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SnapNames: Former exec. bid up domain prices

SnapNames, the largest reseller of Web site names, Wednesday alleged that a former top executive secretly bid on tens of thousands of domain name auctions over the past four years, driving up costs for other bidders and enriching himself in the process.

SnapNames owner Oversee.net said it learned about a month ago that the executive had been bidding on its domain auctions in violation of company policy that bars employees from doing so.

Mason Cole, vice president of Oversee corporate communications, said the executive was dismissed Monday.

The company Wednesday began notifying affected customers via e-mail, stating that "in every auction where the employee's fictitious account submitted a bid which resulted in a higher price being paid by the winning bidder, SnapNames will offer a rebate, with 5.22 percent interest (the highest applicable federal rate during the affected time period), to affect customers for the difference between the prices they actually paid and the prices they would have paid, had the employee not bid in the auctions."

The message to customers said the bulk of the bidding occurred on auctions between 2005 and 2007, but that the employee's bidding affected about 5 percent of total SnapNames auction since 2005. In addition, Oversee said the incremental value from the bidding represented approximately one percent of SnapNames' auction revenue during that same time.

Cole said as many as 50,000 domain name auctions may have been affected by the employee's unauthorized activity. Cole declined to say what legal steps, if any, Oversee planned to take a result of the incident.

"He had pretty deep insight into our system," Cole said of the former executive. "I don't know whether he was one of the founding employees [at SnapNames], but he was one of the first."

Oversee alleges that the employee made the bids using an auction account set up under the alias "Hank Alvarez". The company says that in certain cases where the employee won the action, he paid for the domain and then arranged to refund a portion of the winning bid amount to his account.

By Brian Krebs  |  November 4, 2009; 5:10 PM ET
 
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Comments

Sorry, I don't believe this.

Until a court proves otherwise, I'll believe the employee (who, btw, is brilliant enough to make a substantial legit income) was the company's scapegoat for about-to-be-uncovered illegal activities.

Posted by: marcialynn1 | November 4, 2009 8:41 PM | Report abuse

Well, for sure it happened. but the bidding was done automaticly by a time interval.

also, on domain names where nobody on the planet could know it was expired.

thus, he/she directly could have connected the database of new bids. and this is prove he/she came from inside out the company.

i was screwed with this, because i was the sole bidder, in that case, the domain name should have gone immediatly to me, but because this Alvarez snapnames internal account, i was not anymore the sole bidder, thus the bidding remained for 3 days open. thus enabling other people to have knowledge about the existance of the expired domain name. and THAT is not what i asked for when going to snapnames.

i got luck afterwards i this computer bidding virus app internally did not made any more bid as the first increased bid it made obviously automaticly

what a shame for such a large company

it's something so cliche to expect of the worst case scenario, and yet, it's like that.

as suppose someone inside netsol suddenly gets your domainname legally

thats freaky scary

same this twisted sick mind who wrote that program inside snapnames system

i believe it's true and oversees is innocent

probably victim, because of the higher faked volume of snapnames in the merger

Posted by: mennoderuiter | November 4, 2009 10:42 PM | Report abuse

Signing in tonight using Ubuntu 9.10 disk only.

Unfortunately somedthing similar happened with domain names ending in Realtor. Ubuntu thinks that I have incorrectly spelled Realtor. LOL

When I first tried to get brucerealtor.com some organization in California was holding the cake. Then the NAR sued some high school kids and won where the court's holding was, not surprisingly, anything connected with Realtor was their trademark. When I threatened litigation, I was ignored but at the expiration of the term, it was released.

No experience with SnapNames.

Posted by: brucerealtor@gmail.com | November 5, 2009 2:25 AM | Report abuse

Yet another example of greed gone wrong that invites my sarcasm!... Come on, what's wrong with a little good old fashioned "gaming the system" opportunity in our free, open, unregulated capitalistic system?

We have too many examples like this that demonstrate now the law of the land in America is, "Do What Ever You Can Get Away With." Why it would be positively socialistic to try to legislate against such expression of free enterprise.

Posted by: jcluma | November 5, 2009 11:34 AM | Report abuse

I guess the real liability comes in if the company didn't do anything to prevent this from happening from his office. Like preventing registration or logins from the companies' IP range or something like that. Or running a credit card name check against an employee database or something like that.

If it is not the big deal there claiming what was the incentive for him to do it?

marcialynn1's point is kind of interesting because they found this later? That seems just a bit odd what kind of audit would turn that up. Were they trying to implement security precautions and then caught this guy's fraud?

Interesting article BK.

Posted by: dward__ | November 5, 2009 12:04 PM | Report abuse

I purchased several domains from snapnames and I'm interested to see how the company deals with this.

Posted by: actioninutah | November 6, 2009 2:04 PM | Report abuse

Call Craig Snyder, President of Snapnames and demand your money back.

Call him out for his scam.

Cell 206-718-3288
Phone 503-459-5205

Posted by: whataduche | November 6, 2009 5:23 PM | Report abuse

I lost so much money I will murder Nelson and his kids.


Craig Snyder, you better watch your family. They are next.

Posted by: whataduche | November 6, 2009 5:40 PM | Report abuse

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