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Here's the The Lowdown from DN Journal,
updated daily
to fill you in on the latest buzz going around the domain name industry. 

The Lowdown is compiled by DN Journal Editor & Publisher Ron Jackson.

First Class Action Suit Filed in the SnapNames Shill Bidding Scandal and Customers Get Access to Bidding Records

The first trickle in what observers expect to be a flood of lawsuits was filed today as the insider shill bidding scandal at SnapNames.com continues to dominate news in the domain industry. A class action suit was filed in Florida's Miami-Dade County Circuit Court by the

Cueto Law Group on behalf of lead Plaintiff Carlos A. Cueto and others who participated in online domain auctions conducted by Oversee.net subsidiary SnapNames. In the lawsuit Mr. Cueto alleges that an executive of the company conducting the auctions acted as a shill bidder to manipulate bids. Though not named in the Cueto press release announcing the suit, that executive has been identified as former SnapNames VP of Engineering Nelson Brady

The number of people who may join class auctions lawsuits of this nature will depend in part on how many customers that were defrauded accept cash (or credit) settlements currently being offered by SnapNames. Over the weekend the company responded to customer requests and made all of their historical bidding records available online. The most recent two years worth of records had been available but Brady's alleged actions reportedly began much earlier, starting in 2005. Prior to gaining access to all of their records customers couldn't determine if the settlements being offered covered all of the auctions they were victimized in. 

Nelson Brady
Former SnapNames VP accused of shill 
bidding in as many as 50,000 online auctions.

Customers are also weighing other issues with one of the biggest being accountability for the crimes that have been committed, beyond just a refunding of money they lost on the scheme. In the hundreds of comments that have been left on industry blogs and forums over the past few days, a recurring question is whether or not SnapNames is pressing charges against Brady in a fraud that looks like it will run well into seven figures. Thus far, the company has said it cannot comment on that at this point. One way or another, with the scope of the scandal being so large, it is hard to envision the case escaping the purview of law enforcement before all is said and done.

Brady has remained silent since Oversee announced they had discovered the fraud and were moving to reimburse SnapNames customers. His version of events is the proverbial "other shoe" that everyone is 

waiting to drop. If he does surface, will he accept the blame that has been leveled at him or will he paint a different picture of what occurred in an incident that had rocked the entire industry?

One other note today. We have just published our comprehensive review of the recently concluded T.R.A.F.F.I.C. New York domain conference. The article includes dozens of previously unreleased photos and details on conference events that we did not have time to cover in our daily Lowdown highlights from the show. This conference marked the end of an era as show co-founders Rick Schwartz and Howard Neu have now turned the T.R.A.F.F.I.C. reins over to Rick Latona, effective with the next event in the series, T.R.A.F.F.I.C. West, coming up in Las Vegas January 21-23

Latona intends to put his own stamp on the show. He took a move in that direction today announcing that he has secured 

T.R.A.F.F.I.C. Co-Founders Howard Neu 
(at podium) and Rick Schwartz welcome 
attendees to T.R.A.F.F.I.C. New York.

the services of Canadian domain investor/developer Rick Silver (N49.com) to moderate the five  T.R.A.F.F.I.C. conferences that Latona will stage next year. Silver caught Latona's attention when he spoke at the T.R.A.F.F.I.C. ccTLDs conference that Latona staged in Amsterdam this past June. In addition to being an excellent speaker with an impressive track record in domain development, Silver is a very personable guy who conference attendees will enjoy being around.

(Posted Nov. 9, 2009)


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