees a dozen more.
Everything that ever happens to me for the rest of my life, no matter what, is in some way related in some endless chain of causality to that one traffic accident. I find out, for example, that the guy who bought a lottery ticket at the store to which we were going, won ten million dollars. If *I* had gotten to that store on time, instead of delayed by the accident, then I would have won that lottery. So, you SOB, you owe me ten million dollars for letting that other guy get what would have been my lottery ticket.
There’s no end to it.
So, instead, as ANYONE who has ever settled ANYTHING and bothered to read the release knows, a release is written to cover all bases, known or unknown, and whether or not the claim arises in the future.
When we had our car accident, and you offered to settle, then your release should have said:
“This applies to you, your wife, anybody who was with you in the car, or waiting for a ride from you, etc…..”
-The point here is to avoid the claim for cabfare from your kid who needed a ride home from soccer…
“…for any claims against me and anyone related to me, whether known or unknown…”
– I don’t know why my brakes failed and I hit you. It turns out that my son was working on the car the week before and he’s the one who bled the brake line accidentally. But we are cutting off any liability theory, even if there is a theory that somehow relates back to me or my family….
“…existing now or in the future…”
– You’re just going to have to decide, based on your perceived probability of developing whiplash in a month from now, or arthritic degeneration of your knee fifty years from now, how much it is worth taking that chance versus taking a definite amount of cash at present
“…for anything relating to the car accident, and any damages whether compensatory, punitive, statutory, class action, [etc.]”
– Again, because there are a dozen ways to slice any legal claim, and the point here is that, as between you and I we are agreeing to end this thing, then the release seeks to cover all bases and types of claims on which a monetary recovery might be based. Maybe there is a state law that says, “If you hit someone with your car, then you owe them $100″. We are including that in this. Maybe you hit five other people on the street because you left your brother’s house drunk, and those five people want me to join them in an action against you and your brother for drinking in the first place. We are including that in this.
If we aren’t going to reach a point of finality, then there’s no point in a release.
The bottom line for anyone in this situation is that you are being offered an amount of money in compensation for what happened. If you don’t like the amount you are being offered, and you think some contingency fee lawyer is going to find a pot of gold at the end of the rainbow, a pony under the Christmas tree, and that your eventual percentage after his take is going to exceed that amount of money… AND if you want to wait around for months or years for that – THEN DON’T TAKE THE DEAL.
Auctions can’t be re-run, and courts don’t deal with questions like how many angels can bid for a domain name on the head of a pin.
Maybe I’m just not smart enough, but I see two reasonable measures of compensation here… First, the difference between your last bid and the final bid, where Halvarez intervened (i.e. what it would have been without his action, and the purported basis being offered) and, second, the difference between your bid and whatever proceeds Brady received from names he won (i.e. a disgorgement theory). However, that second basis of recovery is between you and Brady, because that’s not revenue that Oversee received. Whether that is a significant amount in your situation… your mileage may vary. Then, on top of that, interest would also be reasonable.
There’s one final thing that every attorney knows… When you have a lot of people who have claims for a lot of money, that pot eventually is going to run dry. You can win a zillion dollars in the lawsuit lottery, and easily get in line with all of the other creditors for one penny on the dollar from the bankruptcy trustee.
John
I know you don’t want to engage in a lot of back and forth on this, but let me just tell you my thoughts on this release.
In your example of the car accident you release the other party for all actions and claims arising out of the accident. In that example you have one incident, an accident with someone you never met before, never had any dealing with and will most likely never meet again in your life.
Here you are dealing with a company that many of us not only deal with as an auction house at snapnames.com but many of us have used or currently use as a parking company in domain sponsor and many of us use for domain registration services at moniker.com
Now taking out most of the legal jardgon here is the release:
“”release and forever discharge…SnapNames, and its past and present parent companies (including Oversee.net), …subsidiaries, divisions, … for any and all claims, of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, previously existing, or now existing… which the Releasors…. against the Releasees, collectively, or any of the Releasees, individually, for or by reason of any matter whatsoever relating to the auctions for and acquisition of the Domains.”
The release then goes on to include without limitation any claim regarding the bidder Halvarez but does not limit the release to just activity by the bidder Halvarez.
So if 3 months from now 10 more bidder accounts are found to be fraudulent, your waiving your claim for compensation on those. If you find any accounting errors, your waiving your right to claiming any compensation for those.
If all your getting paid for the bidder Halvarez’s why should you waive your rights against anything more claims arising from Halvarez’s account?
Talk about swimming upstream to protect this release. It’s GARBAGE that no attorney in HIS right mind would advise HIS client to sign. It does not pass the LAUGH TEST! IMO an attorney that even allowed his client to sign that before RESIGNING first……..is not protecting the interests of his client.
“If all your getting paid for the bidder Halvarez’s why should you waive your rights against anything more claims arising from Halvarez’s account?”
I’m not telling anyone what they “should” do, and I can’t say that enough.
If Brady was screwing around with the system, and covering his tracks, then Oversee might not know, and may not know for some time, whether they know everything he did.
Oversee is offering a settlement. Nobody has to take it. Absolutely, the entire point of a settlement is that it is a compromise. Monty Hall is offering you the 100 dollars in his hand, or the prize behind curtain number one. That’s life. Although in this instance, Oversee itself probably doesn’t know what is behind curtain number one. What any business seeks to do is to have definite figures in its books and not unbounded liabilities in amount or time.
Yes, there are a lot of unknowns. The offer being made, as I understand what I’ve heard so far, has a ONE YEAR fuse on it. Nobody is holding a gun to anyone’s head and saying “take the deal”. You’re saying, “but I don’t know all of the facts yet” when you have a one year sure thing already in your pocket. IMHO, by the end of that year, you’ll have a lot more facts on which to make a decision. But “people are pissed off” by the prospect of having a year to make a decision? Really?
On your numbered points above, though:
1. Criminal matters – It’s not up to Oversee to do anything other than make a referral to the AG. Expecting disclosure of a criminal investigation is not realistic. We don’t know if Brady had others involved with him. Oversee might not know. Whether there is a potential for a deal for full disclosure in exchange for cooperation, we wouldn’t know. Everybody by now should be able to recite the Miranda warning, whether they’ve ever seen standard release language before or not. Collecting evidence and impaneling a grand jury for an indictment doesn’t happen overnight. If there is a grand jury sitting in CA right now, it’s not going to be webcast, and that is certain.
So, you get a perp walk video of Nelson Brady, and his continued silence. It’s morally satisfying, but most business-minded folks find their moral satisfaction elsewhere.
Points 2, 3, and 4 conflict. Oversee made an initial reaction that was probably a bad PR move. Was it a result of their internal investigation locking down data that Brady and/or others were trying to destroy quickly? I don’ t know. But I doubt that more shooting from the hip is going to have the effect of not pissing people off.
When is Gov. Blagojevich’s criminal trial scheduled? The prosecutor still won’t release the complete tape recordings in that case. That’s the kind of time scale on disclosure in criminal matters that we’re talking about.
“In that example you have one incident, an accident with someone you never met before, never had any dealing with and will most likely never meet again in your life.”
No, Mike, in my example, my car was hit by YOU. I do hope to see you again. And, really, if we are never going to reach a point of finality on the car accident, then it is going to be a lingering impediment to an ongoing relationship.
Marital spats are probably even a better example. Some couples get into an argument over something, and before long out comes the parade of everything at which they’ve ever been at odds since they met, because they never reached a point at which they’ve reached a resolution on anything and agreed to move on. Ultimately the relationship simply devolves into a collection of uresolved bad feelings and resentments. Healthy relationships don’t work that way.
I totally agree that it is early, and all of the facts are not known. Many of the accusations being hurled are based on the assumption that Oversee knows all of the facts. I don’t know what they know or don’t know. What they have done is to make an offer saying, “If you want an immediate resolution, here’s the offer”.
By not taking the offer, you aren’t losing any rights at all. Maybe some people would prefer to put a dollar in their pocket now, maybe some people want to wait a while, maybe some people want to litigate.
A year from now, maybe “snapnames” will have a higher bid value than “mesothelioma”.
IMHO, it’s unfair to accuse Oversee of not acting “fast enough” when they pretty quickly put together an offer that anyone can take right now, or not.
And, no, I’m not working for Oversee since, as astute readers of TheDomains.com are aware, I remain unimpressed with the extent of their effort to enforce the phoney-baloney auction of ad.com held at TRAFFIC a while back.
Hypothetically, what would you do, right now, if you were Oversee, that would make everyone in the world happy over this crappy situation?
I have a strong feeling the numbers they used to make rebate offers ” in some cases” (like mine) didn’t include the pre-2007 history …
“just don’t go out and buy some Nike sweatshop made apparel before passing up good domains in auction”
Oh, Jody, domainers would never buy gasoline from Exxon/Mobil, ever since they had a drunk tanker captain permanently damage millions of acres of Alaskan wetlands.
Domainers would never buy a Mercedes or use Merck pharmaceuticals, since those companies used concentration camp labor during WWII.
Domainers would never use products made by Dow Chemical, which bought Union Carbide after stiffing the victims of the Bhopal incident.
Domainers would never use long-distance telephone companies which cooperate in warrantless wiretapping on a wholesale basis.
This is, after all, a respectable business and not some shady operation like the automotive, energy, pharmaceutical, chemical and telecommunications rackets.
“It’s GARBAGE that no attorney in HIS right mind would advise HIS client to sign.”
Hmmm…. over on your blog, Rick, you have posted an opinion that it is “invalid”.
So, if my attorney said, “someone is going to pay you $10,000 to sign an invalid contract”, then that is a contract I will certainly sign.
Why?
Simple.
You come to me with a contract that says, “I will pay you $10,000 not to sue me.”
My attorney says, “that contract would never hold up in court.”
That’s my lucky day, Rick. I sign the contract, you pay me $10,000, and then I sue you anyway.
You need to make up your mind. Either the contract is invalid, or it is a bad deal. But you can’t have it both ways.
If the contract is INVALID, then it is a GREAT deal.
I’d sign invalid contracts all day long if people were willing to pay me to do it.
Because you can’t come back and get your $10,000 by saying “it was an invalid contract”. If you do, then I sue you even harder! You’re the guy that handed it to me and you now can’t say I agreed not to sue you.
You have to MAKE me keep the $10,000 to argue your way out of my suit.
So, make up your mind.
“I have a strong feeling the numbers they used to make rebate offers ” in some cases” (like mine) didn’t include the pre-2007 history …”
The history of all your auctions is available for you to review at Snapnames. I kept the emails from every auction I was ever in at Snap. I compared those emails to my history and could not find a single example of an auction that was not in my history. Of course, your results may vary. You should (OK not everyone did this) at least have an independent record somewhere of your Snap domain purchases. It is a requirement for proper filing of income tax returns (at least in the US and most other countries). Check your auction history against your records. Like MHB, I went back and checked the bidding history on every relevant auction (those where I paid more than $60). In every case where halverez had a significant impact on my final bid, it was included on the Schedule of “Affected Auctions” that came with my “Rebate Offer Acceptance Agreement”.
I hold John Berryhill’s legal opinions in high esteem. However, I am still hesitant to sign the release as it is (and course, John did not say that anyone should sign it, at least not yet). If the release were restricted to halverez auctions, then I would sign in a minute. The fact that MHB has done such great research and that I also reviewed my auction history, means that I doubt that there was another such shill bidder in this. It is just that the way this release is worded, it appears that, for example, if DomainSponsor discovered that one of their employees had been siphoning off an average of $100 per day of my (and presumably, others) parking revenue for the last 6 years, that I would be totally dependent on Oversee not to pull out my agreement and say that I waived my rights to recover on that matter.
As several have already noted, trust is the foundation of business. It is how people handle themselves in difficult situations that tells one what they are made of. I could think of many less satisfactory ways that Oversee could have reacted and responded to this. If I were in their shoes, except for a more reasonable release, I could not think of anything much they could do at present. I plan on asking them to reconsider the release wording to narrow its focus. Clearly, I have no basis to trust Snap, even if it turns out that it was only Nelson involved. However, nothing Oversee has done shakes my basic trust in them and that they are making the best for most of us of a bad situation.
“I hold John Berryhill’s legal opinions in high esteem. However, ”
I have not offered a legal opinion. It would be malpractice to publish something on a blog and call it a “legal opinion”. Offering such a thing, to the entire planet as a client, is a violation of attorney-client privilege, and cannot be considered competent to address the particular circumstances of various and sundry who may read it. If I posted a “legal opinion” on which you relied, then could you sue me for malpractice if things didn’t go well for you based on facts of yours which I don’t know?
I’m also not suggesting that anyone should or should not sign this thing. I can’t say that enough. I just can’t see the outrage in Oversee having made an offer that nobody is obliged to accept,. and they are not compelled to make.
Quite frankly, I’d be comparing the language of the release to the SnapNames user agreement. I’ll bet you that the language of the ALREADY AGREED TO terms under which everyone participated in the auctions is very protective of SnapNames.
So, this offer isn’t being made in a vacuum. If SnapNames is pushed to the wall, then out is going to pop that user agreement and terms of service which probably gives them the right to rob you blind in the first place, and has all along.
John, who cares? It’s a shitty, self serving release that only the desperate would sign any way you want to look at it.
Not even YOU, the LEGEND of the industry can defend this CRAP! And, you have done a mighty job, but quit while you are behind.
I’d rather Oversee come out from hiding under their desks and give us the straight story as they know it without focusing on damage control. The TRUST is a fragile thing. It has already been irreparable damaged for many. How much damage are they willing to suffer? Their strategy has backfired big time. When do they figure that part out??
I would rather see a post defending Nelson Brady. Nobody has heard a word. We ASSUME he is the guilty party, but you the lawyer knows better than anyone, there ARE 2 sides and Nelson may not be going quietly. What would that defense look like and how many others could he bring down. NOW THAT is a reason to HIDE UNDER THE DESK!
Silence fuels speculation. If the news is even worse then the speculation, the jig is up and the game is over.
Howard.. indeed in my case only one transaction was missed , 400 petunias need to be added…
“Not even YOU, the LEGEND of the industry can defend this CRAP!”
I’m not sure what I’m being accused of “defending” here, but it is not historically unusual for Kings and Popes to see things differently.
I don’t have a dog in this fight. I’m not a domainer, and have not been engaged by any party in this situation. Nor am I looking too, since as I noted on this blog before, I do intellectual property and some occasional transactional stuff. I don’t do commercial disputes, and certainly not class actions.
Any choice to do something is a choice not to do something else. Does the existing Snapnames user agreement, under which the auctions were conducted, protect them from claims arising from internal malfeasance? I don’t know. But the alternative here is between, yes, relinquishing potential rights and making a compromise; OR finding out that the existing terms were worse.
Making a choice without knowledge of the alternative is not a good idea – and the settlement offered thus far allows a full year to decide.
Individual circumstances differ. If someone came to me who had been in one Snapnames auction two years ago for a single name that went for $1K, and was being offered $500, I wouldn’t suggest they lawyer up and go for the gold here.
Thanks Pope!
But i seriously doubt the main concern here is the dollars for many of us. I think it is the integrity of the industry that is being compromised here. The fallout we will all have to deal with that many just don’t see coming. I admit they are in a catch 22. Doing what is best for them as opposed to doing what is best for the industry. But I don’t know if I care. I think most of us know instinctively what needs to be done.
I see friend and foe alike telling them they are headed off a cliff. There’s a lot of smoke and I guess we are waiting for them to call the fire department and the fact that they are not just raises the ante and the speculation and the outrage and damage that goes far past the nose of Oversee.
I do believe the entire industry is currently under a cloud. Life goes on, business goes on, but I think we all share that sick feeling in the pit of our stomach. I think even a King and Pope can agree on that part.
Unlike a release in an “accident case”, where the 1x event/claim is based on simple (innocent?) negligence, the claim(s) in domainers vs. SnapNames/Ov/B arise from alleged fraud, failure to discover the pattern of fraud, etc.
When you have reason to believe that someone or some company has been party to a fraud, and when that company admits/says it failed to detect “that fraud” for years, should you embrace a release from that same company saying “I am releasing any and all claims, even ones that I may not be aware of”?
Not aware, in part, because the essence of fraud . . is concealment?
A release of all claims, including unknown claims, where the principal claim arises from fraud, is one of those things that should make you go . . . Hmmmmm . . .
John
I’ll bite on on this one:
“”Hypothetically, what would you do, right now, if you were Oversee, that would make everyone in the world happy over this crappy situation?”"
1. File criminal charges against Brady and announce that you have done so.
We are big boys and girls here and realize how the world works. Once Oversee files criminal charges its out of their hands and up to the law enforcement agency to decide whether to pursue it or not.
Also once you file charges we all know that Oversee would be the “victim” in a criminal proceeding and could comment no further.
However the failure of Oversee to file criminal charges and make that public that it has done so, is causing many in the domainer community to think there is much more to the story (which there may or may not be)
2. Offer some compensation for the bidding of Brady where he did not finish in 2nd but actively bid (more than just the opening bid). Let’s say by offering a 25% premium to the amount already offered.
You and I have been back and forth on what damage was caused by Brady’s bidding in cases where he wasn’t the second highest bid, but bid substantial amounts.
As we have discussed, and we both agree, there is no way of knowing what would have happened in an auction like clash.com where Brady bid $22,500, $25,000 and $27,500 and wound up as the third highest bidder in an auction ending at $30K.
One things for sure, Brady’s bidding did not make the ending price cheaper for the buyer.
What is the actual damage Brady caused by bidding but not finishing second?
We have no way of determining an exact figure, but the damage is certainly higher than zero, which is what Oversee is currently offering for such situations.
3. Limit the release to the issue at hand, Brady/Halvarez bidding.
In your example, where you and I have a car accident, in the release between us I shouldn’t be expected to waive any rights I had against you for any case you handled for me as an attorney, as it had nothing to do with the car accident.
By signing the modified release I’m suggesting, Domainers would give up their rights to seek and additional damages for actions related to Halvarez’ bidding in exchange for the settlement amount.
Fair enough.
If other shill bidding unrelated to Halvarez is found to exist or other improprieties in accounting or other issues unrelated to Halvarez’s bidding is found we would expect to be made whole for these situations in the same way compensation is being now offered.
The whole idea of this process should be for Oversee to get a substantial number of domainers receiving this settlement agreement to accept it.
4. Oversee should hiring a true third party forensic accounting firm to go through all 1,000,000 auctions like I did, which formed the subject of this post, with a date certain that those results will be announced.
That I think would put this process back on track and satisfy most.
I posted this on Rick’s Blog but am repeating it here.
I have never done business with Snapnames and really don’t care if those who did sign the Release and get their money or not. Call it a Conspiracy theory or mystery if you like because there are some things that don’t add up. It APPEARS ( and I emphasize the word purposely) that there is more to this bidding fraud than meets the eye. Nothing has been done by the supposed victim of all this, Oversee, to indicate whether they overpaid for Snapnames due to the inflated value generated by Brady’s fraud or that others were involved in a possible cover up.
They always say “follow the money” and there is a shitload of money involved here and not just from domainers. What about the VCs who put tons of money into Oversee to acquire Moniker and Snapnames? Are they really the big losers here? And what about the domain industry as a whole that Rick and I have spent the last 5 years promoting and now is getting a huge black eye from this sordid mess. There is one party who can bring this to a head – OVERSEE. And so far – nothing!
Everyday that passes by and they keep quiet and don’t address their customers and provide some kind of reassurance their silence gets louder and louder…
soon it will be deafening.
Not sure about this … but somebody mentioned at a forum that a small exodus out of moniker has started , perhaps somebody has handy data that can prove that rigth or wrong.
Mike,
On point 1, I admit complete ignorance of criminal procedure in California or Oregon. In my state, I can make a complaint to a relevant LE authority, and that’s the end of my involvement. They will typically ask me not to discuss the matter while they investigate.
On points 2 and 3, my question is what has been Oversee’s response to these proposals? I ask that rhetorically, of course, because I don’t see anyone proposing to actually attempt to negotiate with Oversee in the midst of calling for heads on pikes.
Narrowing the scope of the release makes sense. I’m skeptical of an arbitrary percentage for unrecoverable damages, but one can certainly ask. Again, this comes down to a question of practicality. If my offered payout is $10K, I’m not going to litigate over a few grand. That’s just me. Holding out hope that a court is going to award attorney fees and punitive damages if it turns out the “lone gunman” theory is correct, in order to cover the cost of litigation over a few grand is a rosy view of the world. If you aren’t paying for the legal cost up front, then discount whatever you get by the 40% your contingent fee lawyer is going to take. Or you can take a ride on the class action bus and get your coupon for a free Happy Meal by the time it’s over.
“In your example, where you and I have a car accident, in the release between us I shouldn’t be expected to waive any rights I had against you for any case you handled for me as an attorney, as it had nothing to do with the car accident.”
While I hear you, my reaction to that would be, “Well, Mike, just what else were you thinking of suing me for?” Suspicions can be a two way street. I don’t know what Oversee is “expecting”, or if they considered what nefarious motives could be read into fairly mundane general liability release language.
I like to ski, but if you’ve ever actually read the terms of your lift ticket you’d wonder just what it is they were planning to do to you out there. I read the liability waiver on a concert ticket at a local arena once, and it made it sound as if I was going to be the victim of utter mayhem.
So, coming back and saying, “Okay, this is good, but I want to reserve the right to sue you for ten other things” changes the dynamic to one of “why should we offer a release of any kind in the first place?”
There’s room for a constructive dialog on the topic, but heading up the parade of torches and pitchforks is not a posture that says we’d like to help straighten this out.
It does strike me as funny that the only reason I commented on this clusterf— in the first place was the suggestion elsewhere here that there was a nefarious reason I hadn’t commented (despite two trips abroad for WIPO and ICANN at different places on the globe in three weeks). Then, having expressed a view, I’ve been accused of shilling for Oversee and told to “quit while [I'm] behind”.
So, if you believe there is anything one can do to make everyone happy here, I admire your optimism.
John
“On point 1, I admit complete ignorance of criminal procedure in California or Oregon. In my state, I can make a complaint to a relevant LE authority, and that’s the end of my involvement. They will typically ask me not to discuss the matter while they investigate”"
I agree.
All they need to say is they filed a complaint and can’t discuss it
“”If my offered payout is $10K, I’m not going to litigate over a few grand. That’s just me. “”
For me its the principal of the matter.
If some amount was offered just to acknowledge that we were damaged by the bidding even when Brady didn’t wind up in 2nd place, , yes even 10%, I would feel much better about this whole deal.
Its not the money, its the principal.
Yes I am trying to plead for a change in policy by Oversee that would make settlement an acceptable solution for everyone.
“”heading up the parade of torches and pitchforks”"
I think I’m about the only blogger trying to support Oversee in much of this.
After all the whole point of this post, was after days and days of uncompensated research and analysis, I believe there was no other shill bidder ID’s at use.
This means in my opinion based on the numbers I have, Halvarez was the only bidder ID used for shill bidding
If that isn’t the best news snapnames.com read all week, I don’t know what was.
By the way, Mike, I have failed to add to the chorus here on the absolutely stellar piece of research you have done here. You are the silver lining of this cloud.
“I think we all share that sick feeling in the pit of our stomach. I think even a King and Pope can agree on that part.”
Absolutely. Which is why I haven’t had much of an appetite for participating in the discussion, and genuinely think I ought to have kept with that feeling.
But you know, and I only raise this for “think of the other guy” reasons here. A few years ago, a criminal fraudster wheedled his way into the domain community and managed to ensnare several others in his scheme. His indictment was filed under seal, and persons involved in the investigation were told not to talk about it. That criminal indictment is, of course, now unsealed. The first date of criminal activity mentioned in it is dated August 30. The sealed indictment was filed September 29, and the arrest was made October 3.
Now, that particular prosecution had a pointed urgency to it, and involved a relatively straightforward crime. The situation here with Oversee has a lot of moving parts, went on for a long time, and there are probably a lot of potential avenues of investigation.
It would not surprise me if people WITHIN Oversee can’t talk to each other for the time being, let alone get a coherent message out to the public.
But, in that prior event a few years ago, it must have been very frustrating for persons connected to the investigation to have to keep a lid on that sick feeling in the pit of the stomach. I felt badly for those folks then, and I feel badly for anyone who is going to be unjustly tainted by this.
I once read somewhere that sometimes a poor compromise is better than a good lawsuit. But…people’s mileage vary.
Here you made an excellent analysis. But $25 million for a snap?