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The E-Sylum:  Volume 9, Number 11, March 12, 2006, Article 26

AUTHENTICATION CONTROVERSY AT COLLECTOR'S UNIVERSE

A March 3rd story by Barron's probed a controversy over
autograph authentication services by a unit of Collector's
Universe also touched on the firm's numismatic business.
As a public company the firm is followed by analysts and
subjected to additional public scrutiny.

"Credibility is our biggest asset and our reputation is the
core of our business," Michael Haynes, chief executive of
Collectors Universe, told a group of institutional investors
at a recent corporate seminar in New York.

Still, the lengthening list of allegations, along with the
effects of an eroding collectible-coin business, could start
to weigh on the shares of Collectors Universe, which has a
modest market capitalization of $130 million."

"Collector's Universe, based in Newport Beach, Calif., is one
of the largest players in its field. It provides services and
products to dealers and collectors of coins, sports cards,
stamps, autographs, sports memorabilia and more. In all, some
$1.3 billion of collectibles come under its review in the course
of a year, and annual revenues are running at $33 million. The
stock has been publicly traded since 1999."

"The bi-monthly Pen and Quill, put out by the oldest autograph
collectors' club in the world, has published what amounts to a
five-page indictment of PSA/DNA's authentication process,
entitled "Who's Watching the Watchmen."

"It has become apparent that PSA/DNA has some weakness in
authenticating autographs outside the sports field  as well
as some glaring oversights from within the sports area," writes
author Steve Zarelli, a member of the collectors club. "It's
not uncommon to see a PSA/DNA [expert] 'authenticating' an
autograph that is certainly not authentic."

Zarelli told of a collector who successfully bid for a game-used
bat belonging to Ernie Banks, complete with a certificate of
authentication from PSA/DNA. "What autograph?" Zarelli writes,
"The bat isn't signed by anyone."

"The controversy surrounding Collectors Universe hasn't
received much attention beyond the narrow audience for Pen and
Quill and the Manuscript Society News. But that could change
soon. Says Ken Lawrence, a stamp expert with the nonprofit
American Philatelic Society's expertizing service and a member
of the organizations that published both articles, "For both
these groups to be warning their members about Collectors
Universe at the same time is very unusual and very serious."

To read the complete article, see: Full Story

  Wayne Homren, Editor

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