Author Topic: Daniel Zhao of Hosane Auctions controversy?  (Read 21758 times)

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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.