SnapNames Employee Bid in Domain Auctions, Cleanup in Progress

SnapNames employee bid in auctions, but the bigger news is how company is handling it.

You’ll probably read a lot today about how a SnapNames employee had been bidding on auctions for the past four years. In case you haven’t heard the story, here’s a brief recap:

-Employee opened account in another name and started bidding in 2005
-Participated in about 5% of auctions, mostly between 2005-2007
-S/He won about 1% of the auctions during this period (so about 20% of the auctions he participated in)

The employee’s actions violated SnapNames policy.

This is obviously bad news for SnapNames and Oversee.net. But how they have handled the situation shows the company’s commitment to professionalism and making things right.

It had a policy in place. First, it’s important to remember that SnapNames had a policy in place prohibiting employees from bidding in auctions, as the company told me after the GoDaddy flareup. That wasn’t the case at GoDaddy, although that has since been rectified.

After discovering the problem, SN did a full investigation. Based on material released from SnapNames, it’s clear that the company did an entire audit back to 2005 to figure out exactly which domain auctions were effected. Apparently the employee’s bidding accounted for about 1% of total SnapNames revenue. [Update: it appears that some people have speculated about the user involved for some time. Acro on DNForum even wrote back in 2006 “Some have speculated Halvarez is Snapnames, which I don’t believe.” Domain Name News has confirmed that username “Halvarez” was the associated employee.]

SnapNames released the story to its customers and media. Rather than push the issue under the rug, SnapNames sent a release to domain bloggers today informing them of the problem and what it is doing to resolve it.

The company is putting its money where its mouth is. Rather than just say “sorry”, SnapNames is going to pay –literally. The company will offer a rebate to customers who bid in auctions against the SnapNames employee, which would have caused them to pay more for the domain than if the employee had not bid. In addition to the rebate, it will pay interest.

To summarize, this is an unfortunate event for SnapNames and the domain industry. But the cleanup shows that the industry is growing up and becoming more professional. SnapNames is taking responsibility for its (employee’s) actions, and should be commended.

I also hope that other domain auction sites heed the warning and set up internal controls.

Comments

  1. Rene says

    “-Participated in about 5% of auctions, mostly between 2005-2007″

    5% of all auctions go to one “customer” ?

    How can that not be noticed for so long? Impossible!

    • says

      Rene wrote “How can that not be noticed for so long? Impossible!”

      I suspect this may have come to light when Craig Snyder joined Oversee and took over SN and Moniker. I can picture a meeting where he’s suddenly like “who is this guy that accounts for so much revenue”. Just speculating, but the timing…

  2. says

    I wish I had a dollar for every time Snap was informed that halverez must be an insider. I contacted them several times myself. The big question is what took so long.

    I think everybody has had the experience of ordering a really lame or obscure name at snap, only to see Halverez as the second bidder.

  3. says

    Swinginchicks.com is one he won.

    But it’s the ones he didn’t win that do the real damage.

    This explains why he was always 2nd bidder in so many of my auctions.

    Criminal charges I hope are in this guy’s future.

  4. Mike says

    There is definitely more than one account involved in this fraud.

    I can count at least 3 accounts at snapnames that drove up prices on my auctions by tens of thousands of dollars in some cases.

    halavarez, hidden, vaxcis

    I believe this is all the work of Nelson Brady who used some very high pressure techniques to get people to pay on these rigged auctions.

  5. Rene says

    Snapnames should do it like Sedo and others 😉

    Just call them bidder 1, bidder 2, bidder 3…
    Noone will ever find out if the bid is from Sedo itself. Cheating made easy.

    Actually, Sedo should show the bidders names, so we can see their “Halvarez” in action.

  6. Idiot Domainer says

    Andrew you should remove posts with personal info. Not cool imho regardless of what happened or what this persond did do.

  7. says

    Well, here’s proof that snapnames owes me money

    http://robsequin.com/images/halvarez-bids.gif

    This screen cap shows me (I am whatever bidder ID) bidding against Halvarez from $59 to a winning bid of $160 with no other bidders in between. So, there’s $101 coming my way and I know I bid against Halvarez MANY MANY times.

    The latest that I can find Halvarez in one of my auctions is from March 2009

    http://robsequin.com/images/halvarez-march-2009.gif

    If he is bidder ID ppppp too, I’m gonna be getting an even bigger check.

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