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Settlement in Rigged Bidding Allegation on eBay
A New York jewelry merchant and his company, the EMH Group, recently agreed to pay a $100,000.00 fine and $300,000.00 in restitution in connection with the sale of large quantities of merchandise through eBay, the online auctioneer. The settlement includes a four-year prohibition on participation in online auctions.
The allegations in this civil fraud suit were that detailed bidding instructions were sent to employees of the company, who then entered bids to artificially drive up the price of items. The New York Attorney General’s office estimates that a 20% price increase was achieved by this conduct.
In 2005, eBay issued a policy specifically forbidding this type of conduct, and it was responsible for alerting officials to the suspicious patterns occurring in EMH’s sales. It took over a year for New York state officials to complete their review of the evidence and initiate legal proceedings.
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