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.
GREAT ANALYSIS! I am truly impressed with the amount of work and time that you must have put in to this blog. Kudos to you, Mike.
Ditto
Great work Michael. The statistics themselves are fascinating.
The comment … “So Brady seemed to push the bidding up to somewhere between 80%-90% of your high proxy bid”
actually matches what many people had intuitively suspected. Someone (or something, bot, whatever) pushing up the bid close to the proxy.
Wow, some serious forensics going on here! I think the DoJ needs you to have a run at AIG and their cronies next! Beautiful piece of work.
Nice work Mike. We’re still combing through stuff too.
Thanks for spending the time and effort (and money) to do this. If you don’t mind sharing , how’d you pull down all the bidders into this too . Scraper of some sort ?
Great insight, you’d think someone that created a system as sophisticated as he did, he would have used multiple usernames – but from what you put together is appears he did not.
1. GREAT post Mike. Thanks.
2. Brady is an ASSHOLE!
3. Never leave proxy bids and wait till the end to bid.
4. Brady actively, knowingly and aggressively gamed the Snapnames system and it appears he did so to get the revenue (and thus the valuation up) for Snapnames. Maybe he got bonuses for revenue targets too? ALL that money needs to be returned to Oversee AND all his domains need to be returned to Oversee or given to the underbidders.
5. Snapnames General Manager Craig Snyder was CEO of iReit for three years while his company bought domains DIRECTLY from Brady. Mr. Snyder needs to tell Snapnames employees and the domain industry what he knew and when he knew it. If he knew nothing then can he explain how iReit paid Brady repeatedly for domains without knowing that they were paying Nelson Brady? Was iReit duped too or did iReit know they were buying domains from Nelson Brady? If so, did Mr. Snyder not know that Nelson Brady was VP of Operations for Snapnames?
Mr. Snyder, would you like to address these questions?
He cannot fix this HUGE problem with silence.
5.
Very thourough and interesting analysis Mike!
“So we ask are there any other bidders who had the same bidding pattern of Halvarez?”
“We couldn’t find any.”
If there were other shill bidding names on Brady’s script whould you really expect them to be all set to the same parameters as the Halvarez one ?
I would’nt of thought so unless Brady is a total idiot.
*****************************
“There are some domains that appear as they were won by one bidder but went to another domainer.”
Are they the domains using the second whois address in New York or the ones that use Moniker privacy ?
WOW. Great work. Thanks for the analysis. I know that I can get lost in the numbers and tangents on this kind of thing and have to work at maintaining focus.
Thanks for the work Mike.
I personally don’t think Nelson used a script…I think he did everything manual.
I was in contact with him many a time throughout the night and the guy seemed to never sleep (like me) and I know back in the day I could manually process and research thousands of domains so it would be no problem for a guy like him who was always awake.
Also, I believe the fact that he only, or at least mainly, used one bidder name shows that other employees knew about this. NO way can they not know about this Halvarez guy after all those auctions and all the years. Impossible.
Their release could have been one sentence: “I hear-by release Oversee and Snap for any liability arising from an auction involving Halvarez.”
The way they word that release is the single biggest reason for this unraveling and people looking for more of the story, who is involved and if it spills over to other companies. They want folks to sign away their rights since Day one of the Universe before you even know the extent of what might have really happened.. I think anyone that signs that does not have any idea of the far reaching impact it could have. It is absolutely INSANE to sign your rights away BEFORE all the facts are in and even then the release is so bad I think paying every domainer $10,000 whether affected or not would be a coup for them. Sign your LIFE away with this baby. INSANE!
In my book the facts remain the same;
” snapanames / Oversee ” are repsonsible, over 2 years of negligence (people cried wolf) .
Auction ending prices were inflated, domainers lost domains , opportunitties = buisness
The fact that some domain are in Oversee’s name still very fishy fishy.
They had the istorical dat for a few days (either fishy or dumb move by their lawyers it adds to the bad faith, the fact that they offered less than truly owed to some domainers likewise= bad faith)
Snap Oversee profited inmmensly from the fraud/scamm.
I wait for the authorities’ report and whatever will transpire during discovery in any lawsuit…
Nevertheless , thanks MHB.
You’ve got bollocks.
I say take the settlement.
Time-value-of-money is valueable.
Class action settlement could take years and you may only get a small fraction more.
Rick
I have to agree with you 100% on the release issue.
They are basically agreeing to compensate domainers for just one circumstance; for bids placed by one bidder ID Halvarez and limit compensation to just when he was the 2nd high bidder.
Therefore the most Oversee should be asking for is a release for any claims or damages related to Halvarez’s bidding, end of story,
Even with that each domainer would have to determine if they thought they had any additional damages, that would could be awarded by a court, the kind that Robbie talks about in his comments.
Again that is a huge issue in and of itself and not meant to be covered by this post.
But asking for a blanket release against anything and everything, every action or inaction, is way too broad in my opinion.
Moreover the settlement is opened for a year, so there is no rush to give your rights away as we are only into this mess for a week (I know it seems like months).
Posted by MHB
“Even with that each domainer would have to determine if they thought they had any additional damages, that would could be awarded by a court, the kind that Robbie talks about in his comments.”
That is a key issue, there is collateral dmage , whatver path each domainer takes it’s a personal decision, my guess is that the little sardines will be canned into a class auction “they have nothing to lose” the rest will need to fight and decide in thier own.
A friend lawyer told me this is a” Slam Dunk ‘ in court for any attorney, the evidence and negligence are overwhelming.
The largest damage overall IMO is what was done to the Industry (not over yet) , that in dollar and cents it’s in itself “priceless”.
Fab analysis, numbers rarely lie. While I’m not directly involved in any of these auctions, small fry compared to the numbers above, I do have a solution here. Snapnames and Oversee won’t like it, but its the only ‘fair’ one I see… refund ‘halvarez’s top bid for each auction he was involved in, irrespective if he was #3 or #20.
I see the problem this might cause snapnames, specially since its 50k auctions, but its the only way, imho, that they can claim that they didn’t profit from it, nor would like to be seen profiting from it.
Oh and signing away any rights against a repeat of this incidence in the future, as the agreement seems to convey, will give snapnames access to a list of the most stupid domainers on this planet. Unless those signing only do it to take the money and run and leave snapnames forever, which might not be feasible in the long run.
Robbie
The issue is what other damages are assessable by a court.
Oversee is already offered to give the overcharged money back, so you would have to try to get damages on other issues
Compensation for loss of opportunity?
Compensation for loss when Halvarez was the 3rd or 4th bidder?
Compensation for not bidding on an auction because Halvarez already placed a higher bid than you would be willing to pay?
Domains Halvarez won and paid for.
Domains Halvarez won and refunded himself for?
I don’t have the answer.
Don’t forget that attorneys are going to take 40% or more, plus your going to be fighting for years, so you have the time loss of money, and will need a judgment of double the offer just to break even.
So there are lots of considerations and issues.
As I said another post and time for those
“Halvarez” was in hundreds of my auctions, and when it was just the two of us, he never bid against me. A friend of mine had several auctions in which it was just the two of them and “halvarez” bid against him in a few of those auctions. I think your analysis has helped me figure out why. In my auctions, I never placed a proxy bid. If I wanted a name, I waited until the end and then bid – usually one minimum bid at a time. My friend had a proxy bid in place at the beginning of the auctions in which “halvarez” bid against him.
“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.”
What a situation.
I have subscribed to this blog for a long time. It has always been good. It is now beyond great. This analysis is way in advance of anything anyone else is reporting, and highly appreciated.
It seems to me that if people go the class action route then closing Snapnames may be the best protection.
I feel that the Arrington commentary is not entirely justified. It should be said that this is a business that can fall foul of a rogue, just as we have seen in securities and i-banking many times.
But what remains to be seen is if this is broader, if Halvarez was not alone, if other companies are up to the same tricks. If the whole industry is rotten then I guess a former CEO of Pool would know?
Very informative.
However, I wonder how Brady ended up winning some auctions if the Halvarez account was a script programmed to bid, say, 90% of highest proxy.
+ I can’t wait for your next post re: other anomalies.
I don’t know what the problem is. Halvarez always bid against me but I always won. I always win at everything. haha
I think Halvarez has no future in domains, that is for sure.
Damn MHB, awesome analysis!
Had me glued to the screen for the whole post.
John
This is the most detailed analysis of the situation I have seen thus far. Thank you for sharing your findings, Mike.
I have analyzed another account:
Amount of auctions we were involved in 550+-
Number of unique bidder Id’s: 1,580
Amount of auctions we won: 130+-
Amount generated from all the auctions we were involved in: $840,000 +-
First Auction: Apr-2005
Last Auction: Oct-2009
Highest grossing auction (for reference): phonefree.com on: 09-Sep-2005 12:35 PDT for $61,361
Notes:
1. There are more unique bidders per auction (2.9) than in your account (0.75) and the average sale price for a domain (~ $1,500) is higher than in your account (~ $1,100).
2. Bidder ID “halvarez” is insignificant in this sample. He only participated in 9 auctions. He didn’t place any bid and won none. Bidder ID “someone”, the second most active after the account holder, was in 240 of the auctions or around 43%. He won 2. Bidder ID “100001”, the second most active after the account holder, was in 223 of the auctions or around 40%. He won 3. There are several other bidders with similar patterns.
3. A “shill bidder” will care more about participating than about winning. A bidder with such goals should usually have:
a. A high participation ratio.
b. Very low ratio of wins compared to number of auctions entered.
c. Some bidding activity.
All of the above are NOT present for “halvarez” because in this account he did not participate enough. Yet he was a “shill bidder”.
5. The absence of a pattern is not strong enough evidence to dismiss bidder IDs. Showing a pattern is strong enough indication for further examination, which may or may not result in identifying the bidder ID as a “shill bidder”.
6. Any “experienced, independent accounting forensics firm” could find such other Bidder IDs if it has access to the entire auction base.
7. There is one additional data point that can only be examined from outside the bidder account – it is – the auctions in which a bidder was the lone bidder. How many of those did “halvarez” have? at what ratios? How many other bidder IDs display the same pattern?
8. Let’s not jump to conclusions with partial data.
Someone
No one other than Snapnames has all the data.
We have the biggest sample that anyone has come forward with but as said right off the bat we are missing data on 98.8% of the auctions.
We did look at the bidder id’s “someone” and “100001” in our study as well, as they had a high bid rate and low buy rate but looking at each bid placed in each account we could not find the same bidding pattern with Halvarez or many one time bids like he had.
We also looked at about 25 other accounts that had high bids, low wins and a lot of 2nd places.
Nothing conclusive on those.
“””Any “experienced, independent accounting forensics firm” could find such other Bidder IDs if it has access to the entire auction base””
I’m sure they could and we would welcome this but we will have to rely what individual domains see at this point, until or unless the whole database is made available in the future
MHB said: “we could not find the same bidding pattern with Halvarez”.
You are looking for for the wrong thing. Mohamed Atta was airborne. Army Major Nidal Hasan was ground bound. They don’t have the same “levitation pattern” but they have the same “motivational pattern”. Nough said.
It seems to me, that the biggest question of all has been left unanswered. WH Y HAVE NO CHARGES BEEN BROUGHT AGAINST BRADY? Why have we not heard from Jeff Kupietsky? Why have we not heard from Craig Snyder? Who else is involved in this obvious cover-up? Millions of dollars have been lost by domainers, yet no charges have been brought. Oversee spent millions of dollars acquiring Snapnames at a hugely inflated price, yet no charges have been brought. The domain industry is on the brink of possible collapse due to lack of trust, yet no charges have been brought. Who is protecting whom?
A child can see that laws have been broken and fraud has been committed, yet we hear absolutely nothing from the so-called defrauded company, Oversee. What are they hiding? Are they afraid that their own positions and livelihoods are in jeopardy?
It seems mighty strange to me that not one word has been heard from the company other than to send out the most ridiculous Settlement Offers with unbelievable releases that you have to be absolutely financially desperate to sign. The language contained in those releases is legally binding, yet unheard of in legal circles in its breadth of forgiveness and letting everybody off the hook. Again, what are they afraid of? I intend to address a separate post to the language of the releases.
Howard
You make a great point.
I was planning on addressing ridiculous terms of the release tomorrow as well, but take this as you invite to make a guest post.
@Someone
Since you know what domains ‘someone’ and ‘100001’ won and since you seem to be suspicious of them, you must’ve checked the whois info on their won domains?
1. Mike, amazing post!
2. I think this is about damages – I cant believe Oversee had the nerves to call it “rebate”
3. If you win a class action you are going to get 40-50 percent of the amount won – not of the amount you could get from this so called “rebate”
4.Howard – I couldn’t agree more. I hope you will accept Mike’s invitation to make a guest blog.
5. What do you call a person who signs this?
I, the undersigned, individually and jointly, for myself and my successors, assigns, trustees, partners, joint venturers, directors, officers, affiliates, associates, managers, licensees, and for any other claiming through or under each or all of them and for any person or entity with or for whom I may have purchased the above mentioned names (collectively, the “Releasors”) hereby release and forever discharge, acquit, covenant not to sue and acknowledge complete satisfaction from, SnapNames, and its past and present parent companies (including Oversee.net), affiliates, successors, assigns, agents, attorneys, servants, representatives, employees, independent contractors, trustees, administrators, predecessors-in-interest, insurers, partners, joint venturers, stockholders, members, directors, officers, parent companies, associated companies, holding companies, subsidiaries, divisions, affiliates, associates, managers, licensees, accountants and consultants of any of the foregoing (collectively, the “Releasees”) for any and all claims, actions, arbitrations, charges, complaints, grievances, hearings, causes of action, actions, suits, damages, costs, expenses, judgments, liabilities, demands, inquiries, investigations, proceedings or suits of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, previously existing, or now existing, or hereafter arising, in law or in equity (collectively, the “Claims”), which the Releasors or any of them had, may have had, or now has, from the beginning of time to today’s date 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, including without limitation, any Claims relating in whole or in part to the bidding activity of the SnapNames user associated with the user name “halvarez” (the “Released Matters”) for damages, restitution, disgorgement, unjust enrichment, civil penalties, statutory penalties, injunctive and/or declaratory relief, whether class, individual, representative, or otherwise in nature, including costs, expenses, penalties, and attorneys fees.
Tony
The name I saw come up on “someone” was Richard Meyer.
According to my records that bidder placed bids on 140 auctions, and only won 4.
He finished in second place only 17 times and the largest second place bid was less than $500.
100001 bid only in 61 auctions, won 19 of them and finished 2nd 11 times but once again none of his 2nd palace bids were more than $250.
Neither one is problematic.
WOW, amazing research! Good job!
Thanks, Mike. The lone shill bidder theory is the most likely to me also.
I want my rebate money ASAP. I believe Oversee is as much a victim if not more than any domainer that’s been involved. A bird in the hand is worth 2 in the bush 5 yrs from now. I want to reinvest that rebate money whilst people are still stung by this. It’s strictly business.
“The name I saw come up on “someone” was Richard Meyer.”
As most people know, I use to be very active on Snapnames.
However, I was frugal in the amount I was willing to bid.
When the big boys started bidding, I got out of the way.
I did not hide behind a fictitious screen name.
My bid name was clearly connected to me.
Plus, I probably won a thousand domains on Snapnames.
Tony said:
1. ” The lone shill bidder theory is the most likely to me also.”
2. “I want my rebate money ASAP.”
1 and 2 are closely related. Just like “perception” and “deception”.
And, I am not “someone”.
He is a well-known domainer (we both know) that went for traffic domains.
Tony said: “Since you know what domains ’someone’ and ‘100001′ won and since you seem to be suspicious of them, you must’ve checked the whois info on their won domains?”
That is irrelevant.
The number of bidder IDs is probably in the hundreds of thousands. There should be thousands with a suspect pattern to examine.
An “experienced, independent accounting forensics firm” would have gone with a top down methodology. They would have examined Whois among other things.
Pointing on a single bidder ID and trying to close the books with a fast rebate for his actions does not show any intention to do any real forensic work.
I think only refunding when Brady was the second winning bidder is a joke, and people should not accept that settlement.
Take this situation for example:
Bidder A: $5,000 w/ $12k proxy.
Brady: $11k (pushes Bidder A to $11,250)
Bidder B: $11,500 (pushes Bidder A to $11,750)
Bidder A wins at $11,750
In that case, Brady was clearly responsible for $6k of that $11,750 and that’s what your refund should be, NOT $0. Sure, we don’t know if Bidder B would have driven it up that high even if Brady wasn’t involved, but given the auction mentality, seeing two other bidders at that price point gives Bidder B confidence that it is a good investment.
Oversee needs to at least offer some compensation for this scenario. Sometimes nobody else would have gotten involved, and sometimes they would have driven it that high anyway. Maybe refunding 50% of the $6k in the example above would be a reasonable solution for both parties. I definitely don’t think ignoring that scenario is fair.
I had several phone conversations over a few years with Brady specifically about my concerns and skepticism about Halvarez. He assured me that Halveraez was a real and legit snap customer. I sent him a few E-mails about Halvarez too. In one E-mail I simply pointed out that Halverez was back in bidding action after being MIA for 2 or 3 months. Here is Nelson’s response: —– “I had not seen. Just today or earlier? Did he step on your toes yet?” — This deception by somebody that I trusted and talked to and E-mailed frequently irks me at least just as much as monetary issues.
It actually makes a lot of sense now…especially because on many of my backorders that were entered 1, 2 and 3 minutes before the daily cutoff time on the drop date…. Halvarez was ALWAYS the second bidder …behind me time-wise. Only an insider or a uber-hacker could do that type of “timing” !!!
>>WHY HAVE NO CHARGES BEEN BROUGHT AGAINST BRADY?<<
Well, for starters, have you notified the authorities yet?
Oversea is not going to be calling the FBI in…it's up to those affected.
How many here have notified the proper authorities?
>>WHY HAVE NO CHARGES BEEN BROUGHT AGAINST BRADY?<<
Have you notified the authorities yet yourself?
Oversea is not going to be bringing the FBI in so those affected need to make the calls.
Has anyone done so yet?
After reading all of that info and sinking in, I have a bit of a headache… But thanks for this detailed post, Mike. Good job for staying on top of things! We appreciate it.
Michael
I agree that something should be done for the bidder effected by Brady’s bidding even if he was not the second bidder.
You example is basically the auction for clash.com which I sited in the post.
Although I was not actively bidding in this auction (therefore I have no monetary interest in that domain auction) its clear Halvarez bumped up the bidding from $22,500 to $27,500.
Would the auction still have gone to $30K without his bid?
Who knows
Clearly he contributed to increased bidding levels on this domain and many others and some compensation should be offered
NetJohn,
Seems more and more like Nelson Brady was one SICK twisted bastard.
I hope the doors are locked at Oversee.
Seriously. Seems like Brady has everything to loose and nothing to gain at this point.
Michael, Thanks for the outstanding analysis and for making it so public. In the big picture, the entire domain industry is truly the biggest victim of this fraud. The 2nd biggest victim, unless there is evidence to implicate them directly, is Oversee.net. I believe that they are trying to handle this in the best and fairest way possible. I have been in plenty of other online auctions where I would never be able to track whether or not similar bid fraud had occurred. I will wait to hear comments about the agreement, as signing it does give me pause. My damages are relatively light ($2600 plus interest), so taking the money makes the most sense for me.
“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.”
Amen to that. I really don’t hate them, but they all cost me many times what halverez cost me. Most of the good domains I did get at Snap were won against at least one of those 4, mostly Frank. I really had to pay to outbid my friend Frank :>)
Most of the time, if I saw that any 2 of the big 4 were in an auction, I just gave up after an initial proxy bid. I called those auctions “Clash of the Titans”
I reviewed all of my auctions, and the forensic accountant got all of mine right. The amazing thing is that halverez stopped bidding against me after 2005. I became less active in Snap auctions, but the last date he screwed me was 12/17/05. I did much more business with Snapnames before they went to auctions. Ah, those truly were the good old days.
Posted by howard Neu :
“It seems to me, that the biggest question of all has been left unanswered. WH Y HAVE NO CHARGES BEEN BROUGHT AGAINST BRADY? Why have we not heard from Jeff Kupietsky? Why have we not heard from Craig Snyder? Who else is involved in this obvious cover-up?”
1)We don’t truly know if charges have been brought up against Nelson aka ” Hanky Pank Alvarez” or not..do we?
2) We haven’t heard from Jeff K/Craig S… because the law firm says so…or because they haven’t been cleared of any wrong doing..
IMO they picked a lemon as far as Law firms is concerned, they have mishandled this from day one
1) No History posted till the Domainer’s Cry became to loud , yet they *Rust* had it at hand
2) shorting domainers of what was honestly due to them at least in my case and a few others that I know of .
3)Nobody at the firm thouguht about the domainers’ claim on domains won by Hanky Panky Alvarez…what to do with them?
3)”Who else is involved in this obvious….?”
Patience surpasses knowledge
“I believe that they are trying to handle this in the best and fairest way possible.”
Howard, yes, Oversee is trying to handle this but not so much Snapnames.
Let’s treat Oversee different than Snapnames here.
Oversee is the victim. Snapnames is the problem.
Why won’t Craig Snyder tell us why iReit bought domains from Brady for the three years that he was CEO there?
Maybe Oversee needs to clean up Snapnames and Craig Snyder is needs to go?
Rob
i have great respect for your opinions. However – Let’s treat Oversee different than Snapnames here. – I just don’t buy. Who is offering the Settlement? OVERSEE. Who is requiring that everyone now or forever associated in any way with them be released by everyone accepting the Settlement? OVERSEE. Why are they being so generous and not going after the alleged culprit or culprits? Sorry, but I don’t see OVERSEE as a victim here. Their actions admit liability.
Bull Crap.
Oversee profited for over 2 years, they own this goose, they have responsabilties, they have a compliance department, they audited and saw no problems , yet they were told point blank by scores of domainers for 2 years or longer…
You don’t collect millions i nprofits and suddenly cry “I am the victim” pleeeeease! muah muha
aside with haven’t heard the rest of the story…have we?
The lawsuits are and will be against Fat wallet Oversee…
Their Greeed blinded them.
Time to face the music.
Howard H
“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.” “Amen to that. I really don’t hate them”
I really don’t hate them either, just trying to add a little light to a dark subject.
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?