 worsening for a year. One issue was his resistance to adopting more rigorous accounting in compliance with the Tokyo Stock Exchange. Mr. Patrizzi opposed an ArtistHouse push to replace Antiquorum's accountants, according to Leo Verhoeven, a Patrizzi ally and an executive at Habsburg Feldman, a Geneva company that owns 43% of the auction house.
Mr. Verhoeven adds that when Mr. Patrizzi stuck to the watch industry's summer holiday schedule of mid-July to mid-August, he caused a timing issue for ArtistHouse, which landed on a Tokyo Stock Exchange list for companies that don't report earnings promptly enough. Mr. Tsukahara blames the delay on Antiquorum, saying that auditors were unable to account for several high-priced watches during an inventory check, forcing ArtistHouse to write off their value.
Mr. Patrizzi denies watches were missing. Giving Mr. Patrizzi's version, Mr. Verhoeven says two watches were consigned to retailers and two were sold in private sales that hadn't yet been booked because of an accounting backlog. Messrs. Patrizzi and Verhoeven say they have sought preliminary injunctions in a Geneva civil court challenging the legitimacy of Mr. Tsukahara's newly created board.
Mr. Patrizzi says that days before his ouster, he sensed trouble was brewing. The line of antique cuckoo clocks on the wall of his Alpine chalet went "a bit out of whack," he says. "One was 10 minutes too fast. Another was 10 minutes too slow. I said, 'Oh God, something is about to happen.'"
This is a really shocking story. It affects pricing at every level of the market, and so far as I can see would be illegal in the US. Don't know about Switzerland.
I expected a number of watch collectors to take strenouous exception. And we've complained about Ebay over the years- without taking account of Antiquorum.
In my opinion, this practice is akin to fraud!
Just for added information, you may want to look at Antiquorum's press release of the auction results.
I'm not so sure that this is as bad as the article makes it appear. It's not unusual in the art world for a museum to be involved in the authentication of a painting, and then to attempt to acquire it for their collection. Nor is it unusual for them to bid anonymously, simply to avoid their name being used to solidify other's interest in the piece. The major auction houses have long participated in this, since accommodating high rollers results in higher bids, and thus greater commissions. It's the application of these ideas to the marketing of still-produced watches that seem to be causing concern. In the world of fine arts, this wouldn't raise an eyebrow.
If Omega owned any of the pieces that they subsequently bid on, and thus achieved higher prices, then yes, that would be fraud.
If Omega had hidden their cooperation in the service and authentication of the pieces, then it could be fraud. These auctions were widely discussed in collector's circles beforehand, and Omega's involvement was well-documented (and their expertise questioned), particularly in regard to a couple of heavily restored pieces.
If Omega's museum acted as an independent entity from Antiquorum, placed bids legally, paid those bids and all fees, then where is the problem? Some may say that the resulting publicity enhanced the value of the firm, and their other products, but is that fraud? They were quite forthcoming prior to the sale that this was part of the whole purpose of their participation. I see it as little different than "providing" Omega (or any other brand) watches for celebrities to wear in high visibility situations. Do you really think that those actors, models and sports stars bought their Omega's at retail, and sent in their testimonials free of charge? Is that fraud?
If you were one of the collectors who consigned a piece through Antiquorum, and you received a much higher than anticipated price, whether Omega bought your watch or not, wouldn't you be pleased with the result? I for one would be tickled pink to know that a watch that I had found might be worthy of inclusion in the Omega factory collection, and I'd certainly be happy with the extra money.
If I wanted one of the watches badly enough to outbid the Omega Museum, regardless if I knew it was them bidding against me, then I got what I wanted at a price I was willing to pay. Yes, if they hadn't bid I would have gotten it for less. And if no one bids against me on eBay, I could get every auction I enter for the starting bid. Sometimes I win, and sometimes I don't, but it's only fraud if the seller (or his accomplices) push my price up with no intention of buying the item should they win. And even if it does happen on eBay (which I know it does)I still control my highest bid. To say that their actions are "heinous" smacks of sour grapes to me.
Please don't forget that for any auction to achieve these prices, two people must be bidding, not just one. If Omega paid $351,000 for the platinum Constellation, then someone else was willing to bid $350,000. Omega didn't own the watch, and someone else wanted it badly enough to bid that high.
None of us likes to lose an auction, and I know I have been frustrated many times when a bidder with known "deep-pockets" knocks me out of contention for an item I really want. I also know that eBay's user ID's (and especially their recent practice of masking those ID's) makes us all effectively "anonymous bidders." I have a good friend who keeps a chart of bidder ID's and their corresponding real names, just so he can keep up with which collectors are buying which things. I don't do this, and there are only a few I know. There are many more I recognize, just from seeing them over and over, but have no idea who that person actually is. While some of us make no attempt to mask our identity on eBay, many use multiple IDs (or frequently change them) just to avoid the kind of attention that I assume Omega was trying to avoid when they bid anonymously. I know that some people track my bid activity, and I've had one well intentioned collector tell me how it made it easier for him to search, knowing that if I was interested in an item, he would probably like it as well. Wouldn't Omega's interest in an item verify it's desirability to others, and thus increase the price achieved? I still don't see how bidding anonymously, assuming those bids were sincere, is fraudulent, illegal, or even unethical. Has anyone checked to see if any of those newly acquired pieces were actually delivered to Omega? I'm assuming that PriceWaterhouseCoopers will verify if they were actually paid for when they complete their audit of Antiquorum.
To address Robert's third point, all of this is separate from whatever issues Mr. Patrizzi may have with the management of Antiquorum and ArtistHouse. It shouldn't surprise anyone who's kept up with collectible watches for the past twenty years that there could be questions with his accounting practices. The fact that he keeps coming back within the field would seem to verify that he eventually makes good on things, even if he's a bit "fast and loose" in the meantime.
Sorry that this turned into a ramble. I'd just like someone to explain to me which part of Omega's conduct rises to the level of fraud. It seems to me to just be another cleverly orchestrated marketing scheme, and a very successful one at that. That may be distasteful to some collectors, but I think that this also illustrates the differences between those of us who thrill to the sight of a fifty year old watch worth a few hundred dollars, and to those who are invited to secret showings of next year's Pateks (or Audemars or Vacherons, etc.) and drop two or three million dollars on watches that will never be worn. That's the market these auctions are hoping to influence, and then to have that effect trickle down so that someone else might pay $2500 for a new Planet Ocean. I haven't seen any "Omegamania" effect on the prices of 1950s Seamaster's or 1930s imported Omega dress watches, two areas where I do pay attention.
As Fitzgerald said, "The very rich are different from you and me".
I guess this is the part that bothered me the most.
I think the fraud charge will only stick if the underbidder was in cahoots too. Think about this, if Omega did enter agreement with Antiquorem to to intentionally create a stir and promote intererst so that prices will rise, that's just marketing folks. If they they colluded with a third party in order to run up prices, that's illegal. "Pooling", as it is known, is illegal everywhere as far as I know (trust me, I don't). Buying "for the museum"seems noble enough but, one might also conclude that, in the course of bidding up the market, the speculator can often lose(i.e. end up overspending for an item); what better excuse/explanation than pleading for unique museum examples? These could be reconverted later as necessary.
If Omega conceived, contrived or colluded in such a plan in order to delude the market into believing that, if someone is convinced that buying an Omega for 350.000 is a good investment, then this $8,000- one must be a good deal..., a line was crossed.
I was told years ago that the marketers of high end watches