kickbacks alleged in suit

[Revolution]

Originally Posted by Bold Brooklynite

It's more like chicanery than outright theft.

Anyone who spends $1 million on something that he knows nothing about ...

... either has lots of millions ... or is a complete chump.

The scheming trainers and consignors don't put a gun to anyone's head ... the chumps do these things voluntarily.

If you pay $100 for something ... then see it selling for $60 everywhere else ... is the person who sold it to you a thief ... or is it your fault for not being diligent?

it is criminal, not chicanery. the owners depend on the trainer that works for them to be honest. if you hire an accountant and he plays with numbers to his advantage, or if you hire any professional and they are cheating you behind your back that is wrong. you are paying for their expertise, not for them to be a thief.

[Rupert Pupkin]

Originally Posted by Revolution

it is criminal, not chicanery. the owners depend on the trainer that works for them to be honest. if you hire an accountant and he plays with numbers to his advantage, or if you hire any professional and they are cheating you behind your back that is wrong. you are paying for their expertise, not for them to be a thief.

Yes, exactly.

Originally Posted by Revolution

it is criminal, not chicanery. the owners depend on the trainer that works for them to be honest. if you hire an accountant and he plays with numbers to his advantage, or if you hire any professional and they are cheating you behind your back that is wrong. you are paying for their expertise, not for them to be a thief.

That only depends on there being a contractual agreement which rules out such transactions.

And an accountant can't play with numbers ... if you require him to give you regular accountings. If your head is up your butt ... that's as much your fault as his.

Let's face it ... there is no known value or price for any race horse ... one man's million-dollar horse is another man's nag.

How can anyone say, "The horse was only worth $100,000 ... but I paid $200,000"? Hey ... the horse may really be worth nothing ... or millions. A yearling may never get to the races ... or he could be a champion. A broodmare may be barren ... or she may drop five SWs. A champion race horse can go to stud and be Coaltown (0 SWs from 160 foals) ... or Bold Ruler (24% SWs).

The price of anything ... horses, cars, cigarettes, or toothpaste ... is what you're willing to pay for it ... and what someone else is willing to sell it for.

If some hustlers take you for a ride ... you let your own greed and/or indifference play you for a chump.

However ... this has been a most interesting and informative thread. Thanks to all who contributed ... or almost all.

[Rupert Pupkin]

Originally Posted by Bold Brooklynite

It's more like chicanery than outright theft.

Anyone who spends $1 million on something that he knows nothing about ...

... either has lots of millions ... or is a complete chump.

The scheming trainers and consignors don't put a gun to anyone's head ... the chumps do these things voluntarily.

If you pay $100 for something ... then see it selling for $60 everywhere else ... is the person who sold it to you a thief ... or is it your fault for not being diligent?

Most owners don't claim to be experts. They don't know how to pick out a horse at a yearling sale or 2 year old sale. So they hire an expert to do if for them. They don't expect the expert that they hired to rip them off and charge them double the actual price.

Originally Posted by Bold Brooklynite

It's more like chicanery than outright theft.

Anyone who spends $1 million on something that he knows nothing about ...

... either has lots of millions ... or is a complete chump.

The scheming trainers and consignors don't put a gun to anyone's head ... the chumps do these things voluntarily.

If you pay $100 for something ... then see it selling for $60 everywhere else ... is the person who sold it to you a thief ... or is it your fault for not being diligent?

It is still ethically not right and that is the bottomline....So just because somebody is a little naive and wants to be involved in the game you are saying that they are the ones at fault?...Comon man..

If it were required for all owners to be educated in thsi game then the industry would be done...flat and ruined.....there would be just a handful of owners...

The bottomline is that when you turnm a new owner on to horse racing that is a beautiful thing - and NO owner who is getting a beginning completely understands the game - especially teh yearling market, etc....they ALL usually do what an advisor - i.e. a trainer or agent - advises them to do....period...

Every owner this game didn't completely understand it at one time...that is natural and why people hire consultants and trustees to DO THE RIGHT THING!

Look at Bob and Beverly Lewis for example - whom have been getting illegitimately financially molested their entire racing careers as owners - they were introduced as new owners in the 90s and became soem of the greatest and most popular owners of all time - yet, all they knew prior to being owners were that they loved the game, and all he knew when he died and all she currently knows is that Silver Charm was a good horse....Believe me, i sat behind them at the Keeneland Sept. sale last year and let me tell you that they were CLUELESS to say the least about what they were looking at....no clue about looks, pedigrees, conformation, etc....

So are you saying people like the Lexis' don't deserve to be treated fairly as owners of this game and taken advantage of because they were naive to the sport and only loved it for it's beauty?......NO

Originally Posted by Cunningham Racing

If it were required for all owners to be educated in thsi game then the industry would be done...flat and ruined.....

And the bad part about that would be ... ?

[randallscott35]

Originally Posted by oracle80

Guys a kickback is defined if you take comissions on both sides without disclosing such things to the parties involved. Its not real bright.
Randall I have never purchased a horse at a sale. Its not my game and sadly I don't think it ever will be. Its a seperate talent from finding one who is already running. Just like Rup's talent of watching two year olds breeze at training sales is another seperate one.

But Mike this also goes on in private purchases, essentially the same ballgame, no?

[Cannon Shell]

Originally Posted by randallscott35

But Mike this also goes on in private purchases, essentially the same ballgame, no?

fraud is fraud, right?

Originally Posted by randallscott35

But Mike this also goes on in private purchases, essentially the same ballgame, no?

Not like that.
Private purchases are much tougher to get away with at a level like that.
Sometimes you can get a bigger commission, but you really can't represent a 500 thousand dollar horse to be a million dollar horse. Its pretty obvious what a horse is in the ballpark of after it runs.
What does sometimes happen, which is legal, is that an agent who has a lot of money(more than me, I don't have a half mill under the mattress) will buy one privately and then sell it to client at a markup. Thats not illegal, ist called arbitrage, or capitalism.
There is no standard commission that someone has to pay you. You can agree on 10%, 5%, 20%, etc. As long as you only take the commission from one side then you are ok. If you take say, 10% from the seller, and then bill the buyer 5% without disclosing the 10% you took from the other side, you are on thin ice.
Syndicates do this all time. One of those partnerships may buy a prospect for 350 grand and then sell pieces of it at a value of 500 grand.
The auction thing is much different. In cases that Richi describes, its outright fraud and price fixing.

Lets suppose an agent sees a horse run who he likes. He calls the seller and says, how much. The seller will sometimes say, 300 grand and we will take care of you. Meaning they will pay you a commission. Sometimes you call up and say how much, and they will say 300 grand TO US! meaning put your commission on top of that or bill the other side.
Most guys who buy privately are pretty sharp. They have a pretty good idea of what a horse is worth.

[Sightseek]

You can also have more than one agent involved in the private buy transaction much like realtors act or an agent who refers to another agent who than finds the buyer. Not the most money making way to do it, but some guys have the windows to better buyers that another agent might not have.

[Cajungator26]

Originally Posted by oracle80

Lets suppose an agent sees a horse run who he likes. He calls the seller and says, how much. The seller will sometimes say, 300 grand and we will take care of you. Meaning they will pay you a commission. Sometimes you call up and say how much, and they will say 300 grand TO US! meaning put your commission on top of that or bill the other side.
Most guys who buy privately are pretty sharp. They have a pretty good idea of what a horse is worth.

So Mike, let's say you had an agreement with your buyer to take care of your commission... if the seller decided they were going to "take care of you" does that mean you would take both commissions or would you credit your buyer?

One more thing about buying privately, an agent may call a guy up and say how much? The seller might say 100 grand. The agent may send in a signed contract that gives him 5 days to pay the money and have the horse vetted. In the meantime someone else may think the horse is worth 200 grand. If he contacts the agent who has the horse under contract, the agent can commit arbitrage and sell his contract for cash. Meaning he can sell the contract for a chunk of cash to the guy who thinks hes worth 200 grand.
very often, after buying privately, the guy who bought the horse will sell pieces of the horse at a higher value than he bought the horse for.
I know for a fact that this happens often. Guy may buy one for 250 and sell half the horse to a partner for 175 before it runs.
Although that may seem unethical, its really not. You are simply telling someone what they have to pay to get what they want.
At a sale, its quite different. Auction means auction. Its supposed to mean that people bid against one another and that the guy with the highets bid gets the horse. If someone is planted in the crowd to run up the price who isn't really bidding, then thats wrong.
What I don't understand is why guys do it the way that they do it and risk this.
If the same guys just went to an owner before the sale and said "hey, we love this horse and can buy it before the sale for x amount" and the client does so, they can then get a legal commission from the seller(so long as they dont bill the buyer as well). If someone wanted to, they could pay a 50% commission on a private sale, its their money and they can do what they want with it.

[Sightseek]

Originally Posted by oracle80

One more thing about buying privately, an agent may call a guy up and say how much? The seller might say 100 grand. The agent may send in a signed contract that gives him 5 days to pay the money and have the horse vetted. In the meantime someone else may think the horse is worth 200 grand. If he contacts the agent who has the horse under contract, the agent can commit arbitrage and sell his contract for cash. Meaning he can sell the contract for a chunk of cash to the guy who thinks hes worth 200 grand.
very often, after buying privately, the guy who bought the horse will sell pieces of the horse at a higher value than he bought the horse for.
I know for a fact that this happens often. Guy may buy one for 250 and sell half the horse to a partner for 175 before it runs.
Although that may seem unethical, its really not. You are simply telling someone what they have to pay to get what they want.
At a sale, its quite different. Auction means auction. Its supposed to mean that people bid against one another and that the guy with the highets bid gets the horse. If someone is planted in the crowd to run up the price who isn't really bidding, then thats wrong.
What I don't understand is why guys do it the way that they do it and risk this.
If the same guys just went to an owner before the sale and said "hey, we love this horse and can buy it before the sale for x amount" and the client does so, they can then get a legal commission from the seller(so long as they dont bill the buyer as well). If someone wanted to, they could pay a 50% commission on a private sale, its their money and they can do what they want with it.

Unless an owner is offered a really pretty penny before the auction it is in his best interest to set a high reserve and put it through the ring...you never know what sort of bids you could get and if those prospective buyers who offered to buy before the sale were truly interested in the horse they will call you up after the horse has RNA'd and purchase privately.

Another evil of auctions is the horse entered who that was a foal share...certain farms will really run up a price to make their stallion look good.

[SentToStud]

Originally Posted by oracle80

One more thing about buying privately, an agent may call a guy up and say how much? The seller might say 100 grand. The agent may send in a signed contract that gives him 5 days to pay the money and have the horse vetted. In the meantime someone else may think the horse is worth 200 grand. If he contacts the agent who has the horse under contract, the agent can commit arbitrage and sell his contract for cash. Meaning he can sell the contract for a chunk of cash to the guy who thinks hes worth 200 grand.
very often, after buying privately, the guy who bought the horse will sell pieces of the horse at a higher value than he bought the horse for.
I know for a fact that this happens often. Guy may buy one for 250 and sell half the horse to a partner for 175 before it runs.
Although that may seem unethical, its really not. You are simply telling someone what they have to pay to get what they want.
At a sale, its quite different. Auction means auction. Its supposed to mean that people bid against one another and that the guy with the highets bid gets the horse. If someone is planted in the crowd to run up the price who isn't really bidding, then thats wrong.
What I don't understand is why guys do it the way that they do it and risk this.
If the same guys just went to an owner before the sale and said "hey, we love this horse and can buy it before the sale for x amount" and the client does so, they can then get a legal commission from the seller(so long as they dont bill the buyer as well). If someone wanted to, they could pay a 50% commission on a private sale, its their money and they can do what they want with it.

That's interesting stuff. Thanks for the look in.

When an offer is made and a contract signed, is there earnest money wired? If not, how does the contract get enforced upon the buyer? I.E., the horse vets fine then the buyer has remorse and doesn't pay?

I assume the veting process is done and paid for by the buyer? Does the seller have any recourse if the buyer claims the horse did not vett out well? i.,e., another 3rd party review?

I assume these contracts are generally written in favor of the buyer.

Thanks again.