Author Topic: Daniel Zhao of Hosane Auctions controversy?  (Read 20796 times)

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Offline NBM

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Daniel Zhao of Hosane Auctions controversy?
« on: August 07, 2012, 04:53:48 PM »
Picked up on this from the newly released Pricepedia.

How Can This Be Allowed to Happen in our Industry ?

http://www.majesticrarities.com/pages/blog/bad-modern-chinese-coin-dealer/
« Last Edit: August 09, 2012, 05:39:19 PM by NBM »

Offline didochili

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #1 on: August 07, 2012, 07:27:32 PM »
nice.
I did a google search of "daniel zhao coin", and you know what, this story was the first in the search result.
I think it's important for this type of story/experience to be published online, so people have a chance to see the other side of these large companies.

Offline badon

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #2 on: August 07, 2012, 10:39:41 PM »
Thanks for posting this. The next question is, are there ANY Chinese auction houses that are NOT consorting with criminals?

Offline dobedo

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #3 on: August 07, 2012, 10:46:52 PM »
Honesty aside, is this legal? If not illegal, what can to be done?

Offline badon

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #4 on: August 07, 2012, 10:57:06 PM »
It would be illegal in the West, since the coin is the property of someone else. The West is kind of harsh in enforcing those property rights at the expense of unknowing buyers, but because of that, it discourages buyers from pretending they don't know property is stolen. For example, if your coins were stolen, and then someone sold them to me, the coins would have to be returned to you at my expense regardless of the fact that I had bought them honestly, and I did not know they were stolen. Next time, I would be sure to ask more questions about why the coins are so cheap :)

That kind of law in the West has pretty much strangled the black market for stolen property. Pawn shops are now very careful about who they buy things from, and the positive benefit is that the reputation of the pawn shop industry has been rehabilitated from what it was in the 1980's and earlier. Back then, pawn shops were more or less a marketplace for launderers of stolen property.

Offline Panda Halves

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #5 on: August 07, 2012, 11:01:37 PM »
Honesty aside, is this legal? If not illegal, what can to be done?

It is really quite simple...
Step one crook exposure: (Thank you Nick)
Step two: vote with your wallet

To be an efficacious dealer you need three basic elements:
Inventory, Purchasing Power, and Trust (Reputation)
Good established dealers know this and that is why stories like this are so frustrating.
Shenanigans like this are bad for the collecting community in general.

Offline PandaCollector

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #6 on: August 08, 2012, 12:07:06 AM »
I commend all those in the Chinese numismatic community (and there are many) who tried to resolve this matter before it turned into a train wreck. As I understand it many potential buyers held off from bidding on a coveted item. It's a very positive sign for the future growth of this field.

My hat is off to Nick Brown. Bravo!

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

Offline Gilmore

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #7 on: August 08, 2012, 08:02:14 AM »
This whole story is very surprising to me as a regular customer of Zhaoonline. For the past few months I participate in their auctions every month at least twice and have nothing other than just good experience so I am quite shocked reading this.

"Zhao purchases coins and then places these coins in either the Hosane or the Zhao-on-line auctions and inflates the prices".
I purchased coins on auctions in much lower prices than what any Chinese dealer offered me so I do not find this specific argument to be 100% accurate. "Buy it now coins" are overpriced, but is it any different than eBay?

"Zhao-on-line sells many raw coins that have flaws".
This is true. The English website does not have a description of the condition of the coins. The Chinese website however details the imperfections of the coins. I purchased some coins with little problems and found them to be in much better condition than described.
 
Their customer service is phenomenal. No better way to describe it.

I have developed a lot of trust to Zhaoonline over the past few months and really enjoyed doing business with them. Reading Nick's article is very shocking to me and frustrating.

Offline badon

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #8 on: August 08, 2012, 04:32:29 PM »
Hopefully after the shock has passed, peer pressure will succeed in making sure these kinds of problems don't happen again.

Offline fwang2450

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #9 on: August 08, 2012, 08:38:32 PM »
To play the devil's advocate, I don't see anything illegal in Zhao's transactions. The coin was sold by an employee of the German company to his office in Germany. So he legally possessed the coin, if the employee did not steal the coin out of the company.  If there was anything to blame, it was the messy internal mangement of the German company, whose employee could not tell an expensive coin. I totally agree that from the perspective of business ethics, the coin should have been returned to the German company. But ethics is a different story from law. It depends on good will and conscience. Who among us has not purchased a coin well below its market value, taking advantage of the ignorance of the seller? Like the person who purchased the piefort Year of Children silver coin on eBay for $5600? Is this ethical? Do we call this stealing since the seller lost at least $15000?

On the pricing of Zhao Online, the collector community in China all agree that the coins are much cheaper there than from the dealers. Zhao Online is a big service to Chinese collectors, freeing them from the grip of local dealers whose purchase price can be 40% lower than their selling price. It will develop despite the boycott from this side of the ocean.

Offline didochili

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #10 on: August 08, 2012, 09:29:39 PM »
I agree this issue is more about ethics rather than law.

Offline PandaCollector

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #11 on: August 09, 2012, 12:41:08 AM »
To play the devil's advocate, I don't see anything illegal in Zhao's transactions. The coin was sold by an employee of the German company to his office in Germany. So he legally possessed the coin, if the employee did not steal the coin out of the company.  If there was anything to blame, it was the messy internal mangement of the German company, whose employee could not tell an expensive coin. I totally agree that from the perspective of business ethics, the coin should have been returned to the German company. But ethics is a different story from law. It depends on good will and conscience. Who among us has not purchased a coin well below its market value, taking advantage of the ignorance of the seller? Like the person who purchased the piefort Year of Children silver coin on eBay for $5600? Is this ethical? Do we call this stealing since the seller lost at least $15000?

On the pricing of Zhao Online, the collector community in China all agree that the coins are much cheaper there than from the dealers. Zhao Online is a big service to Chinese collectors, freeing them from the grip of local dealers whose purchase price can be 40% lower than their selling price. It will develop despite the boycott from this side of the ocean.

Here is where this gets messy. Under USA law if the first buyer succeeds in establishing his ownership he may legally seize, or confiscate, the property without any obligation whatsoever to compensate the second buyer. The law does not recognize any rights for the second buyer, no matter how innocent they are. If someone who knows German law could chime in, that would be helpful. One person told me that German law is similar to American in this regard. As the coin changed hands in Germany it may be German law that decides the matter, at least outside of China.

So where does Mr. Zhao's alleged actions leave the high bidder for this coin in the Hosane auction? Possibly with a coin that can never be taken to much of the Western world. I really don't think a bidder in a public auction should ever find his purchase ensnared in a legal dispute. Why would an auctioneer place his own customer in this position?

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

Offline fwang2450

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #12 on: August 09, 2012, 12:58:02 AM »
Under USA law if the first buyer succeeds in establishing his ownership he may legally seize, or confiscate, the property without any obligation whatsoever to compensate the second buyer.
The question is how the first buyer can establish his ownership. I would assume that the German company returned his payment for the coin after they failed to deliver it to him. I cannot imagine that the US dealer would still pay for a coin he had never received. If he did not pay for the coin, he did  not own it. He attempted to own it but failed. I would call it stealing if the German company took the money for the coin and refused to return it even though they could not deliver. 

Offline PandaCollector

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #13 on: August 09, 2012, 01:16:59 AM »
I'm speculating here, but I don't believe the money was ever returned because it was always assumed that the coin would turn up, and the buyer wanted the coin. So the sale was never canceled, and remained the property of the purchaser. The good faith of the German dealer was never in question.

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

Offline PandaCollector

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #14 on: August 09, 2012, 01:34:38 AM »
An interesting legal analysis of this situation has been posted by yennus at:

http://forums.silverstackers.com/topic-29334-daniel-zhao-of-hosane-auctions-selling-stolen-coins-page-2.html

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

Offline dobedo

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #15 on: August 09, 2012, 08:50:17 AM »
Does any insurer sell title insurance for coins in US and other countries?

Offline pandamonium

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #16 on: August 09, 2012, 09:37:26 AM »
Sounds like there maybe no accountability for crime.  What else is new?  The best action that "we the people" can take is to not purchase from the accuser's auction or website.  Can we email Daniel Zhao to give our opinion?.........

Offline didochili

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #17 on: August 09, 2012, 10:19:45 AM »
My understanding after reading this thread and the other one on silver stacker is that whether Zhao broke the law is still in debate. I think he didn't. But there is little doubt that Zhao did something unethical.
Also financially I think Zhao didn't maximize his profit, and he fell into this mess I think he is paying dearly for.

I'll run the $ numbers:
The coin's Hosane auction expected price is $400k. I assume market price is more than $400k.
Zhao paid the German company less than 50% of the market price, so that would be between $130k and $200k. Let's say he paid $165k.
He was offered $100k to get out of this potential mess and he chose to risk his reputation instead.
The coin realized $290k - so he made 290-165 = 125k. Over the painless $100k he was offered. If he knew the result, I bet he would have taken the $100k instead.
I think he thought he would get >$400k from the auction, let's say he got $400k, that would then have been a $235k profit. Even with that, is it worth it? only he knows the answer.

Offline fwang2450

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #18 on: August 09, 2012, 10:50:00 AM »
We are hearing only one side of the story, with inaccurate accusations like "illegal", "stolen" and "pumping the price". These accusations leave me very skeptical of the "truth" I hear. By diverting to Zhao's online business which has nothing to do with this specific transaction, and mispresenting the facts, Nick undermined his credibility. Zhao's transaction with the German company was neither illegal or unethical. The problem arose when he intended to aution the coin. By that time, neither the US law or the German law could apply as the coin was in China and the aution was held in China. I agree it is not ethical to auction a coin in dispute. But then Zhao probably could justify it with his own story.

The best solution could have been the German company bidding the coin back from the auction and sending it to the American dealer. It was at fault in both transactions with the US dealer and with Zhao. Yes, it would lose some money, but it would make both customers happy. For its horrible management, it deserves a lesson.

Offline comeaux

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Re: Daniel Zhao, of Hosane Auctions, Zhao-on-Line selling stolen coins?
« Reply #19 on: August 09, 2012, 12:33:45 PM »
The best solution could have been the German company bidding the coin back from the auction and sending it to the American dealer.

I didn’t think of that … it would have worked out fairly well for everyone.

Offline NBM

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #20 on: August 09, 2012, 05:45:02 PM »
I have changed the title to this thread as "stolen" was misused.
I apologize to any who were offended.

Offline poconopenn

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #21 on: August 09, 2012, 06:33:11 PM »
IMO, the German company made an honest mistake in selling the same coin to two parties. It is the responsibility of German company to correct the mistake. Based on Nick's article, this German company did try to buy back the coin from Zhao by offering extra $100,000 of the original cost (about $100,000), but Zhao, apparently, considered the market value of this coin was much higher than the offering price. German company had the chance to buy this coin back by winning the auction (final value $290,000), but did not do so. This German company also can make offer to the US dealer by refund the money plus the difference between the original cost and the market value to settle the issue. It is very difficult to see the rationale for US dealer to after Zhao instead of German company. IMO, the transaction between US dealer and German company had never completed, since the coin had not changed hand between these two parties. The German company ought to correct its own mistake by making a proper compensate to US dealer to settle this case now. The prolong fighting between major dealers of MCC is not a good thing for MCC collector community.

FYI, the planned mintage of 1998 Spring Festival 5 oz gold coin is 128 and actual mintage is 34. Each coin was numbered at side.
« Last Edit: August 09, 2012, 06:40:08 PM by poconopenn »

Offline GDG's

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #22 on: August 09, 2012, 06:54:03 PM »
Sorry poco but there is something called ethics. Even the new law schools grads today have to pass an ethics exam in addition to the law boards. If they fail ethics they do not become Lawyers until they pass their ethics exam. What Zhao did was ethically wrong and it is my belief criminally wrong. This would be tough to prove due to different countries involved. The German company in NOT the one to blame but Zhao is in that he knowingly sold a coin that belonged to someone else. Anyone who would do business with Zhao or any of his companies is a fool. This is one man who is not to be trusted. He is an embarrassment to all auction houses and taints all Chinese Auction houses. He puts monetary gain above honesty and honor.

Offline Panda Halves

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #23 on: August 09, 2012, 06:56:33 PM »
Well said GDG.
I would say that ethics trumps legality on this one.
It takes years to build a reputation and seconds to destroy one.

Offline PandaCollector

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #24 on: August 09, 2012, 07:52:32 PM »
If anyone is interested, some industry feedback that I've gotten has been along the lines of, "The German dealer should have bought the coin back, even if it cost him several hundred thousand Dollars. If you are willing to make money from high-priced coins, then you have to stand up and be counted when things don't go your way. " Had that been done, none of us would have ever heard of this incident. OTOH, no one has defended the decision to auction a coin when the title to it has been questioned. I don't think it's a good thing when the auctioneer puts his own interests ahead of his customers.

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

low

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #25 on: August 09, 2012, 07:59:14 PM »
誠信為本、忠義為道.

Offline badon

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #26 on: August 09, 2012, 08:09:35 PM »
Sorry poco but there is something called ethics.

Please try to be 100% courteous, even when discussing this controversial topic. I'm sure we all appreciate poconopenn's input any time he offers it, even if we disagree with him.

Offline GDG's

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #27 on: August 09, 2012, 08:24:40 PM »
If anyone is interested, some industry feedback that I've gotten has been along the lines of, "The German dealer should have bought the coin back, even if it cost him several hundred thousand Dollars. If you are willing to make money from high-priced coins, then you have to stand up and be counted when things don't go your way. " Had that been done, none of us would have ever heard of this incident. OTOH, no one has defended the decision to auction a coin when the title to it has been questioned. I don't think it's a good thing when the auctioneer puts his own interests ahead of his customers.

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

I found many case laws that would deny the auction house the legitimately to sell this coin. Of course, this is U.S. case law. Auctions Houses are usually sensitive to these decisions due to reputation. This is not my area of expertise but at the very least is is completely unethical on Zhao's part. I believe his business will suffer due to this. I would forego making any amount of money dealing with him just on principle. The amount is not that great and I believe Zhao with suffer financially due to his actions. I'm surprised that he would risk his reputation for such a small sum of money.

Bringing up ethics is in NO WAY discourteous. I believe once ethics is thrown out the window it will have a severe detrimental affect on our hobby. I do disagree with poconopenns input on this issue and I don't believe I have been discourteous to him. I enjoy his discourse and just disagree in this instance.

Offline GDG's

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #28 on: August 09, 2012, 08:27:57 PM »
Sorry my above post was in retort to Badons

Please try to be 100% courteous, even when discussing this controversial topic. I'm sure we all appreciate poconopenn's input any time he offers it, even if we disagree with him.

I was in no was discourteous to poco or anyone else. Read my above post.

Offline GDG's

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #29 on: August 09, 2012, 08:33:32 PM »
I also wholeheartedly agree with Peter. Any coins I've ever sold if the buyer was not satisfied I ALWAYS reimburse them even if I don't have to. Why? Just good business. I want people happy and never have qualms sending coins back if someone is not satisfied. This is small change compared to Zhao's business but the honestly for follow to be successful.

Offline dobedo

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #30 on: August 09, 2012, 08:43:21 PM »
誠信為本、忠義為道.
What? No way ... I thought it's Wu Wei 無為為道 :-)

Offline Panda Halves

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #31 on: August 09, 2012, 09:05:52 PM »
不择手段, 欲海无边

Underbidder

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #32 on: August 09, 2012, 09:19:33 PM »


If anyone is interested, some industry feedback that I've gotten has been along the lines of, "The German dealer should have bought the coin back, even if it cost him several hundred thousand Dollars. If you are willing to make money from high-priced coins, then you have to stand up and be counted when things don't go your way. " Had that been done, none of us would have ever heard of this incident. OTOH, no one has defended the decision to auction a coin when the title to it has been questioned. I don't think it's a good thing when the auctioneer puts his own interests ahead of his customers.

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

Poconopenn and Peter have put it best, in this instance, IMO.
The German dealer seems to have made an error, and should have made it right by compensating the buyer.

It would have been an interesting court case.

Ethics is another matter, even though common ethics forms the basis for trust between two parties.  
A good question, is: what is ethical?  What are your ethics?  If a widow set out a rare  $10,000 coin from her former husbands collection in her garage sale, do you snap it up for her offered fifty cents, or do you notify her of its real value?
Did you ever make a "steal" of a deal from some uninformed seller who didnt know the full value of their coin? Did you feel ethically compelled to find out if they were aware of its value? Or rub your hands together in glee that you made a "steal"?
Are buyers obligated to try to clarify value from private collectors, vs dealers?  Is it "dog eat dog" at the highest level? Are there any changes to ethics along this continuum?

Offline badon

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #33 on: August 09, 2012, 09:22:01 PM »
I think the ethics in this situation are much more clear. The coin is actually the property of someone else, and was sold by mistake. I don't think any buyer likes to be told he won't get what he thought he had bought, but that's easier to deal with than a property dispute that could pop up later.

Underbidder

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #34 on: August 09, 2012, 09:35:20 PM »
I think the ethics in this situation are much more clear.

I'm trying to determine how clear it is.  Is it only clear because its a big amount, and big players?

Is there an underlying principle involved that also covers smaller buyers and collectors, such as us on this board?
If, for example, you bought a set of Pagodas, (say), for a hundred bucks on ebay, ( the Sterling ones- what a deal! ) but found out a similar sitution had occured and the set had been previously bought by another buyer, would you return the set?  Or "finders/keepers, bought it fair and square"!

I think most of us posting here would return it, from the replies.

What if it were a 1982 Platinum Panda? With just a couple of specimens in the world, never to be seen again in all likelihood?  Would you return that?


« Last Edit: August 09, 2012, 09:46:42 PM by Underbidder »

low

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #35 on: August 09, 2012, 09:50:08 PM »
I'm trying to determine how clear it is.  Is it only clear because its a big amount, and big players?

Is there an underlying principle involved that also covers smaller buyers and collectors, such as us on this board?
If, for example, you bought a set of Pagodas, (say), for a hundred bucks on ebay, ( what a deal! ) but found out a similar sitution had occured and the set had been previously bought by another buyer, would you return the set?

I will.

I can give another example. Several years ago I bought a supposed rare variety coin from an Australian dealer for about $400 (extremely small amount here.) A year later, the dealer refunded me the money for the reason he concluded (after very careful study with another very knowledgeable collector) the variety doesn't exist. He refunded me the money without asking me to return coin. I trusted his judgment and returned the coin to him.

In either case, he could just keep the money. I could also resell the coin (since I have got it for free now) and make some money.

Will I ever "steal" from unknowledgeable seller, if I know the fair market price? NO. In many cases, I even asked if the ebay seller would like to proceed with the sale when the price was way below real market price and I got a steal.

不择手段, 欲海无边

What? No way ... I thought it's Wu Wei 無為為道 :-)

I just have to say this.

宝贝当前,道义放两旁, 利字摆中间。

老外就是不明白,所谓先下手为强,后下手遭殃。在者,人不为己,天诛地灭。唉!

Hahaha.

Underbidder

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #36 on: August 09, 2012, 10:03:31 PM »
Low,
I like your answer. 

low

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #37 on: August 09, 2012, 10:18:53 PM »

Offline dobedo

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #38 on: August 09, 2012, 10:20:02 PM »
Low,
I like your answer, too. But I also like to reserve the right to respectfully disagree with you later. Hehehe.

low

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #39 on: August 09, 2012, 10:23:21 PM »
Low,
I like your answer, too. But I also like to reserve the right to respectively disagree with you later. Hehehe.

Sure. Hahaha.

Offline Panda Halves

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #40 on: August 09, 2012, 10:28:05 PM »
Please note it was low who took it to a higher level first....
You know it is something serious when the idioms come out.
 :001_tongue:

low

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #41 on: August 09, 2012, 11:01:56 PM »
Please note it was low who took it to a higher level first....
You know it is something serious when the idioms come out.
 :001_tongue:

Hahaha.

Offline SANDAC

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #42 on: August 09, 2012, 11:23:24 PM »
Hmmm, I thought treasure hunting is a fun part of coin collecting.  If I found a valuable variety in a pawn shop, or if the coin I bought cheaply was later discovered as a rare specimen,  I'm pretty sure I won't insist on paying more for them, now or later.  Both examples are real, BTW

Offline badon

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #43 on: August 09, 2012, 11:44:34 PM »
I think the ethics in this situation are much more clear.

I'm trying to determine how clear it is.  Is it only clear because its a big amount, and big players?

Is there an underlying principle involved that also covers smaller buyers and collectors, such as us on this board?
If, for example, you bought a set of Pagodas, (say), for a hundred bucks on ebay, ( the Sterling ones- what a deal! ) but found out a similar sitution had occured and the set had been previously bought by another buyer, would you return the set?  Or "finders/keepers, bought it fair and square"!

I think most of us posting here would return it, from the replies.

What if it were a 1982 Platinum Panda? With just a couple of specimens in the world, never to be seen again in all likelihood?  Would you return that?

You might be reading more into that sentence than I actually wrote. Either way, I'd love to own a 1982 platinum panda, but only if it's truly mine, uncontested.

low

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #44 on: August 10, 2012, 12:05:15 AM »
还是老祖宗说得好,以和为贵,就原“币”归赵(涌)吧!

Offline poconopenn

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #45 on: August 10, 2012, 01:32:29 AM »
Before we discuss the ethics issue, we have to determine the ownership of this coin. Based on Nick’s article, IMO, the transaction between US dealer and German company was never completed, since coin was never delivered to US dealer, while Zhao did not steal and bought this coin legally from the same German company. There is no question in my mind that the German company has handled this incident badly, before and after. It should cut the loss immediately by properly compensating the party involved to resolve the problem.
 
Recent fiasco caused by 30 minutes software glitch sent out thousands of unintended trades, distorting the stock market and leading to a $440 million loss at Knight Capital is a good lesson to be learned. The CEO, Thomas Joyce did not take the easy way out by filling bankruptcy and took the responsibility to cover all loss caused by his firm’s mistake. His honorable action has kept all major brokerage accounts to stay with him and injected enough money to keep his firm alive. This is the right way to correct the mistake by any company.

Let assuming that if the rare MCC market dropped about 50%, shortly after US dealer bought this coin from German company, I doubt we would discuss this incident at all. The US dealer would be very happy to receive the refund. There is no reason to even discuss ethic issue in this incident, since Zhao did not steal this coin from US dealer and bought this coin legally from this German company. IMO, this German company made a very poor judgment by offering Zhao a buyback price way below the market value, at least $90,000 lower, based on the auction result. This was not a good faith offer to try to resolve the problem, and make thing right. IMO, this is simply a business dispute, caused by German company’s mistake and poor crisis management skill. The significant price increase of this coin during that period made more difficult to resolve this issue since both US dealer and Zhao want to have this coin and handsome profit.

I do want to point out one critical point. It was hard to believe that such a high value rare coin was not being handled by a knowledgeable person in this German company. I would expect somebody in high level management to deal with Zhao directly in this instant. We simply do not have the whole story and something is not right.

By the way, I was not offended by GolderDragonGirls at all. We have a very healthy disagreement and mutual respect.

Offline GDG's

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #46 on: August 10, 2012, 10:05:55 AM »
Thank you poconopenn.  I had absolutely no intent at being discourteous to you and don't believe I was. Disagree yes, discourteous no. I think Badon if off base with that discourteous remark. I hold poconopenn in high esteem on the board as his posts are always knowledgeable and interesting. I believe he is one of the best posters on the board but we all don't always have to agree with one another. After reading poco's and others comments I must agree the German Co. could have handled it better BUT I do not not like the way Zhao handled it at all. If it was a U.S. Auction House he would not have been able to sell the coin. I appreciate Honesty and Integrity above all.Case in point.  I've bought expensive coins from KonaJim many times. He sends me the coins even before my check has reached Hawaii. I love dealing with dealers for whom I have trust and they have trust in me. If I have no trust in an individual of auction house they will never get my business.

Offline PandaCollector

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #47 on: August 10, 2012, 11:25:29 AM »
I superficially looked into German property law and can say that it does differ from English law in how property rights can be transferred. For instance, "as a basic principle, assignees cannot acquire a claim or other non-chartered rights from an apparent holder." There are also different definitions for when property rights are transferred.

It seems to me that there is the possibility that a court may find that Mr. Zhao gained control of the coin through fraud. It is alleged that, when asked, his representative provided the German dealer with a grossly and deliberately inaccurate market value in order to buy the coin cheaply. So, to my mind, there is no certainty that Mr.Zhao's ownership will be upheld. If fraud is found than that may open up other legal issues, as well.

The German dealer does not come off well, either, and his financial liability potentially could exceed the auction price of the coin. As I see it his actions are the cause of the entire mess, and he passed up his last opportunity to bury his mistakes quietly by not buying the coin himself at the auction.

The person I feel sorriest for is the bidder. He bought himself not only a coin but a headache. At the least his ability to resell his prize is compromised for the time being.

BTW, if Mr. Zhao would like to tell his side of this story publicly I offer him equal space in China Pricepedia to do so.

A final note: It seems fitting that this coin's number is 19, a prime number that is not divisible except by 1 (and itself). The rights to this coin are like that, and in the end only one person will own it all.

Best wishes,
Peter Anthony
China Pricepedia
http://www.pandacollector.com

Offline badon

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #48 on: August 10, 2012, 02:34:16 PM »
BTW, if Mr. Zhao would like to tell his side of this story publicly I offer him equal space in China Pricepedia to do so.

This is a very important thing. So far, we have all voiced opinions without hearing his side of the story. This subject is controversial even amongst people known for high ethical standards.

Offline goldpanda

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #49 on: August 25, 2012, 07:44:58 AM »
Just found the other side of the story from Hosane's latest announcement.
http://www.hosane.com/newsdetail.asp?newsID=469&LANG=eng


A 1998 Spring Festival 5oz Gold Coin at Hosane’s 2012 Spring Auction

It’s known to all that, to prove something in question, legal procedures must be taken. The fact is, it’s something unusual and completely unethical in the numismatic community that somebody, in our industry of numismatics, tries to circumvent the law with the “help” of others by making others take liability and encroaching someone else’s ownership of property in attempts to “help” a greedy dealer group.

As a matter of fact, such an important, invaluable 5oz gold coin (please note, GOLD COIN), was actually “missing” for over one year without being noticed. Is there any hidden reason? That’s what the people involved in the transaction should know.

The truth is, Hosane got in touch, quite timely, with this US dealer unwilling to mention his name (Why he’s unwilling to state his name? Did he has any common interest with somebody?), hoping he could provide certain legal documents to prove the ownership of the coin, some documents issued by court, certificate of hand-over or certificate of payment. Instead, what Hosane received was an inventory, a quote list, and a long statement. The US dealer stated that he “has” the ownership of the coin without any legal documents. As an auction company authorized by the law, Hosane is quite experienced in handling any disputes regarding ownership. In fact, such case was a very common civil dispute for auction companies, which there’re regular procedures to follow.

In fact, this coin never went missing. It’s always with the German dealer. Probably the transaction was stopped due to conflicts caused by price or payment. Did any problem occur in the transaction, resulting in the US dealer’s failure in getting this coin legally? Almost all Chinese numismatic collectors knew several versions of the story.

The fact is, this coin went “missing” without any written notification to either Hosane or Zhaoonline. All Chinese dealers would feel absurd about the issue! Is there any case filed and public written notification made for so important a coin went “missing” for so long? Definitely not!

Actually, this coin became invaluable long time ago. That’s a CHINESE FIVE OUNCE GOLD COIN. How could professional personnel of a numismatic company think a Chinese 5oz gold coin of small value? At that time, the coin was worth EUR 100,000. That employee hadn’t even seen anything so valuable in his life, how could “not realizing its extreme value” as claimed be justified? Furthermore, it’s told that the person who handled and sold this coin is the chief official of this German company. Interestingly, further investigations revealed that not only this coin, but a series of the so called “missing” coins showed up on Ebay or at the German market.

The truth is, the US dealer only purchased part of the items in the coin collection of the Germany dealer (please note “PART”), total value around three million US dollars, while their actual selling amount by the US dealer was over ten million US dollars. Does everyone think the US dealer’s price reasonable? It’s even more ridiculous that a slander occurred. Mr. Zhao has never got involved in the purchase of this coin, let alone meeting the German dealer. Actually, Hosane’s coin auction department comprises just 5 people, and holds up to 5% of Hosane’s business volume. It highlights artworks and antiques. As a CEO who has over 300 employees and whose business involves 700,000 lots hitting over 100 million US dollars annually, Mr. Daniel Zhao’s not even possible to intervene in the auction of an item at such level. It’s after the US dealer contacted Mr. Zhao, hoping that “help” may be offered to let him take the coin away immediately that Mr. Zhao asked his employees to report to him what really happened, for the US dealer had known Mr. Zhao 15 years ago. We can’t help suspecting that someone got Mr. Zhao involved intentionally.

In fact, Hosane never confirmed what the US dealer said would be effective once he acknowledged the ownership of the coin. Instead, very strict legal documents were required as a backup. Would you hand over all your properties to someone else should he acknowledges that they belongs to him? The statement of the people with the conflicts of interest is pointless. And another problem is that so far the US dealer is still unable to provide any proper legal documents to prove that he has the ownership of the coin. He couldn’t bring any lawsuit to any German or Chinese court to claim the ownership of the coin either. Why? That’s because Hosane has consulted many German and Chinese legal experts and was told that this dealer was actually insisting on seizing the property of someone else’s. Although this coin changed multiple hands, its ownership by Hosane’s consignor was legally acknowledged. That’s the reason Hosane did not stop auctioning this coin. One thing should also be clarified is that Hosane never buys any coins. The Spring Festival gold coin was consigned to Hosane by an investor. Nick’s blog was misleading folks into believing that Hosane purchased the coin.

Actually, the inventory provided was full of loopholes. Many gold and silver coins in the inventory (including the other 5oz gold or silver coins) were listed on Ebay. The fact is, the Germany dealer stopped supplying the US dealer and started legal sales on Ebay. Would the US dealer go to a German court with a statement saying all the coins in the inventory but listed on Ebay belong to him? Hosane is a platform similar to Ebay. It seems that the US dealer and Mr. Nick Brown should sue Ebay for covering the seller and the buyer in trading so many coins “in a group of many pieces”. If Mr. Brown and this US dealer unwilling to state his name send a letter like this to Ebay, Hosane will absolutely respect Ebay’s decision!

It’s more ridiculous that any of the certificates requested-certificate of hand over or certificate of payment-was always unavailable! There’s no legal basis of ownership transfer, as neither certificate of hand-over nor payment could be provided. Noticing this coin becoming more and more valuable, they just wanted to share the interest by taking away that of the collector.   

Actually, if this coin really belonged to the US dealer, measures should have been taken to get it back in either Germany or China by legal means. Why not take any legal measures, while “offer $100,000”? It’s unreasonable to buy back his “own” item instead of bringing lawsuit. Here everything gets clear that they did not have the ownership. They’re clear that no legal support would be on their side, no matter it’s German or Chinese law. What they really knew was the actual value. They just wanted to share with Hosane’s consignor the interest brought by the appreciation of the coin. Hosane should, not only ethically, but also legally, protect the consignor’s interest.

As we can see, such things only happened with those two American dealers. It’s believed that they will never happen with other US or Chinese dealers. Even though such things happened, Hosane was still communicating with the US, German dealers and the consignor so positively, with hopes that each party will feel satisfied after mediation. Unfortunately, it’s ridiculous and terrible that the US dealer actually threatened Hosane by an email that they have the power to destroy the reputation of Hosane and Mr. Daniel Zhao. Since it received the threatening statement from the US dealer, Hosane has ceased any contact with the US dealer. Although we only know a little about the US numismatic community, we firmly believe that Hosane will never compromise before any threat. Hosane would never get involved in the numismatic community if it is forced to be on some greedy US dealer’s side to harm the interest of the consignors.

Zhaoonline and Hosane are well known in Asia and Europe. Mr. Brown’s attempts to slander and stain their fame will be deemed nonsense by most collectors!

Why was Mr. Brown taking some much time and efforts to fabricate the so-called evidences in order to slander Hosane? It’s because there’s interest. They can do anything for it! Mr. Brown, in collaboration with the US dealer, cheated the coin collection out of the German collector. Every Chinese coin collector knew what the story really was.

The fact is, neither can Mr. Brown threaten Hosane, nor he can threaten the Chinese numismatic community. We really hope that he can tell us the terrible shill bidding story in which he bid on his own consignments together with the US dealer sitting in the first row in the Hong Kong auction, and how he cheated the coins out of the German collector.

Actually, everyone is clear who’s unethical, the person who plundered someone else’s ownership; who sought dominating world numismatic community; who used illegal measures to threaten others; and who said to someone else, “Your coins are mine” without any legal basis!

Perhaps both US dealers got hurt in the transaction with German dealer; however, it’s not justifiable that the US and German dealers tried to force Hosane into submission by throwing mud at it. Hosane never reveals any information of its customers or that of the mediation unless required by the law. Hosane also tried not to let the problem of Nick and the two dealers go public even if it’s hurt so deeply. Complete confidentiality is a very important code of conduct for all auction houses. Folks who already read Nick’s blog may also notice that it’s weird and questionable that Nick kept mentioning Mr. Zhao’s name while left the US and German dealers in shadow. 

Finally, we thank Nick very much for letting US numismatic collectors know Hosane (www.hosane.com) and Zhaoonline (www.zhaoonline.com). Perhaps not so many US folks knew them before, but now, people may think, the companies Nick took huge efforts to fight with are great companies and worth exploring. In the end, people will find out that, what Hosane and Zhaoonline built up for decades suits every one-being FAIR, SQUARE and LEGAL!
 

Offline fwang2450

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #50 on: August 25, 2012, 10:33:55 AM »
Thanks for posting. The key is the transaction records between the German and the US dealers. (I also found it weird that the names of the dealers have to be hidden. Why did Nick speak out, but not the dealers?)

Offline PandaCollector

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #51 on: August 25, 2012, 12:52:04 PM »
"Why did Nick speak out, but not the dealers?"

For starters, I believe just about everything in this statement that concerns  Mr. Nick Brown is inaccurate. To the best of my knowledge (and I've heard quite a bit) Mr. Brown had no role, or financial stake, in the purchase of the disputed coin from the original collector. That was entirely a matter between a German dealer and a German collector. Furthermore, I don't believe that Mr. Brown has, or ever had, a financial interest in the coin. It was ordered and paid for by a different American dealer. Based on what I've been told by several sources, the suggestion that Mr. Brown somehow cheated the German collector in any way is totally, 100% wrong.

Why did Nick speak out? As I understand it that's pretty simple: He thought it was the right thing to do. It wasn't about money, but principle. Not everyone may agree with what he says, but I'm certain he wasn't motivated by making a buck on this.

About the only item in the Hosane statement that I agree with is that the dealers (both German and American) who paid for the coins should stop being anonymous, and come forward. As this is now a public matter there's no alternative in my view. I will leave the rest of the public discussion to the parties directly involved, who may all be headed to court. I will also put a link to this statement in the next China Pricepedia so that people can read it and make up their own minds.

Hosane may be right that any publicity is good publicity, but in this case it looks to me like it will take a lot of washing to get all the mud off everyone before this story is over.

Best wishes,
Peter Anthony
China Pricepedia
www.pandacollector.om

Offline BChung

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #52 on: August 25, 2012, 01:23:05 PM »
I am glad Zhao made a come back. The blog post by nick is so empty and so blatantly bias is hard NOT to believe that he is intentionally trying to smear Zhao for his own benefit. As a matter of fact I find Nick's revelation of the identity of Hosane without their consent & protecting the identity of the US and German Dealer in question, much more unethical that what he is accusing in his blog post, which IMO is nothing more than his "opinion", with literally 0 hard evidence backing it up.

I also have to agree with Zhao, why not sue first. Than we can all back to the case so we can all see who the dealers are. I can understand why no one trust Chinese courts, but then sue in the German courts then. Even if the German verdict might have no affect on Hosane or Zhao, at the very least we will see who is truly guilty, then collectors from everywhere can back away from them.

I say its time to reveal the identity of the US and German Dealer, hard evidence needs to be provided, or simply take legal action. If not I suggest that Daniel Zhao should take the fight back to their backyard and sue Nick in the US and China for Defamation.

BTW I find that Hosane and Zhao not releasing the identity of the US and German Dealer in question open, just and ethical, the same cannot be said for Nick, who selectively reveal without consent and protecting the identity of the dealers in question.

Maybe Nick is just hot headed, righteous and simple, but unfortunately speaking for myself only. I Choose not to believe so.

If hard evidence cannot be provided or no legal action taken, I will choose to believe Zhao's & Hosane version of the story.

Offline SANDAC

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #53 on: August 25, 2012, 02:14:44 PM »
Wow!  whoever wrote this "press release" sure know how to fling muds and end up splattered the reputation of Hosane and Zhaoonline in his zeal.  That was 18 paragraphs of rambling innuendos when a simple statement like "Hosane has examined the ownership document and deems it appropriate to auction the item.  Hosane does not own the coin, and Hosane respects the confidentiality of the consignors" would do.  Hopefully Hosane will back away from these statements in the next few days.

Offline SANDAC

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #54 on: August 25, 2012, 02:25:01 PM »
I thought perhaps the rambling "press report" was due to bad translation so I went to hosane.com to look for the original Chinese text.  I can't find it.  Please post a link if anyone found the Chinese text.  Thanks.

Offline Silverfever

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #55 on: August 25, 2012, 03:20:14 PM »
Wow!  whoever wrote this "press release" sure know how to fling muds and end up splattered the reputation of Hosane and Zhaoonline in his zeal.  That was 18 paragraphs of rambling innuendos when a simple statement like "Hosane has examined the ownership document and deems it appropriate to auction the item.  Hosane does not own the coin, and Hosane respects the confidentiality of the consignors" would do.  Hopefully Hosane will back away from these statements in the next few days.

+1

They have definetely taken the low road if this statement had in fact been released by them.

Offline dobedo

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #56 on: August 25, 2012, 04:50:36 PM »
Ethics is absolutely subjective. Legality is relatively less so. When a coin is worth more than my house, as a buyer I'd demand not only a clear title but also buy title insurance for it. Except I can't afford it anyway, so this is only a good learning opportunity for me, and possibly a good business opportunity for those who would consider selling title insurance for coins. BTW this is also a good soap material. I really enjoying reading about it.

Offline didochili

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #57 on: August 25, 2012, 08:08:23 PM »
Wow!  whoever wrote this "press release" sure know how to fling muds and end up splattered the reputation of Hosane and Zhaoonline in his zeal.  That was 18 paragraphs of rambling innuendos when a simple statement like "Hosane has examined the ownership document and deems it appropriate to auction the item.  Hosane does not own the coin, and Hosane respects the confidentiality of the consignors" would do.  Hopefully Hosane will back away from these statements in the next few days.

+1
it sure made Hosane look desperately defensive

Offline pandaccumulator

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #58 on: August 25, 2012, 08:24:58 PM »
Perhaps Mr. Nick Brown should come up with the names of both the US & German dealers,instead of just mentioning Hosane and Zhaoonline, then the US dealer could provide evidence to show the legal ownership of the coin. After that point, it would be clear who was telling the truth and who was the real greedy one of the whole drama.

Offline fwang2450

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #59 on: August 26, 2012, 12:10:12 AM »
"Why did Nick speak out, but not the dealers?"
Why did Nick speak out? As I understand it that's pretty simple: He thought it was the right thing to do. It wasn't about money, but principle. Not everyone may agree with what he says, but I'm certain he wasn't motivated by making a buck on this.
Peter, you answered half of my question. How about the other half? Why did the dealers choose to remain silent and anonymous? After all, they are the first hand source of information and had their own interests encroached on.

Offline PandaCollector

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #60 on: August 26, 2012, 12:30:21 AM »
Peter, you answered half of my question. How about the other half? Why did the dealers choose to remain silent and anonymous? After all, they are the first hand source of information and had their own interests encroached on.

I completely agree. The hangup is that, from what I was told, the American dealer has been advised to remain silent for now. The German dealer has a separate issue that justifies respecting his privacy for the time being. I'm not happy with that answer, nor do I think this matter has been handled as openly as it could have been. If there is any legal action to come from this I hope it happens very soon so that more information is put into the public record.

Best wishes,
Peter Anthony
China Pricepedia
www.pandacollector.com

Offline fwang2450

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #61 on: August 26, 2012, 12:55:05 AM »
Wow!  whoever wrote this "press release" sure know how to fling muds and end up splattered the reputation of Hosane and Zhaoonline in his zeal.  That was 18 paragraphs of rambling innuendos when a simple statement like "Hosane has examined the ownership document and deems it appropriate to auction the item.  Hosane does not own the coin, and Hosane respects the confidentiality of the consignors" would do.  Hopefully Hosane will back away from these statements in the next few days.
Why did Nick use that many words in the first place, rambling off to attack Zhao Online's business with the allegation of pumping up the price? It had nothing to do with this case. IMO, that corroborated the alleged threat in Hosane's press release.

There is a lot of information in that release. Now we know there was a German collector, in addition to the US and German dealers, and the "employee" of the German company who sold the coin was in fact a company executive. The whole story is taking on a new perspective. IMO, any additional information is welcome. If Hosane had offered a short statement, they might be accused of hiding details.

Offline poconopenn

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #62 on: August 26, 2012, 01:52:34 AM »
Here is my 2 cents

Between August 2010 and December 2010, the rare MCC market was up double digit monthly, while between later 2011 and earlier 2012 the market was down double digit monthly. US dealer had a contract to buy this coin from German company in later 2010. However, IMO, German company decided to back out the deal, due to a significant increase of value of this coin and told the US dealer that this coin was misplaced and could not be found. In earlier 2012, the German dealer decided to sell this coin before market went down further. IMO, by selling this coin to a Chinese collector, German company might believe that this coin would not show up in the market place for a very long time, therefore, the US dealer would not find out the coin was sold again by this German Company. IMO, as mentioned in my previous post, this coin was sold to a Chinese collector accidentally by an inexperience employee without the knowledge of Sr. Management of the German company as suggested by Nick is not creditable, since rare coin such as this one does not come easily by any coin dealer. The Zhao’s response indicates that the inexperience employee mentioned by Nick is actually the top manager of this German company.

I was surprised that both Nick and Zhao did not say bad thing about this German company. Perhaps, we really do not have the whole story, especially both Nick and Zhao are not claimed to be the owner of this coin. IMO, this is the fight for position of leadership and market share of rare MCC market. In this instant, both names are tainted.

Offline pandamonium

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #63 on: August 26, 2012, 10:11:39 AM »
Bottom line is this: Who is the winner in all this?    The owner of the 5 oz rare gold coin............

Offline pandaccumulator

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #64 on: August 26, 2012, 12:09:41 PM »
There has been some interesting development. I would say so far Hosane & Zhao are the winner. Why? Based on Hosane's long, detailed "press release", not only they defended themself on accusations made by Mr. Nick Brown from every angles, but also they "attacked" back by challenging Mr Brown on his own "terrible shill bidding story" (quoted from Hosane's PR), plus Hosane & Zhao got free advertising, their names are heard more in the Western world now, just my two cents...if the US dealers keep silent or unable to prove the legal ownership of the coin, then we all know who the real winner is.

Offline fwang2450

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #65 on: August 26, 2012, 12:29:13 PM »
Here is my 2 cents

Between August 2010 and December 2010, the rare MCC market was up double digit monthly, while between later 2011 and earlier 2012 the market was down double digit monthly. US dealer had a contract to buy this coin from German company in later 2010. However, IMO, German company decided to back out the deal, due to a significant increase of value of this coin and told the US dealer that this coin was misplaced and could not be found. In earlier 2012, the German dealer decided to sell this coin before market went down further. IMO, by selling this coin to a Chinese collector, German company might believe that this coin would not show up in the market place for a very long time, therefore, the US dealer would not find out the coin was sold again by this German Company. IMO, as mentioned in my previous post, this coin was sold to a Chinese collector accidentally by an inexperience employee without the knowledge of Sr. Management of the German company as suggested by Nick is not creditable, since rare coin such as this one does not come easily by any coin dealer. The Zhao’s response indicates that the inexperience employee mentioned by Nick is actually the top manager of this German company.

I was surprised that both Nick and Zhao did not say bad thing about this German company. Perhaps, we really do not have the whole story, especially both Nick and Zhao are not claimed to be the owner of this coin. IMO, this is the fight for position of leadership and market share of rare MCC market. In this instant, both names are tainted.

These are two great cents. We have heard so many stories from eBay sellers that a coin won was "missing" when the bidder had a "steal". It would be very interesting to know how much the US dealer paid the German company, and for how much the German company sold it later to the Chinese consignor.

Offline SANDAC

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #66 on: August 26, 2012, 02:24:40 PM »
I thought Hosane's press release is an embarrasing disaster.  Yes, they showed up at the debate, but they didn't present their side of the story with much coherency.  Their basic approach is disparaging the motives and credibilities of their critics instead of demonstrating their own innocence.  The last paragraph of the press release is embarrasingly ridiculous.  If this is how Hosane going to do the debate, they are better off not showing up.

Offline pandaccumulator

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #67 on: August 26, 2012, 04:34:25 PM »
I thought Hosane did a fine job in their PR. It was long and detailed, provided "answers" to many of the question marks in everyone's mind. The two key elements of the whole incident are: 1) Did the US dealer have the legal ownership of the coin? 2)Did the auction house indeed purchase the coin 1st and auction it off for a huge profit as suggested by Nick? Hosane gave "No" to both of these two questions. Now, the "ball" has rolled over to the US dealer and Mr Brown's hands.   

Offline PandaCollector

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #68 on: August 26, 2012, 04:55:47 PM »
I thought Hosane did a fine job in their PR. It was long and detailed, provided "answers" to many of the question marks in everyone's mind. The two key elements of the whole incident are: 1) Did the US dealer have the legal ownership of the coin? 2)Did the auction house indeed purchase the coin 1st and auction it off for a huge profit as suggested by Nick? Hosane gave "No" to both of these two questions. Now, the "ball" has rolled over to the US dealer and Mr Brown's hands.  

I don't consider either of these questions to be the central issue here. For me the main point is, did Hosane have unchallenged title to a coin they sold? As  they reportedly knew a court challenge to their ownership of the coin was possible, or likely, I believe  the answer is no, they didn't have unchallenged rights to a coin in their auction. Hosane's response lays out why they think the coin was theirs, but to my mind that is not sufficient grounds for moving forward with the sale. My own expectation of any auction house is that it should be prudent enough to postpone a sale until all ownership issues are settled, in court if need be.

Best wishes,
Peter Anthony
China Pricepedia
www.pandacollector.com

Offline fwang2450

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #69 on: August 26, 2012, 05:26:22 PM »
I don't consider either of these questions to be the central issue here. For me the main point is, did Hosane have unchallenged title to a coin they sold? As  they reportedly knew a court challenge to their ownership of the coin was possible, or likely, I believe  the answer is no, they didn't have unchallenged rights to a coin in their auction. Hosane's response lays out why they think the coin was theirs, but to my mind that is not sufficient grounds for moving forward with the sale. My own expectation of any auction house is that it should be prudent enough to postpone a sale until all ownership issues are settled, in court if need be.

Best wishes,
Peter Anthony
China Pricepedia
www.pandacollector.com

It really depends on what was the challenge to the title of the coin. If the challenge was based on an inventory list with no transaction records, as Hosane alleged, why would the auction be postponed?
Looking at the big picture, if the threat from the US dealer was not an invention by Hosane, the whole episode started by Nick can be interpreted in a different light, as a concrete step to carry out that threat to destroy Daniel Zhao and Hosane's reputation. If that is the purpose, facts are not important anymore, such as how come a coin worth hundreds of thousands of dollars could be missing, who was the employee who sold the coin to Hosane's consignor, why no transaction records were provided to Hosane to prove the title. As long as Hosane and Daniel's names are called into question and smeared, the mission is completed.

Offline PandaCollector

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #70 on: August 26, 2012, 05:51:11 PM »
I sincerely hope that when all is said and done that the facts will all be public, and that no one will be smeared, but that everyone involved will be accountable for their actions. If policies and attitudes need to change then so be it. I expect that Nick Brown will agree with that sentiment, and I hope that the others who have roles in this tale will too.

Best wishes,
Peter Anthony
China Pricepedia
www.pandacollector.com

Offline pandaccumulator

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #71 on: August 26, 2012, 06:11:25 PM »
I don't consider either of these questions to be the central issue here. For me the main point is, did Hosane have unchallenged title to a coin they sold? As  they reportedly knew a court challenge to their ownership of the coin was possible, or likely, I believe  the answer is no, they didn't have unchallenged rights to a coin in their auction. Hosane's response lays out why they think the coin was theirs, but to my mind that is not sufficient grounds for moving forward with the sale. My own expectation of any auction house is that it should be prudent enough to postpone a sale until all ownership issues are settled, in court if need be.

Best wishes,
Peter Anthony
China Pricepedia
www.pandacollector.com

I see your points. I still think those two questions are among the cental issues here. One addressed the legal ownership of the coin: the consignor not the US dealer, the other addressed the ethical issue brought up by Nick. If there is any ownership dispute on an auctioned item, the auction house should hold off the auction only if the "challenger" can prove the legal ownership of the item/or provide sufficient evidence or there is a court order or legal action pending. In this case, none of these was in existence. Hosane acknowledged the consignor's legal ownership of the coin, the US dealer failed to prove his legal ownership of the coin, therefore, Hosane decided to move forward with the sale. Was this legally wrong? IMO, no, there was no law violated. Was this ethically wrong? Yes or no. If you really believe the US dealer should have the right to own the coin, then it is "Yes". If you believe the consignor should have the right to sell, and the auction house has the right to conduct their business, then perhaps, it is a "no".   

Offline Kamil

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #72 on: August 27, 2012, 01:47:44 PM »
Well, both sides lack a bit of truth:
Nick is claiming zhaoonline is inflating prices and selling the same coins later again.
Next sentence questions the quality of coins sold online at that site.
So in conclusion, zhaoonline is selling flawed coins at ridiculous prices to themselves?
ORLY?
I mean, why do all the hazzle with describing the condition of the surface in every single auction if nobody would adjust the price according to the condition and in the end buying your own coin?

Hosanes statement is a bit wrong in the ebay part.
When the German company started selling on ebay in late fall 2011, the scarcer bigger gold coins never showed up, yet they appeared on zhaoonline later somehow.
That leads to the next mystery. In case the US dealer really was cherry picking the german collection, why not take these bigger gold coins? They were almost all problem free, some still OMP, some came in capsule only - but sold very well.
I can`t imagine anything else then that the german company was asking the US dealer too much for them - which means they knew the value of their stuff very well and wouldn`t quote a price to Zhao well below market value. (Only other case would be the US dealer being out of money, which would be bit hard to believe.)

All in all both sides are digging in the dirt in order to gain some market, trying to keep the other side of the world out of business. Bit late, bit dirty - but very entertaining. Can`t wait for the release of chapter 3, nachos and cheese anyone?  :thumbup:

btw: 2012 Bronze Works I news released
« Last Edit: August 27, 2012, 01:56:04 PM by Kamil »

Offline robertos

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Re: Daniel Zhao of Hosane Auctions controversy?
« Reply #73 on: July 27, 2013, 04:25:59 AM »
Many auction houses are owned by auctioneers who call their own sales but some are not. There are a number of auction houses who hire freelance auctioneers to call for them.