kickbacks alleged in suit

[Thoroughbred Fan]

I've got an interesting auction story. A friend of mine, who's father is in the breeding side of the business, wanted to buy a yearling. He wanted something by a freshman sire who he thought would run well at a low cost.

So, he heads up to the auction with his personal trainer acting as agent and finds a very nice filly. Turns out the one the agent/trainer likes was bred by his father. She was consigned through a independent party. Good news for my friend since he can just call and ask if she has had any problems. He does, she hasn't and he bids. He lands her for X dollars. The next day his agent/trainer gets a call from the consignor saying he has someone who'll give 2X dollars for her. Needless to say where was this mystery buyer the day before. My friend tells his father and needless to say the consignor won't be getting anymore business from my friend's father.

These and other shady things happen at sales, especially if one slips through the cracks at a low price. I even know of consignors who have purchased from their own consignment through a third agent if the price was right.

[Rupert Pupkin]

Originally Posted by Thoroughbred Fan

I've got an interesting auction story. A friend of mine, who's father is in the breeding side of the business, wanted to buy a yearling. He wanted something by a freshman sire who he thought would run well at a low cost.

So, he heads up to the auction with his personal trainer acting as agent and finds a very nice filly. Turns out the one the agent/trainer likes was bred by his father. She was consigned through a independent party. Good news for my friend since he can just call and ask if she has had any problems. He does, she hasn't and he bids. He lands her for X dollars. The next day his agent/trainer gets a call from the consignor saying he has someone who'll give 2X dollars for her. Needless to say where was this mystery buyer the day before. My friend tells his father and needless to say the consignor won't be getting anymore business from my friend's father.

These and other shady things happen at sales, especially if one slips through the cracks at a low price. I even know of consignors who have purchased from their own consignment through a third agent if the price was right.

I don't get it. Why would your friend's father be mad at the consignor? The consignor offers him double what he paid for the horse and your friend's father gets mad? I don't get it. What am I missing. there is nothing sinister here. I don't see what the problem is. This type of thing happens all the time, even in real estate. It's not uncommon in real estate for someone to buy a property for $1 million and then get offered $1.1 million a week later.

Originally Posted by Rupert Pupkin

I don't get it. Why would your friend's father be mad at the consignor? The consignor offers him double what he paid for the horse and your friend's father gets mad? I don't get it. I don't see anything sinister here. I don't see what the problem is. This type of thing happens all the time, even in real estate. It's not uncommon in real estate for someone to buy a property for $1 million and then get offered $1.1 million a week later.

Rupert I had to reread that post 4 times to try and understand the problem!!!
What the hell is the matter with that? They should have fallen to their knees and thanked the guy for doubling their money in one day.
I don't see a thing wrong with that on either side.
Many times a guy will have a client who says I like horse number "123" in the book, what do you think he will go for? Agent says, that one oughta go for about 400 grand. Guys says thats too much for me. So they don't even bother trying to bid.
The sales results come out the next day and number "123" sold for 180 grand. Client says geez, I woulda gone to 250 on him. So they call the buyer and often times the horse is flipped on the spot.
Everyone should be so lucky!!!

[Rupert Pupkin]

Originally Posted by oracle80

Rupert I had to reread that post 4 times to try and understand the problem!!!
What the hell is the matter with that? They should have fallen to their knees and thanked the guy for doubling their money in one day.
I don't see a thing wrong with that on either side.
Many times a guy will have a client who says I like horse number "123" in the book, what do you think he will go for? Agent says, that one oughta go for about 400 grand. Guys says thats too much for me. So they don't even bother trying to bid.
The sales results come out the next day and number "123" sold for 180 grand. Client says geez, I woulda gone to 250 on him. So they call the buyer and often times the horse is flipped on the spot.
Everyone should be so lucky!!!

That is exactly right.

[SentToStud]

Originally Posted by Rupert Pupkin

I don't get it. Why would your friend's father be mad at the consignor? The consignor offers him double what he paid for the horse and your friend's father gets mad? I don't get it. What am I missing. there is nothing sinister here. I don't see what the problem is. This type of thing happens all the time, even in real estate. It's not uncommon in real estate for someone to buy a property for $1 million and then get offered $1.1 million a week later.

The way I read it is the father's deal got pushed off the table by the consignor when the bigger money showed up.

Could be wrong, but that's how I read it.

Originally Posted by SentToStud

The way I read it is the father's deal got pushed off the table by the consignor when the bigger money showed up.

Could be wrong, but that's how I read it.

Stud he can't do that. No way. Once the horse is sold at auction its the property of the buyer. Doesn't matter if they show up with a boatload of money the next day. If that consignor actaully did that he could be sued and see no way that he could win the lawsuit.

I might add that the reason people use agents in private sales and buys is time. Most owners don't have the time or the know how to watch a zillion races a day, nor do they want to. They figure if they hire someone to do it, that its worth a small percent.
By the same token agenst are often used to sell horses, especially brrodmare and sire prospects. Owners simply have too many other things going on in their lives to do that. it involves making a lot of phone calls and contracts and haggling, etc. So they just tell someone how much they want for a horse and let them do what they consider to be nuisance work for a percentage.

[Cannon Shell]

The biggest problem with horse auctions lies with the autions themselves. The fact is that you do not even have to be registered to bid on a horse nor does the sales company even keep track of the bids outside of the final one. As a matter of fact the bid spotting process often leads to phantom bids being accepted such as a case where two bid spotters call out the same bidder. But in an unregulated forum that the auctions are cheating and fraud are unusually easy to accomplish.
I think its important to understand that very rarely are all bids live. Most of the time a consignor will assign a Reserve price and then have an agent bid the horse up to right below the price. So the unknowing bidder is actually not bidding against a live buyer, he is said to be bidding against the reserve. Being that you dont know what the reserve is beforehand sometimes the consignors agent will play a little russian roulette by continuing to bid past the reserve, known as running the bid up. This is a fact of life in the auction game like it or not. Often the sale is a bogus one such as when Scipion was sold at Saratoga a few years ago. Bred by Mrs. Payson, he was purchased by P. Biancone, agent. He ran and continues to run as the property of Mrs. Payson. There was no actual sale but he was showcased in the Bloodhorse as the sales topper.

All of these things and the other little issue raised by mattress mac could be eliminated if the sales companies would sell horses like art is sold, numbered, registered bidders. the bids could be tracked and recorded so when there is a problem like this there would be a record of who bid on who. Considering the fact that a billion dollar business is so unregulated it is shocking hat it has taken so long for cases like these to be unearthed. Also all agents that are given bidding privilidges should be licensed and subject to loss of license if found guilty of fraud.

But, alas it wont happen because that would decrease the price of horses therefore decreasing the profitability of those in charge of this sport, the breeders, consignors, and sales companies along with several powerful agents and trainers.

Funny thing about this business is that all the things that would make the sport (racing) healthier like dropping averages at the sales are thought to be horrific to the Lexington and Ocala crowd who really are the profiteers in this industry. Like Joel said if prices keep going up and expenses keep going up and scandals (sales and drugs) keep popping up and purses are stagnant, then how long until the bottom drops out?? Despite the press we could all get along very well without The Arabs, Coolmore and Storm Cat.

Originally Posted by Cannon Shell

The biggest problem with horse auctions lies with the autions themselves. The fact is that you do not even have to be registered to bid on a horse nor does the sales company even keep track of the bids outside of the final one. As a matter of fact the bid spotting process often leads to phantom bids being accepted such as a case where two bid spotters call out the same bidder. But in an unregulated forum that the auctions are cheating and fraud are unusually easy to accomplish.
I think its important to understand that very rarely are all bids live. Most of the time a consignor will assign a Reserve price and then have an agent bid the horse up to right below the price. So the unknowing bidder is actually not bidding against a live buyer, he is said to be bidding against the reserve. Being that you dont know what the reserve is beforehand sometimes the consignors agent will play a little russian roulette by continuing to bid past the reserve, known as running the bid up. This is a fact of life in the auction game like it or not. Often the sale is a bogus one such as when Scipion was sold at Saratoga a few years ago. Bred by Mrs. Payson, he was purchased by P. Biancone, agent. He ran and continues to run as the property of Mrs. Payson. There was no actual sale but he was showcased in the Bloodhorse as the sales topper.

All of these things and the other little issue raised by mattress mac could be eliminated if the sales companies would sell horses like art is sold, numbered, registered bidders. the bids could be tracked and recorded so when there is a problem like this there would be a record of who bid on who. Considering the fact that a billion dollar business is so unregulated it is shocking hat it has taken so long for cases like these to be unearthed. Also all agents that are given bidding privilidges should be licensed and subject to loss of license if found guilty of fraud.

But, alas it wont happen because that would decrease the price of horses therefore decreasing the profitability of those in charge of this sport, the breeders, consignors, and sales companies along with several powerful agents and trainers.

Funny thing about this business is that all the things that would make the sport (racing) healthier like dropping averages at the sales are thought to be horrific to the Lexington and Ocala crowd who really are the profiteers in this industry. Like Joel said if prices keep going up and expenses keep going up and scandals (sales and drugs) keep popping up and purses are stagnant, then how long until the bottom drops out?? Despite the press we could all get along very well without The Arabs, Coolmore and Storm Cat.

I get so excited at dreaming about that that I have to take a drink just to calm down.
Having the yearling market become more realistic would mean having more middle and lower levl players buying yearlings who have a shot to make it.
That would mean more horses who debut or run well early who could be bought privately at more reasonable prices.
If that ever happens agenst who buy privately off the racetrack will have a much better shot to make a great living just like the "pedigree" experts who make a ton at the sales telling people to go to 800 grand on a horse who won't ever make a quarter.
What a beautiful world it would be!!!

Originally Posted by Cannon Shell

The biggest problem with horse auctions lies with the autions themselves. The fact is that you do not even have to be registered to bid on a horse nor does the sales company even keep track of the bids outside of the final one. As a matter of fact the bid spotting process often leads to phantom bids being accepted such as a case where two bid spotters call out the same bidder. But in an unregulated forum that the auctions are cheating and fraud are unusually easy to accomplish.
I think its important to understand that very rarely are all bids live. Most of the time a consignor will assign a Reserve price and then have an agent bid the horse up to right below the price. So the unknowing bidder is actually not bidding against a live buyer, he is said to be bidding against the reserve. Being that you dont know what the reserve is beforehand sometimes the consignors agent will play a little russian roulette by continuing to bid past the reserve, known as running the bid up. This is a fact of life in the auction game like it or not. Often the sale is a bogus one such as when Scipion was sold at Saratoga a few years ago. Bred by Mrs. Payson, he was purchased by P. Biancone, agent. He ran and continues to run as the property of Mrs. Payson. There was no actual sale but he was showcased in the Bloodhorse as the sales topper.

All of these things and the other little issue raised by mattress mac could be eliminated if the sales companies would sell horses like art is sold, numbered, registered bidders. the bids could be tracked and recorded so when there is a problem like this there would be a record of who bid on who. Considering the fact that a billion dollar business is so unregulated it is shocking hat it has taken so long for cases like these to be unearthed. Also all agents that are given bidding privilidges should be licensed and subject to loss of license if found guilty of fraud.

But, alas it wont happen because that would decrease the price of horses therefore decreasing the profitability of those in charge of this sport, the breeders, consignors, and sales companies along with several powerful agents and trainers.

Funny thing about this business is that all the things that would make the sport (racing) healthier like dropping averages at the sales are thought to be horrific to the Lexington and Ocala crowd who really are the profiteers in this industry. Like Joel said if prices keep going up and expenses keep going up and scandals (sales and drugs) keep popping up and purses are stagnant, then how long until the bottom drops out?? Despite the press we could all get along very well without The Arabs, Coolmore and Storm Cat.

I agree with the part that the Sales Companies are not very interested in catching these people because they are profiting too when prices soar beyond the actual worth of a horse(s) - Thus, why should the sales company mandate a task force that would hurt their revenues in the short term and piss off some of their better clients (the crooked trainers and agents)?

Sales Companies need to understand that our market would be healthier in the LONG TERM if we rid the industry of this type of behavior because more new clients would enter the game and there would be more cash at the sales, which would in-turn be more profitbale for the Sales Companies....but nobody looks at the long term in this business....that is also a big downfall of this industry IMO.....

[Rupert Pupkin]

Originally Posted by Cannon Shell

The biggest problem with horse auctions lies with the autions themselves. The fact is that you do not even have to be registered to bid on a horse nor does the sales company even keep track of the bids outside of the final one. As a matter of fact the bid spotting process often leads to phantom bids being accepted such as a case where two bid spotters call out the same bidder. But in an unregulated forum that the auctions are cheating and fraud are unusually easy to accomplish.
I think its important to understand that very rarely are all bids live. Most of the time a consignor will assign a Reserve price and then have an agent bid the horse up to right below the price. So the unknowing bidder is actually not bidding against a live buyer, he is said to be bidding against the reserve. Being that you dont know what the reserve is beforehand sometimes the consignors agent will play a little russian roulette by continuing to bid past the reserve, known as running the bid up. This is a fact of life in the auction game like it or not. Often the sale is a bogus one such as when Scipion was sold at Saratoga a few years ago. Bred by Mrs. Payson, he was purchased by P. Biancone, agent. He ran and continues to run as the property of Mrs. Payson. There was no actual sale but he was showcased in the Bloodhorse as the sales topper.

All of these things and the other little issue raised by mattress mac could be eliminated if the sales companies would sell horses like art is sold, numbered, registered bidders. the bids could be tracked and recorded so when there is a problem like this there would be a record of who bid on who. Considering the fact that a billion dollar business is so unregulated it is shocking hat it has taken so long for cases like these to be unearthed. Also all agents that are given bidding privilidges should be licensed and subject to loss of license if found guilty of fraud.

But, alas it wont happen because that would decrease the price of horses therefore decreasing the profitability of those in charge of this sport, the breeders, consignors, and sales companies along with several powerful agents and trainers.

Funny thing about this business is that all the things that would make the sport (racing) healthier like dropping averages at the sales are thought to be horrific to the Lexington and Ocala crowd who really are the profiteers in this industry. Like Joel said if prices keep going up and expenses keep going up and scandals (sales and drugs) keep popping up and purses are stagnant, then how long until the bottom drops out?? Despite the press we could all get along very well without The Arabs, Coolmore and Storm Cat.

If you are a seller and you put a reserve on a horse, you don't need to bid. The sales company will actually bid against buyers until the reserve is met. So if you are a buyer and you are bidding, sometimes you aren't even bidding against anyone. You are just bidding against the sales company, but you won't know it at the time. They are bidding against you and you think you are bidding aginst another buyer but you are not.

This isn't a secret. That's what a reserve is. If a seller tells the sales company to put a $300,000 reserve on a horse, the sales company is not allowed to sell the horse for less than $300,000. So if someone bids $200,000 and there are no other bids, the sales company has to bid $210,000. If the buyer then bids $220,000, then the sales company has to bid $230,000. They have to do this until the $300,000 reserve is met. If the sales company bids $230,000 and that is the final bid, then the horse will be listed in the results as $230,000 RNA. RNA means "reserve not attained". In a case like that, if you are a buyer you can go to the consignor after the sale and ask him how much he wants for the horse. We have bought a lot of horses like this. If we suspect that we are bidding aginst the sales company, we would stop bidding immediately and try to buy the horse after the sale.

[sumitas]

Originally Posted by Cannon Shell

The biggest problem with horse auctions lies with the autions themselves. The fact is that you do not even have to be registered to bid on a horse nor does the sales company even keep track of the bids outside of the final one. As a matter of fact the bid spotting process often leads to phantom bids being accepted such as a case where two bid spotters call out the same bidder. But in an unregulated forum that the auctions are cheating and fraud are unusually easy to accomplish.
I think its important to understand that very rarely are all bids live. Most of the time a consignor will assign a Reserve price and then have an agent bid the horse up to right below the price. So the unknowing bidder is actually not bidding against a live buyer, he is said to be bidding against the reserve. Being that you dont know what the reserve is beforehand sometimes the consignors agent will play a little russian roulette by continuing to bid past the reserve, known as running the bid up. This is a fact of life in the auction game like it or not. Often the sale is a bogus one such as when Scipion was sold at Saratoga a few years ago. Bred by Mrs. Payson, he was purchased by P. Biancone, agent. He ran and continues to run as the property of Mrs. Payson. There was no actual sale but he was showcased in the Bloodhorse as the sales topper.

All of these things and the other little issue raised by mattress mac could be eliminated if the sales companies would sell horses like art is sold, numbered, registered bidders. the bids could be tracked and recorded so when there is a problem like this there would be a record of who bid on who. Considering the fact that a billion dollar business is so unregulated it is shocking hat it has taken so long for cases like these to be unearthed. Also all agents that are given bidding privilidges should be licensed and subject to loss of license if found guilty of fraud.

But, alas it wont happen because that would decrease the price of horses therefore decreasing the profitability of those in charge of this sport, the breeders, consignors, and sales companies along with several powerful agents and trainers.

Funny thing about this business is that all the things that would make the sport (racing) healthier like dropping averages at the sales are thought to be horrific to the Lexington and Ocala crowd who really are the profiteers in this industry. Like Joel said if prices keep going up and expenses keep going up and scandals (sales and drugs) keep popping up and purses are stagnant, then how long until the bottom drops out?? Despite the press we could all get along very well without The Arabs, Coolmore and Storm Cat.

good post and it rings with me. the sport needs a lot more regulation to make it legitimate. and i agree, Coolmore, the sheiks, they don't make the sport. the sport makes them.

[Sightseek]

Originally Posted by Cannon Shell

The biggest problem with horse auctions lies with the autions themselves. The fact is that you do not even have to be registered to bid on a horse nor does the sales company even keep track of the bids outside of the final one. As a matter of fact the bid spotting process often leads to phantom bids being accepted such as a case where two bid spotters call out the same bidder. But in an unregulated forum that the auctions are cheating and fraud are unusually easy to accomplish.
I think its important to understand that very rarely are all bids live. Most of the time a consignor will assign a Reserve price and then have an agent bid the horse up to right below the price. So the unknowing bidder is actually not bidding against a live buyer, he is said to be bidding against the reserve. Being that you dont know what the reserve is beforehand sometimes the consignors agent will play a little russian roulette by continuing to bid past the reserve, known as running the bid up. This is a fact of life in the auction game like it or not. Often the sale is a bogus one such as when Scipion was sold at Saratoga a few years ago. Bred by Mrs. Payson, he was purchased by P. Biancone, agent. He ran and continues to run as the property of Mrs. Payson. There was no actual sale but he was showcased in the Bloodhorse as the sales topper.

All of these things and the other little issue raised by mattress mac could be eliminated if the sales companies would sell horses like art is sold, numbered, registered bidders. the bids could be tracked and recorded so when there is a problem like this there would be a record of who bid on who. Considering the fact that a billion dollar business is so unregulated it is shocking hat it has taken so long for cases like these to be unearthed. Also all agents that are given bidding privilidges should be licensed and subject to loss of license if found guilty of fraud.

But, alas it wont happen because that would decrease the price of horses therefore decreasing the profitability of those in charge of this sport, the breeders, consignors, and sales companies along with several powerful agents and trainers.

Funny thing about this business is that all the things that would make the sport (racing) healthier like dropping averages at the sales are thought to be horrific to the Lexington and Ocala crowd who really are the profiteers in this industry. Like Joel said if prices keep going up and expenses keep going up and scandals (sales and drugs) keep popping up and purses are stagnant, then how long until the bottom drops out?? Despite the press we could all get along very well without The Arabs, Coolmore and Storm Cat.

Excellent ideas.

I'm not sure if this is correct, but buying at auction is the only practice where 'insider trading' is allowable and everyone deep in the game is 'in the know'...I think the approach taken for selling art could indeed stop it.

[Rupert Pupkin]

Originally Posted by SentToStud

The way I read it is the father's deal got pushed off the table by the consignor when the bigger money showed up.

Could be wrong, but that's how I read it.

No. He said that his friend's father bought the horse in the auction ring. Then the next day, the consignor offered the guy double for the horse. Once you buy a horse at auction, the consignor can't back out of the deal even if he is offered 10x more for the horse. The only thing he could do is ask you if you want to sell the horse back to him or to another buyer.

[Revolution]

it is amazing that people are so shocked by this type of thing. all of the top people in this business cheat and lie. drugs are rampant too. horse racing is no different than baseball, cycling, track & field, football, etc. cheating and lying are in every sport where there is money. it is amazing people think these businesses are honest. if you don't cheat in some way, you will never get to the top. some honest guys have the occasional horse, but the guys consistently at the top are the best cheaters.

[SentToStud]

o80, rupert, c-ham... thanks for the insights. Most of my assumptions were wrong. Goes to show to do business only with people you trust and then do so carefully. TY again.

Originally Posted by SentToStud

o80, rupert, c-ham... thanks for the insights. Most of my assumptions were wrong. Goes to show to do business only with people you trust and then do so carefully. TY again.

Stud,
Lansdon is my best buddy so I don't really work for him anymore, its more like him asking me what i think about something and me being glad to do it for him.

If you are lucky you work with good people. Sanford Robbins is one of my clients and he is about the most honorable human being you could ever hope to meet. Guy does business on a handshake and his word is as good as gold.
If you are lucky you have good folks like that to work for. I couldn't tell you how pleased I was that the first grade one winner I bought was for him(he later sold some of her to IEAH, and they are great folks as well).
You don't wanna hurt people like that, you wanna do good for them. And always remember this, if you don't do any good they don't keep you around. Its the same as any other business, you don't get it done, you are done.

Originally Posted by Revolution

it is amazing that people are so shocked by this type of thing. all of the top people in this business cheat and lie. drugs are rampant too. horse racing is no different than baseball, cycling, track & field, football, etc. cheating and lying are in every sport where there is money. it is amazing people think these businesses are honest. if you don't cheat in some way, you will never get to the top. some honest guys have the occasional horse, but the guys consistently at the top are the best cheaters.

Explain to me how George Steinbrenner gets cheated out of his cash in the major leagues.....Unless Cashman is embezzling from him then he doesn't....the bottomline here is that its the financial supporters of this game who are being cheated.....not just people "cheating" in general....

If Cashman embezzled money from the Yankees he could be booked for it and face jail time, yet when an agents basicaly steals $95,000 from a horse owner he works for - he just gets suied over it.....