Feeds

Domain auction house wrestles with alleged shill

SnapNames in legal action against ex-exec

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

Oversee.net CEO Jeff Kupietzky has revealed that the company is in active but pending legal action against the former executive who allegedly fixed tens of thousands of its domain-name auctions under the pseudonym “halvarez."

Last week, at the company's Domainfest conference, Kupietzky refused to be drawn on the company’s precise action toward former vice president of engineering Nelson Brady, citing legal constraints. However, he did reveal a number of details surrounding the scandal and its aftermath, including the multimillion-dollar compensation the company has paid out to swindled punters.

Back in November, as we reported here, the company announced that an executive - later identified as Brady - had been using the name “halvarez” for years in his own company’s auctions. It sent letters to every affected bidder explaining the situation and offering compensation.

The company said that an investigation revealed that Halvarez had bid against others, increasing the price, and then dropped out at the last moment ensuring that the Oversee-owned SnapNames made a greater profit. On the occasions that he won the auctions - presumably by mistake - Halvarez would usually seek a partial refund. Oversee bought Snapnames in October 2007 for $25 million – a purchase figure based in large part on auction revenues.

What makes the situation worse in punters’ eyes is that several of them posted their concerns about Halvarez years earlier, some even stating that they believed the bidder worked for SnapNames. According to Kupietzky, the company had retained a major flaw by possessing a “single point of failure:" Brady, says Kupietzky, was in charge of investigating claims of fraud against himself.

Oversee has won praise for its response to the scandal by coming clean and offering to pay anyone involved in a losing bid with Halvarez the difference it what they would have paid without his action, plus 5.22 per cent interest.

Kupietzky declined to give an exact total of the cost of compensation, but said that the full cost was “significantly lower” than our estimate of $7.5 million, which was extrapolated from the details that have emerged so far. The company has so far paid out 55 percent of the compensation pool it created, Kupietzky revealed. It's not known how much of the remaining funds cover those involved in two class-action lawsuits filed against Oversee - lawsuits that Kupietsky says he is confident of beating.

The company has introduced new measures to ensure that the situation doesn't happen again. It is in regular contact with frequent customers and has three people overseeing investigations into unusual behaviour, Kupietzy noted.

Despite the scandal, Oversee held one of the strongest domain-name auctions it has seen in recent years on the last day of Domainfest in Los Angeles. Of 285 domains up for grabs, 122 were sold, netting $1.07 million. The biggest sale of the night was $215,000 for loancalculator.com. ®

Security for virtualized datacentres

More from The Register

next story
TEEN RAMPAGE: Kids in iPhone 6 'Will it bend' YouTube 'prank'
iPhones bent in Norwich? As if the place wasn't weird enough
Consumers agree to give up first-born child for free Wi-Fi – survey
This Herod network's ace – but crap reception in bullrushes
Crouching tiger, FAST ASLEEP dragon: Smugglers can't shift iPhone 6s
China's grey market reports 'sluggish' sales of Apple mobe
Sea-Me-We 5 construction starts
New sub cable to go live 2016
New EU digi-commish struggles with concepts of net neutrality
Oettinger all about the infrastructure – but not big on substance
PEAK IPV4? Global IPv6 traffic is growing, DDoS dying, says Akamai
First time the cache network has seen drop in use of 32-bit-wide IP addresses
EE coughs to BROKEN data usage metrics BLUNDER that short-changes customers
Carrier apologises for 'inflated' measurements cockup
Comcast: Help, help, FCC. Netflix and pals are EXTORTIONISTS
The others guys are being mean so therefore ... monopoly all good, yeah?
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.