I have been following along the NamePros thread and article on TheDomains.com about alleged bidding irregularities at NameJet. I have also been in communication with NameJet General Manager Jonathan Tenenbaum, asking to receive updates as the company addresses the allegations and investigates the situation.
A few minutes ago, Jonathan emailed me a statement with a status update from the auction platform:
“In an effort to keep everyone current as to where we stand on this matter, I wanted to share the following update. There have been some inaccuracies and misconceptions that have been brought forth by such a spirited discussion. And it would be a challenge to respond to all of them – therefore, I want to bring the discussion back to the heart of the matter.
As stated earlier, we take the issue of shill bidding on NameJet very seriously and we are conducting a thorough investigation, keeping in mind that the integrity of our platform is of utmost importance to us. As I have said repeatedly, we do not condone shill bidding of any kind. We would never encourage, promote or otherwise be involved in any such thing and our position is clear – it is never allowed on NameJet!
In our current investigation certain auction activity has come to light that we deem questionable and a possible violation of our terms. This kind of activity is not acceptable to us and we are taking steps to deal with it. We have suspended several accounts while working through the information we have available.
I thank everyone for their patience as we work through these issues. Our goal is to best serve our customers and we are working hard to that effect.”
When it comes to auction venues and domain name marketplaces, trust is the most important component. As a NameJet customer and someone who writes about the domain investment business, I want to share some advice for NameJet:
- Have an independent, third party investigation into this matter. I presume there are companies that can be used as outside auditors, and their results will likely be more accepted than an internal audit. An investigation of this nature may take longer to accomplish and it will be more expensive than an internal audit, but it will be more trusted by industry participants.
- Keep customers in the loop about what the investigation finds and reveal everything. If things are kept private and people find out that something was not revealed in its entirety, it will lead to distrust.
- If there was wrongdoing found and customers lost money as a result, make them whole.
- Make it clear what is acceptable and what is not acceptable when it comes to bidding and selling. Obviously laws and traditions differ in different countries, so it is imperative that all sellers and bidders know what they can and cannot do when using NameJet.
With that said, I think customers need to let the investigation run its course and not jump to conclusions about what happened. Making faulty assumptions can damage someone’s reputation and open the accuser to legal action. As George Kirikos pointed out on Twitter this afternoon, today may actually be a good day “if it leads to cleaning things up.”
Spot on, good post Elliot.
Wise advice. Let’s hope they have the courage and commitment to follow it.
I hope Namejet takes your advice Elliot! It would be to their advantage.
Based on what we have seen in the past with similar things, I am a bit skeptical.
“Have an independent, third party investigation into this matter.”
NameJet needs to take the simple step of not allowing a username associated with a domain for sale to bid on that auction. Period. Like most, I assumed that there was NO WAY they would even allow someone to bid on their own auctions. I’m blown away that they haven’t done that in all these years. Friends & family colluding is obviously more difficult to police but bidding on your own damn auctions?!?
Auction houses need a VERY CLEAR policy on shill bidding and the repercussions. Nothing in NameJet’s TOS discusses shill bidding from what I can see. Their auction services agreement discusses it a bit but bidders need it clearly stated that sellers are absolutely forbidden from doing so so.
For violators, NameJet needs to follow through and make an example of those who have gamed the system. Everyone in the industry also needs to make an example of those who are found guilty and hold them accountable, imo.
Those of us who make a living in the domain industry have spent tons of money at NameJet, GoDaddy, and other venues. This is our livelihood and these allegations are a serious black eye to the industry.
If investors are going to feel comfortable using auction sites, there better be some serious changes coming as well as some serious repercussions for those who are found guilty.
Good points Ian, I would even go so far as to say if the optics look bad, we are not going to allow certain things.
For example, I would take two people at their word, we are say for example, Father and Son and we like to compete against one another and also bid on each other’s names. While that’s no crime, I would run a platform where I would say, NO THANK YOU! We don’t want that business because the optics look bad to an outsider, they didn’t have a chat with you or review emails. They just think my platform is dirty. No thank you.
Step 1 is for Jonathan to resign.
This happened under his watch and accountability is a thing.
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I am shocked, shocked! to hear that there might be some chicanery associated with domain name investing. It’s truly a daunting task to find another sales and marketing arena that can come close in the number of ‘scandals’ that unfold on a monthly basis. As Johnny Cash once crooned, ‘Keep your eyes wide open all the time.’
Yes they need to be proactive to restore some faith, I actually quite like NameJet but this kind of stuff is a worry
You have to be in the domains ‘cool’ club or one if the boys to get your names listed on NJ in the first place.
Most domainers never get a chance to list on NJ. It’s a protected and exclusive club.
It’s quite evident that NJ has been made aware for a long time and many occasions from multiple sources that there is ‘funny business’ and suspicious bidding by some of their biggest transactors. They have done nothing…it’s all just lip service..
The statements from NJ in the last two days is just more of the same..
They know which side their bread is buttered.
nice advice, but i believe everything could be automatized, removing human factor, what they will investigate ? ip range ? email and previois transactions ? this could be done without human intervention ….
another point here is the ‘Exclusive club’ mentioned by Barry Felds, auctions have to allow everyone to list,
Agree with Elliot.
That said, I don’t think NameJet will start an independent, third party investigation on this matter, UNLESS FORCED by someone, the FBI or some other legal authority.
Why? because IMHO there has been COLLUSION to “pump and dump”, to artificially inflate their own auction prices for YEARS among NJ and those guys, including the Booth bros, Oliver Hoger, Drew Rosener.
NameJet’s GM, Jonathan Tenenbaum, should resign immediately, the lack of accountability is very relevant here.
Secondly, I think those are not the only guys involved in this huge SHILL BIDDING case, IMHO there are other “TOP” domain investors who profited from this ring to rig auctions.
Shill bidding is a form of WIRE FRAUD, and there is both JAIL TIME and severe monetary penalties for those involved.
Just a quick reminder for those guys: “Shill bidding has resulted in criminal prosecutions in New York State under the Donnelly Act. The Donnelly Act, found in New York’s General Business law Code section 340-347, is an antitrust law that prohibits bid rigging and price fixing. The Donnelly Act has been used by prosecutors against people accused of shill bidding in online auctions. Being charged under this Act can result in a maximum four year prison sentence, and a fine of $100,000 for individuals and $1 million for businesses.
Shill bidding may also be considered a form of wire fraud, which is a federal offense under 18 U.S. Code Section 1343. Maximum penalties for the crime of wire fraud can include two decades imprisonment.” (Source: Law Offices of Bukh & Associates, New York).
I’d suggest to start a Class Auction, and informing the FBI about the matter.
I mean “Class Action” 🙂
While the above comment includes the expression ‘IMHO’ which I understand to signal that the comment is a statement of the poster’s opinion, I would remind everyone that you are responsible for the comments which you post to this blog. Making unproven accusations of criminal behavior by others can lead to serious consequences. This can pose something of a dilemma for a blog publisher when others use the comments section to post these sorts of opinions.
Since you have prefaced your comment with “Agree with Elliot”, I believe I should make it clear that I do not agree with your opinion stated above and do not endorse your comment. The dilemma in these types of situations is whether to leave an opinion such as yours in the comments section or to delete it and then be drawn into accusations of censoring other people’s opinions. I believe the best course is to make it clear that I do not endorse your opinion by not removing it. However, I would warn you and others that you are walking a fine line when you post these sorts of opinions.
Thanks Elliot, when I said “Agree with Elliot”, it refers to the fact I agree with the need of a third-party independent investigation on NJ.
As for your “legal tips”, well, thanks, but I’m an experienced professional, I’ve worked on many corporate fraud cases, all definitely larger and more complex than this shill bidding scandal, also as prosecution witness, so I know what I’m talking about, and our lawyers are the best in town.
Andrea – you are guilty of libel. No way around it.
I have just posted my response to the wild accusations that you and others are throwing around. You are going to regret making comments like this.
You scare nobody, you’re threatening and messing with the wrong guy, I’ve already told you that in private long ago.
Hopefully Network Solutions (subsidiary of web.com – a publicly traded company) and eNom’s Sr Management – joint owners of NJ – will do what’s required of them as fiduciaries to their shareholders; to make sure this trust and public relations threatening situation is promptly and independently investigated, and results of such investigation promptly disclosed; as required by applicable laws and SEC regulations.
Its high time that NJ’s arbitrary, capricious control of the domain auction space was reformed; allowing all who wish to do so auction their domains.
Spot on, and fully agree!
Totally agree, and great insight shared here Elliot.
Any of you ever play poker in Vegas? In the big rooms (Bellagio, Venetian, Aria, & Wynn), many of the tables are 60%-70% full of local pro’s who know each other well, who sit and wait for tourists to come and lose…that’s how these guys make their living, colluding and shearing the sheep who walk through the doors. In the domain-game, we all are the sheep (with a few obvious exceptions).
LOL, as someone who appreciates poker, well said.
Namejet will do what’s best (profitable) for Namejet, end of story. They will take literally none of your advice Elliot.
Ethics is a word wasted on the topic.
Individuals who bid on their own assets are completely disrupting the free market, plain and simple. Creating an inflated, false sense of demand for a product that you own is unethical and disturbs natural the flow of what is perceived to be the actual demand of a product. Forget reserves. Forget any other excuse that they are are attempting to offer. The point is that there are many (very solid) reasons why shill bidding is not allowed on virtually all of the platforms and it’s not rocket science as to why. Also, it seems that a few of these perpetrators are not just common domain investors. The suspects (thus far) are “industry influencers” with arguably the largest and longest list of connections in the industry. The unethical scenarios that we (as outsiders) could extrapolate by them bidding on their own assets, are endless. If their domains are so amazing then clearly there should be no need to artificially inflate their prices. These people should grow some balls and just sell ethically, straight up, without having to artificially interject themselves into the equation.
This only affects third party listings, not partners?
NetSol+Enom+Register+Tucows are not pumping up prices?