Answers to three commonly asked questions about the ‘halvarez’ scandal.
The topic commonly known as ‘halvarez’ — the insider bidding scandal at SnapNames — wasn’t a major topic at DOMAINfest. I didn’t expect it to be, either. Within days of the scandal breaking I talked to several big SnapNames customers. They were disappointed about what happened, but also understanding. Most had accepted SnapNames’ compensation offer and moved on.
But a number of people still have questions. So I took advantage of a media breakfast with Oversee.net CEO Jeff Kupietzky last week to get some answers to some of these commonly asked questions.
If ‘halvarez’ did what Oversee.net alleges, why hasn’t a lawsuit been filed against him?
This is the questions I hear most frequently. Kupietzky described it as an “ongoing legal matter”. This makes sense. Contrary to what some people believe, the first reaction when someone allegedly does something wrong isn’t to file a lawsuit. There are other ways to get restitution or compensation.
Has it always been against SnapNames’ policy for employees to bid on auctions?
The exact date that employees were notified they may not bid in auctions isn’t known. However, the employee’s alleged behavior of bidding to increase customer’s costs has clearly been against the rules and norms.
How much compensation has been paid out to customers?
SnapNames isn’t releasing the actual dollar amount. But of the compensation pool it set aside, about 55% has been claimed.
My personal knowledge from talking to some of SnapNames’ biggest customers is that most customers weren’t owed nearly as much as you might read about on some forums and blogs. Some of the biggest customers were owed low-to-mid five figure sums. This depends, of course, on what types of domains they were bidding on. But as I mentioned before, most big customers I’ve talked to took the compensation offer and continue to bid at SnapNames. (Hat tip to Kieren McCarthy for asking the last question.)