PCGS disavows grade at Heritage auction!!!!!!!

[truthteller]

I read this on the PCGS forum, so I take it with a grain of salt, but a forum member who spoke to an auction antendee stated that just before the 1963 1C PCGS70DCAM went up for sale, the auctioneer stated to floor bidders that PCGS had disavowed the grade!!!!!!!!!!! How can PCGS do such a thing? Is PCGS going to cough up the money to buy the coin or what? I tell you, this is BAD news for PCGS if there is no compensation. Doesn't this open up a can of legal worms!!!!!!!!!!!

 

 

TRUTH

[Tradedollarnut]

This is total conjecture on my part, but here is my guess:

 

PCGS probably wants to deal directly with the current owner, who was purported to state that he had knowingly 'bought the holder, so what?'. By disavowing the grade on an obvious non PF70, PCGS limits its liability to the value of a PF70 at the time the current owner bought the coin.

 

Seems as if acknowledging that the Emperor has no clothes is the prudent thing to do for all involved except the current owner.......

[jtryka]

Wow! This is a stunning development! I have never heard of such a thing before. As for whether it's a smart move, tactically maybe, but strategically no. How much brand equity is destroyed when the entire market now knows that PCGS will just "disavow" a grade whenever they see fit?

[Tradedollarnut]

From across the street:

 

The 1963 PR 70 Lincoln cent in the Heritage auction was purchased by PCGS. We purchased the coin to take it off the market since it had "turned" in the holder and was no longer PR70. The transaction was handled in such a way the nobody (other than PCGS) will lose any money on the deal.

 

Not sure what we'll do with the coin. Maybe we'll put it in the Long Beach World Series of Grading test...though I don't think a spotted PR64 Lincoln proof is a good coin for the test.

 

Maybe we'll hang it on the grading room or sealing room wall to remind the staff to be careful about handling copper. This is not the first big hit we've taken on a copper coin. In 1989 we bought back a PR69 Indian cent for $50,000 that had "grown" an enormous spot covering the entire face. We put it in a holder labeled "The $50,000 spot" and hung it on the grading room wall for awhile.

 

[Leothelion]

You'd think they'd need to have that in writing and on public display. Otherwise, it's word of mouth and that doesn't hold water.

That's the problem when businesses make too much money, they forget about the little guy and treat them like crapp! Pay them off when and if they (can afford to) make a stink about it.

 

Leo

[IrishMike]

Kingofthejungle I am not sure what you just said. David Hall did the right thing, he purchased the coin at the first opportunity it came up for sale. I saw the coin last year and it was obvious that it had turned in the holder. By disavowing the coin they also put all registry participants on notice that it was not going to be allowed into a registry set. That made the coin worth about fifteen dollars.

 

 

 

 

 

 

[Fairlaneman]

Poo Poo # 1 by King of the Jungle.....

 

Edit to Add:

 

Almost the Truthteller gets a 1/2 Poo Poo.... seems how it seems like he thinks nothing is viable on the PCGS Forum. Damn its quoted alot here though.

[mark]

I think it's 100% clear that HRH did the right thing. Contrary to what was suggested (perhaps not too seriously?) PCGS didn't do anything like make a bunch more PR70DCAMs in order to drive down the market price of the (obscene) one they needed to buy back. Nor did PCGS assert that the market value was much less than the auction price because of "auction frenzy." In this case, PCGS seems to have just stepped up to the plate and removed the coin from the market. I don't see how anyone can fault PCGS's and HRH's decision...but I am sure that some posters will see something I perhaps didn't envision...

 

Mark

[dakra]

Poo Poo #2:

PCGS Finally did the right thing. The question remains, could they? did they? do anything to stop the controvery before it started? or did they wait until they were forced to do something about it.

 

Atleast the story has a happy ending.

 

-Dave

[goose3]

it's funny they "do the right thing" on a 35,000.00 piece of plastic but haven't (at least to our knowledge) done the right thing with the boys at Jade over a 3500.00 pedigree.

 

which one do you think has actually hurt their rep more?

[truthteller]

As long as PCGS buys the coin for an agreed upon price and the seller is fairly compensated, then I have no problem with the situation. I do find it odd that PCGS would publicly announce this in an auction rather than contacting the individual who owned the coin. Imagine all the coins that will become 'disavowed' when coming up for sale in the future. That might be 1/3 of modern graded coins.

 

 

 

TRUTH

[jom]

Exactly how does a coin that has existed for 40 years all of a sudden "turn" in the holder?

 

jom

[Oldtrader3]

I have a MS65RD, PCGS 1931-S Cent that has turned RB (from fully RD) during the (4) years that I have owned the coin. The coin has been stored in a NGC plastic box with a lid in a heated gun safe for almost all the time that I have owned it. Color change does happen with copper! This is a $200 problem, not a $20,000 problem, but a problem none the less.

 

What I do not know is, any history of the coin prior to purchase. I purchased it from a reputable dealer that I have bought many coins from. I am certain that they did not tinker with it. Other PCGS/NGC, MS--RD Cents (in the same storage box) that I have bought from this dealer are fine.

[Fairlaneman]

It is sort of hard for me to believe that the owner of the lincoln, Heritage and PCGS did not get together on this announcment and come to a deal beforehand. Maybe not.

 

Goose. Would the way the two different coins were handled publicly have anything to do with one getting taken care of and the other not taken care of ? A thought. Tact beats name calling I think.

 

Come on Guys you are letting me down. Not enough Poo Poo's here at all. Lets get with it and make this thread worth quoting across the street.

[dakra]

Goose,

I'm still hoping they get compensated. I wonder if it will take a controversy such as the Heritage auction to get resolution.

 

-Dave

[TonerGuy]

I think David and PCGS certainly did do the right thing. Whether they were forced to do it or whether it was solely altruistic is immaterial. They bought the coin back. How they did it, it could be looked upon as good and bad, but the bottom line is that the coin is off the market. I commend them for this!

 

Michael

[sanmary]

Rarely will I write this, but I agree that HRH did do the right thing in getting this coin off of the market...assuming he is not setting a precedence for the future. Also, please buy ALMOST RED coins in the future......you'll pay less and win more in the long run!

[BushMan]

What did you think he was going to do? Ignore the coin and continue to take the verbal battering they have received over the past few years? Not hardly. The coin was a continuing embarrassment to PCGS. The coin was the topic of discussion on the internet, on various boards, virtually every month. The coin wasn't a 70 when it was holdered and it's pure junk now. I've heard the dealer that originally placed the coin may have been very influencial in getting PCGS to step up to the plate.

[Leothelion]

Poo Poo # 1 by King of the Jungle.....

 

Edit to Add:

 

Almost the Truthteller gets a 1/2 Poo Poo.... seems how it seems like he thinks nothing is viable on the PCGS Forum. Damn its quoted alot here though.

 

Hey! I like that!

POO POO? But I posted a few seconds after TDN.

So lets give David Hall the pat on the back that he finally deserves, way to go Dave! Gee, it wouldn't surprise me this would eventually make front page numismatic news. How do you know they didn't set this up from the start? I don't buy it! It's just another publicity stunt! At least he's trying to start this year off better then the way last year went, lest we forget! I don't trust the man, period! I've seen too many injustices from this company. My advice, wise up, take your loses and leave the registries. Let's work together in straightening up this false mockery of the coin market, prices and population reports. When all this BS bottoms out, we are going to lose many more collectors and dealers alike because of this. It's already happening as we speak! They'll finally figure out as many already have that they've been scammed and leave! A sad day awaits this numismatic hobby and PCGS will be to blame. I don't know where many of you have been, what your reading or why you put such faith in all the sh(hype)it. How anyone can sit back and watch someone pay 10X, 20X what a coin's worth and call it a great honest hobby is beyond me. Read back into a few hundred posts from those who are lashing back and refresh your memories. Wake up people!

 

Leo

 

 

[IrishMike]

I have a pretty good knowledge of the history of this coin. I am 99% certain of who made the 70. Knowing this I am not surprised at all that it turned in the holder. I repeat again I saw this coin last year and it definitely turned.This guy is well known for finding cameo coins and charging the highest prices.

 

We do not know if PCGS tried to buy this coin back from the seller anytime during the last year or not. They announced that they were not going to stand behind the grade which put any seller on notice that their grade guarantee was null and void. It also told any egomanic registry collector that they would not be able to register the coin, if fact what they was boys the game is over, we don't care how big your checkbook is.

 

One last point some of you guys with your constant bashing of PCGS are driving knowlegeable collecotrs away from this forum. You are also giving the few weinies over there a chance to make derisive comments about this forum. For pete sakes it makes you no better than those half-dozen NGC forum bashers over there.Show some class.

[Leothelion]

There are thousands of collectors and dealers alike who need millions compensated! Am I on a roll here, I think not! It's too easy to write it down. It's 2004 and we're in the 21st century but yet we don't have an understandable, agreeable grading standard among all TGC's and everyone else. But nontheless a few keep playing along no matter who gets hurt along the way. DH response to Frattlaw about looking out for the little guy is just about the biggest piece of garbage I have ever heard in FACE of what's going on in our numismatic hobby everyday since the start of the registries. I'm not going to take up anyones time here and revamp all the garbage that's happening everyday between collectors and dealers. The good news is, the majority aren't buying it but yet there has been a major shift of wealth towards coins and gold and few are profitting. Rest assure, it's not going to last, the hobby will get back to normal again for the common dedicated collectors. Prices will fall to affordable levels again most can live with.

Another 15 so so years will pass and the cycle will come full round and many will be screwwed again.

 

Leo

[Fairlaneman]

A sad day awaits this numismatic hobby and PCGS will be to blame.

 

King are you suffering from CRS or is your memory just real short ?

 

Putting a statement up on a forum like this is IMO total BS. How can you come on this forum and single out one portion of the Hobby as the eventual Doom for the Hobby ? I guess it ranks right up there with the statements made other places that NGC cannot grade worth a [!@#%^&^] and that they are a blight on the Hobby.

 

Anyway with the start of TPG in the eighties the Hobby was enhanced and IMO saved for future generations of collectors. Have you forgot what it was like before TPG ? Maybe this is where your CRS has came in.Certainly some mistakes have been made not only by PCGS but also NGC.

 

Of course you are entitled to your opinion but in my opinion your statement reaked of California Horse Manure.

[braddick]

For me, what has emerged from all of this is why Heritage was willing to sell the coin as a PR70DCAM in the first place. They saw the coin. They described the coin. They were willing to sell it as represented.

 

That's kind of sad, isn't it?

[Fairlaneman]

Pat that is a very excellent point. The coin should have been turned back the first time it was consigned. The second time Heritage had their back to the wall I would say.

 

Another interesting coin was auctioned by ANR recently. It was mis-atributed and they knew it yet still accepted the coin for auction. Maybe this coin ANR had was pulled but if it was I read nothing stating so.

 

Bottom line,or so it seems with the Auction companys, is make a buck no matter what.

 

Yes, both of these examples are Sad for collectors.

[mark]

Ken (Fairlaneman):

 

I agree totally with your assessment that TPG companies have been a strong net positive for the hobby. As one who collected in the 1960s, comparing today's hobby with TPG to the hobby without TPG shows that we are MUCH better off. When was the last time anyone bought a whizzed coin in a PCGS, NGC, or ANACS slab? When was the last time anyone bought a counterfeit coin in a PCGS, NGC, or ANACS slab? Sure, it's all to easy to say "Well, a collector must learn what a whizzed coin looks like", or "a collector must learn to detect counterfeits" but come on: This is a hobby, NOT work. I want to buy my coins and be totally assured (or 99.99% assured) that the coin is not whizzed and is not counterfeit. Plus with the advent of slabbing, I also have some assurance that the dealer isn't selling me a coin he or she claims is MS67 only to regrade it as AU58 when I want to sell it back to him or her.

 

TPG do have some negatives. But anyone who claims that they are all negative or net negative either didn't collect before their advent, or has a short memory, or is pushing some sort of hidden agenda...at least in my opinion!

 

Mark

[James_OldeTowne]

It's a weird development in a weird situation.

 

First of all, I think PCGS did the right thing, more or less. I say "more or less", because they did not buy the coin back at market value, but rather less than market value. The true market value was never allowed to be determined, since the coin was withdrawn before bidding could take place.

 

In other words, to remove any shadow of a doubt about the "market value" of a PR-70, the auction should have been allowed to proceed to conclusion, with the coin selling for the final bid. Then it ought to have been bought back from the winning customer. Regardless, PCGS did make good at least in the sense that the customer is not stuck with a bad coin - something we know a little about....

 

I wonder about the role Heritage played in all this. I realize they are PCGS's most humongous-est customer, probably by a wide margin. They did a disservice to auction attendants that were genuinely interested in the coin by not disclosing it as damaged goods; has this happened with other coin appearing in their auction?

 

Finally, everyone seems to know (or believe) that this coin got into a holder after being doctored (sound familiar). What sort of liability is in place there?

 

All in all, despite recent my own recent experience with the PCGS "guarantee", it's hard to find fault with the events that transpired. It sounds like much was done to minimize the pain, which is perfectly understandable. But that the situation could come to this would almost be comical if not for the shocking dollars involved.

 

James

[jtryka]

Wow, there are so many things here that I cannot in any way agree with. PCGS/Hall did the right thing? Yay for them? Yeah, that PR-70 was bad, but the real evil ones here are Heritage who tried to sell it? So let me get this straight, HRH/PCGS manipulated the market, devalued their guarantee to ZERO and they are the heroes, but Heritage is somehow the bad guy? Don't get me wrong, I think that Heritage has some culpability here and they should have really highlighted the true nature of the coin, but they have very little responsibility in my opinion. So for all of you suddenly cheering the virtue of HRH and PCGS, why not ask yourself the following:

 

1. If PCGS made a mistake (or the coin turned in the holder) they needed to repurchase the coin, thus making the owner sell it. By disavowing the grade did they affect the market price of the coin that they had to repurchase? Isn't there a conflict of interest there? Wouldn't it have been better for them to just say nothing and then bid along with everyone else in the auction to ensure a true market price is reached for a PR-70 coin? After all, the guarantee covers the price of the grade on the holder, not the price of the coin that's turned.

 

2. What does this say about their guarantee? What other coins could they disavow? Will they merely void the guarantee on all their mistakes now so they can dictate the prices they will pay for their mistakes?

 

3. You are all congratulating HRH/PCGS for "doing the right thing" but did they really? The end result was certainly desireable, in that this travesty of a certified coin is now off the market, but does the end alone justify their actions and make them right?

 

4. And finally, PCGS itself has a lot to do with the incredible prices generated for top grade common coins since they have been so actively promoting their registry. They see higher revenues from grading as suddenly common coins worth less than the cost of grading are being graded in the hope of hitting that high grade lotto winner. They assign the grades, which in cases like this one turn out to be insanely high-priced coins, and then when they make a mistake, they have the right to manipulate the market to buy it back? That makes no sense.

 

I am really surprised at many of you. Jumping in immediately with congratulations without even considering some of these issues.

 

And if you bestow a "Poo-Poo" on me so be it. I will wear it as a badge of honor, showing that at least I can think for myself and ask the tough questions everyone else seems to ignore.

 

Edited to add #4 above.

[James_OldeTowne]

You do have a point that they MAY have set a dangerous precedent by disavowing a grade on a coin.... if it means they may now disavow any coin they've graded.

 

hmmm....

 

James

[IrishMike]

First let us not try to change history on this coin. This coin was just as crappy last year at FUN when it sold, Heritage had the same picture up this year, not right away but several days into the auction. This coin was bid up by two individuals dueling it out for registry points. They could have cared less what the coin actually graded, they were buying an insert. The guy who bought the coin had a registry set with PCGS and this coin was commented on in the registry forum there, so he darn well knew the condition of the coin.

This coin did sell at auction, its listed as sold on Heritage's site.

 

Tell me again why the guy who sold it didn't get fair value? He knew exactly what he bought and why should he be able take advantage of PCGS for more money when it obviously had turned. He could have at anytime sent the coin back to PCGS for grade review and payment on the guarantee. He chose not to do that and resell this POS to someone else. By disavowing the grade PCGS put the other registry buyers on notice that this coin would not be allowed into the registry, therefore extinguishing any reason for someone to want to buy it.

 

When the day comes when someone who only buys a coin so that they can brag about being number one in a registry, when that coin is obviously a POS then I am out of this hobby for good.

 

Legally I suppose Heritage did nothing wrong but they won't get a free pass from me for selling it not only once but trying to peddle it again for a second time. It's time to tell the industry we are tired of this [!@#%^&^] and "WE AREN'T GOING TO TAKE IT ANYMORE!"

[Tradedollarnut]