May 30-June2 Pre-Long Beach Auction (#59) 05/30/2010 10:00 AM PDT CLOSED! Buyers Premium of 20.00% added to each and every lot

Lot 817 of 4106:
Lincoln Cent. 1959-D The Unique Wheat Ears Reverse!. MS60  

Click image to enlarge
Lot closed - Winning bid:$27,000
Description:

Lincoln Cent. 1959-D The Unique Wheat Ears Reverse! MS-60+. Brown. This coin has created quite a bit of controversy in the past, and it's time the allegations and innuendo get laid to rest. For some reason, the few independent grading services who have examined this coin can't seem to decide on its genuine status, although no one can define any reason to consider it counterfeit, they also won't render an opinion to support the coin as a genuine mint product. Hence, the opinions of most remain that no decision can be made on the coin unless further tests are conducted.

The known history of this unique cent begins in 1986. A retired police officer named Leon Baller advertised in his local Walnut Creek, California newspaper that he would purchase rare and unusual coins. A local coin collector saw the ad and contacted Baller about an unusual 1959-D wheat reverse cent that he had found, and Baller soon arranged to meet with him and then purchased the coin for $1,500. Baller sent the coin to the United States Department of the Treasury for authentication in early 1987. Jim Brown, a forensic lab authenticator for the Department of the Treasury examined the coin and found no indication that it was counterfeit. The coin was returned to Baller on February 7, 1986 with a letter signed by Richard M. McDrew,
Special Agent for the Department of the Treasury. The letter states as follows:

"Enclosed is your United States 1¢ coin, dated 1959-D, with wheat reverse. This coin was microscopically examined by our Forensic Services Division in Washington, D.C. and it is their opinion the coin is genuine."

Baller eventually sold the coin to Heritage Rare Coin Galleries in 1987. The cent was then sold to a private collector where it remained until recently.
The current owner of the coin is a business syndicate whose members' names have not been disclosed, and their representative is Larry Choate, a Southern California collector. Choate took the bold move in 2002 to resubmit the coin to the Department of the Treasury and Secret Service for a more comprehensive review of the 1959-D wheat cents authenticity. Choate realized that if the coin was considered a counterfeit, it would be seized and destroyed. In addition, Choate took the risk that the coin was produced at the Denver Mint but illegally spirited out, and could be seized on those grounds as well. Frankly, the Department of the Treasury has a checkered list of such seizures, and only a few coins have been seized over the years. It is important to note here that this coin will not be confiscated as the Treasury Department has returned the coin twice to the owner after reviewing the coin and returning it as genuine. It is also considered legal tender by the Treasury Department.

The most recent and very public seizure was the 1933 double eagle which the Government seized and wanted to destroy in a mindless bureaucratic fashion. Mercifully for collectors, the original owner of the 1933 double eagle was Egypt's King Farouk, and he obtained an export license which allowed him to take the coin with him out of this country to Egypt. After protracted litigation, the government and owner of the coin, British dealer Steve Fenton, agreed to have the coin sold and the proceeds would be divided. Thus, the Farouk 1933 double eagle would be the only currently "legal" specimen that could be obtained. Rumors have long swirled that other 1933 double eagles exist in private collections, but the Government claims title to any that may be in private hands and they would be seized if found as Government officials have publicly stated. This unique rarity just sold for $7,590,020. at auction in July 2002.

In recent years a bonanza of mint "errors" have turned up in collectors hands. Some of these have included error commemorative gold coins which were so mistruck as to not fit into the government holders. Another example would be the recently released Sacagawea/Quarter mules, or even the 1964 Peace silver dollar. Rumors persist, and in some cases these coins would be seized if they appeared at public auction. Normally, years after the original production, the probability of seizure seems to drop, and the seizure cases normally involve coins that were illegally removed from the mint where the perpetrators can be rounded up and jailed after due process, as the coins were simply not just normal production errors which escaped into circulation.
These distinctions are important, because if a coin is seized, it is seldom returned and any value paid for the coin would be lost. Under such circumstances, the Government goes after the mint employees involved, and many have been arrested and prosecuted for these crimes.

Getting back to our 1959-D cent, Choate knew that he was taking a big risk by submitting this coin back to the United States Secret Service, as it could be seized if it was determined to be a counterfeit, or illegally taken from the Denver Mint. However, after extensive examination by the United States Secret Service Office of Investigations Counterfeit Division a report was issued dated May 17, 2002, under their case number Log: 119-726-FY2002-018.
This report, which of course accompanies this lot, states as follows:

"Exhibit Examined Q1 One 1959-D Lincoln cent, bearing the wheat reverse, described on the subject letter."

"Background: From 1909 until 1958, the United States Mint cent bore a portrait of President Lincoln on the obverse and two curved stylized heads of wheat on reverse. In 1959, the design was changed to bear the Lincoln Memorial on the reverse."

"Results of Examination Physical and microscopic examinations were conducted on the submitted Lincoln cent (Exhibit Q1; see figure 1). [photo of obverse and reverse].

Page 2:

"Optical and scanning electron microscopic examinations conducted on the submitted coin (Exhibit Q1) revealed that the coin's obverse does not exhibit any indications of alterations to the date or surrounding field (see figure 2). [two scanning electron micrographs of the final 9 of the date are included, the first is enlarged 180 times, the next is enlarged 200 times].

Below these photos the report continues: "Enlargements show no indications of alterations--metal shows smooth transition from numbers to the field. An alteration at these magnifications would be evident by tool mark striations or seams with solder or glue. Alteration from within the coin (embossing) would result in less defined numerals and disturbances on the surface of the numerals."

The report goes on:

"Further, the edge and rim of the submitted coin (Exhibit Q1) was examined for evidence of seams or alterations that would suggest that the submitted coin was a composite of a 1959-D obverse with a separate wheat reverse (see figure 3)." "Figure 3: Micrographs of the rims of the submitted coin (Exhibit Q1)" show the obverse rim near the W of WE, and the reverse rim near a wheat ear and are magnified 60 times. Below the micrographs the Report states: "Enlargements show no indications of alterations or seams. The metal shows smooth transition from the field to the rim and then to the edge. An alteration at these magnifications would be evident by tool mark striations or seams with solder or glue."

Page 3 continues:

"No evidence of manipulation or alteration to the edge of the submitted coin (Exhibit Q1) was observed (see figure 4)." "Figure 4: Optical micrograph of the edge of the submitted coin (Exhibit Q1)" which shows the edge of the coin and concludes: "Enlargements show no indications of alterations or seams in the edge. The metal appears undisturbed, as does the oxidation (toning). An alteration at these magnifications would be evident by tool mark striations or seams with solder or glue."

The Report next examines the die polish lines as follows: "The submitted Lincoln/wheat cent (Exhibit Q1) displays prominent die polish (raised striations in the field, but absent in the raised devices) on the obverse and reverse (see figures 5 through 7). During the course of examination, the subject coin was compared to one 1959 cent and two 1959-D cents that had similar die polish on the obverse. No significant differences in the appearance of the polish were observed." Two greatly enlarged micrographs of the field and ERTY follow: "Figure 5: Optical micrograph of the die polish on Exhibit Q1 and Figure 6: Optical micrograph of the die polish on Exhibit Q1."

Page 4 continues: Figure 7: Optical micrograph of die polish on the reverse of submitted coin (Exhibit Q1)" with a very large micrograph of the central reverse which shows die polish lines in the field.

The Report continues: "Nondestructive physical examinations conducted on the submitted coin (Exhibit Q1) revealed that the coin is consistent in mass, diameter, and thickness of genuine 1958/1959 cent coins. Additionally, surface measurements by energy dispersive x-ray spectroscopy revealed that the coin is consistent in elemental composition with genuine 1958/1959 cent coins (see table 1).

"Table 1: Composition, diameter, thickness, and Mass of Exhibit Q1
Exhibit Cu(%) Zn & Sn (%) Diameter (mm) Thickness (mm) Mass (g)
Genuine* 95.0 5.0 19.05 1.58 3.11
Q1 ~95 - 97 ~3 - 5 19.1 - 19.2 1.5 - 1.6 3.09
*The numbers presented in this row are the Mint specifications for genuine 1947-1962.

Given this evidence, the Report goes on:

"CONCLUSIONS"

"Although the submitted 1959-D Lincoln Cent (Exhibit Q1) exhibits the wheat reverse, instead of the Mint specified memorial reverse, the submitted coin exhibits physical characteristics, such as device detail, metal flow, die polish, thickness, diameter, mass and composition, consistent with genuine 1958/59 Lincoln cents. Further, the submitted Lincoln/wheat cent does not exhibit any indications of alterations to the date or evidence of edge alteration, indicating that the submitted coin was a result of combining two genuine coins. Additionally, no characteristics associated with counterfeit coins, such as tool marks, file marks, raised metal or unusual oxidation ("toning") were observed."

Page 5 begins:

"In the absence of any evidence that the submitted 1959-D Lincoln/wheat cent (Exhibit Q1) is not consistent with having been manufactured by the US Mint, the coin was determined to be a genuine mule cent."

The page continues with remarks which discuss the way the coin was handled, and the fact that it was returned to the owner, and the Report was signed by Marc J. Surrency, Counterfeit Specialist and Approved by Anthony M. Chapa, Special Agent in Charge.

In another specialized reference work, The Authoritative Reference on Lincoln Cents by John Wexler and Kevin Flynn, the authors devote 3 pages to this coin. They note that in 1993 this coin was submitted to the ANA for authentication. Michael Fahey, the examiner at the ANA "could find no evidence of it being counterfeit. However, because there was no evidence the Mint could have produced it and it is hard to conceive how this could happen accidently. Since only one specimen has ever been found, the ANA returned the coin with a "no decision". J.P. Martin, chief authenticator for the ANA, said that when he examined the coin he could not find any evidence that the coin is counterfeit, but also stated that his gut instinct is that the coin is not genuine." J.P. Martin followed up with a letter which is quoted at in full in the Wexler Flynn reference, and we quote the relevant portion here "All in all, the attention given to the die as shown by the die polish is the most bothersome. I challenge any readers to match the shown die polish to the 1959-D obverse or the wheat reverse. Though this piece appears to be suspicious, no absolute technical condemnation can be made. Especially without a comparison example from the same dies. For this reason, the coin was given a "No Decision" by American Numismatic Association Authentication Bureau. This was circa 1993. Since that time, J. P. Martin has left the ANA to be one of the founding partners of the ICG grading service.

J.P. Martin here touches on what will likely resolve the questions swirling about this controversial coin. In 2002 when Larry Goldberg discussed the coin with Rick Montgomery, he said that if other Lincoln cents of the 1958-D reverse and 1959-D obverse dies were submitted, there is a better chance the mule coin could get graded. Given the obvious die lines on the present mule specimen, it should only be a matter of searching to locate matching dies to both the obverse and reverse! It is very unlikely that new dies were used just to coin this one specimen, and the dies were very likely normal production dies which happened to be available when the new reverse was being adapted by the mints.

Okay, let's do some simple math. Walter Breen states in his Encyclopedia that die life for Lincoln cents produced during this period was around 700,000 coins per die (page 233). Mintage for 1958-D cents (it being reasonable to assume the reverse die would have been a 1958-D) was 800,953,000 divided by 700,000 coins per die equals approximately 1,145 dies. Now, let's do the obverse die, 1959-D mintage was 1,279,760,000 divided by 700,000 equals 1,828 obverse dies. Well, while daunting, the task at hand is not insurmountable! Examining circulated coins will not work (I tried that), as the die lines quickly disappear after limited circulation. Thus, this endeavor will best be completed by purchasing bags and bags of 1958-D cents (about $5 per roll of 50 coins) and bags and even more bags of 1959-D cents (about $1 per roll) and quick examination of the coins will hopefully produce an exact match to the unique die lines seen as a signature on this coin. Matching the two dies from regular issue coins to this mule piece will prove that the coin was struck from genuine Denver Mint dies, and given the absolute assertion that the coin is genuine by the United States Secret Service Counterfeit Division it would be hard for anyone to refute the coins authenticity. Once the dies are matched up, we are confident the grading services will have to certify and grade the coin as a genuine Mint product.

How did this coin come about? It is very difficult to imagine that somehow just one slipped out and got into circulation, although anything is possible given the massive production of coins each year at the Mint (stranger things have happened). It was more likely made during a quiet moment at the Denver Mint, under similar circumstances to the one known 1943-D copper cent, a special striking as it were, not unlike dozens and dozens of other famous rarities produced during the last 209 years at the various United States mints.
Valuing this unique cent is virtually impossible. We feel confident that it will bring less than the similarly unique 1933 double eagle at $7,590,020. Perhaps it will bring a price similar to the unique 1943-D copper cent, which realized $82,500 way back in 1996 at a Superior Sale, or the more current example of the extremely rare 1943-S copper cent which was NGC MS-61 Brown which realized $115,000 in our February 2000 Sale.

For those out there in coinland who have the time and inclination, the dies could quite possibly be matched up just from the photos in the Wexler Flynn reference, or from the photos in this catalog, prior to the auction of this coin in September. If there isn't time, it is likely the matching dies could be found and the coin resubmitted with the additional evidence and a copy of the Treasury Report.

In particular, please note the die lines which should be easy to match up when compared with other mint 1958-D and 1959-D cents, on the obverse look for the die line which connects the lower loop of the B in LIBERTY to the upper half left side of the upright of the E. The reverse is very easy to identify, there is a long die line from the middle serif of the F in OF up to the center of the upright of the E in CENT. Also, we note two or three parallel die lines extending down at an angle from the left wheat ear near the top. These are very clearly visible on the coin under magnification, and are also seen in excellent detail on page 335 of the Wexler Flynn reference book.

While controversial, this coin seems to be turning the tide in its favor with the Treasury Report, and with a little research, could soon be die linked to other existing 1958-D and 1959-D cents, which will likely lay the controversy to bed, and the coin can finally be accepted by the grading services and other experts in the Lincoln cent series.

As the controversy still swirls around this mule, the major grading services have chosen NOT to grade this coin as of yet. Nevertheless, we feel that if someone took the time to locate other examples of the obverse and reverse dies which were used for normal production coins, combined with the more thorough Secret Service Authenticity Report of 2002, there would be a better chance that the coin may get graded in the future.

The property is not guaranteed to be authentic, and is marketable as is, and can not be returned.
Estimated Value $40,000 - 50,000.
Ex: Goldberg Sale #17 Lot 159 Feb 2003 realized $48,300.


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ALL ITEMS OFFERED IN THIS
CATALOGUE ARE GUARANTEED TO BE GENUINE.

THIS IS A LIMITED WARRANTY THAT THE ITEM SOLD IS NOT COUNTERFEIT, THAT ITS
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29 Any other warranty is expressly disclaimed; Goldberg offers no
representation that a numismatic item has or has not been cleaned; that any
toning is natural or artificial; that any coin will meet the standards or
grade of any independent grading service; that any item has a particular
provenance or pedigree, or that a numismatic item is struck or produced in a
particular style. Any statement concerning such matters reflects an opinion
only. Questions regarding the minting of a coin as a proof or as a business
strike relate to the method of manufacture and not to authenticity.

a. The descriptions contained herein represent the Cataloger’s good faith
opinion, or the opinion of an independent grading service, as to the state
of preservation and strike. When a grade from an independent grading
service is utilized, the information is provided strictly for the
convenience of the bidder by mail, telephone or facsimile. Bidders and
Purchasers acknowledge that (i) grading is an art, not a science; (ii) the
grades contained in the catalogue represent the opinion of the Auctioneer
based upon its experience; (iii) it is possible that two people will not
always grade the same items alike; and (iv) as market conditions change,
grading standards change, and will most likely continue to do so in the
future.


NO WARRANTY, WHETHER EXPRESSED OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY, IS MADE WITH RESPECT TO ANY GRADE DESCRIPTION, WHICH IS
MERELY AN OPINION THAT IS LIKELY TO DIFFER, EVEN AMONG EXPERTS. PURCHASER
HEREBY ASSUMES ALL RISKS CONCERNING AND RELATED TO THE GRADING OF A LOT BY
AN INDEPENDENT GRADING SERVICE.


b. Grading or condition of rare coins may have a material effect on the
value of the item(s) purchased; and the opinion of third parties (including
independent grading services) may differ from the independent grading
service’s opinion or interpretation of Goldberg. Goldberg shall not be
bound by any prior or subsequent opinion, determination or certification by
any independent grading service.

c. All oral and written statements made by Goldberg and its employees
(including affiliated and related companies) are statements of opinion only,
and are not warranties or representations of any kind, unless stated as a
specific written warranty, and no employee or agent of Goldberg has
authority to vary or alter these Terms and Conditions of Sale. Any
alteration shall be effective only if in writing and signed by an officer of
Goldberg authorized to do so.

d. Bidders shall have no recourse against the Consignor for any reason
whatsoever.

e. Notwithstanding anything to the contrary in these Terms and Conditions of
Sale,

COINS LISTED IN THIS CATALOGUE GRADED BY PCGS, NGC, ICG, SEGS, ACCUGRADE,
PCI, NTC OR ANACS CACHET MAY NOT BE RETURNED FOR ANY REASON WHATSOEVER.



30 By bidding in the sale, (whether in person, by mail, telephone or
facsimile, or through an agent), Bidder expressly consents to the following

Waiver and Releases:
Purchaser, for himself, his heirs, agents, sucessors and assigns, generally
and specifically waives and releases, and forever discharges Goldberg, and
its respective affiliates, parents, shareholders, agents, subsidiaries,
employees, members of their respective boards of directors, and each of
them, and their respective successors and assigns from any and all claims,
rights, demands and causes of action and suites, of whatever kind or nature,
whether in law or equity, whether known or unknown, suspected or
unsuspected, which Purchaser may claim to have with respect to and/or
arising out of, or in connection with any challenge to the title to any good
purchased, the sale itself and/or the auction, except for reimbursement in
the amount equal to any bid actually paid by Purchaser, plus any Buyer’s
Commission actually paid by Purchaser where such reimbursement is authorized
in these Terms and Conditions of Sale. It is the intention of Purchaser that
this waiver and release shall be effective as a bar to each and every claim,
demand, cause of action and suit that may arise hereunder, and Purchaser
hereby knowingly and voluntarily waives any and all rights and benefits
otherwise conferred upon him by the provisions of the California Civil
Code, which reads in full as follows:


“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”

31 Neither Goldberg nor any affiliated or related company shall be
responsible for incidental or consequential damages arising out of any
failure of the Terms and Conditions of Sale of the auction or the conduct
thereof and in no event shall liability for any such failure exceed the
purchase price paid.

32 The sole remedy that any Purchaser in the auction shall have, whether
such Purchase is bidding in person, by mail, by facsimile, by telephone, or
through an employee or agent, for any claim or controversy arising out of
the auction shall be a refund of the original purchase price and premium
paid, if any.

33 Upon payment of any disputed sum, which in no event shall be greater than
the original purchase price actually paid by Purchaser plus any commission
or premium actually paid by Purchaser to Goldberg, Auctioneer and its
employees shall be deemed released from any and all claims of the Bidder
arising out of or in connection with the sale of such property. Purchaser
agrees to execute prior to delivery of any refund, any documents reasonably
requested to effect the intent of this paragraph. Should the Purchaser
decline to do so, Purchaser hereby grants to Goldberg a limited power of
attorney to unconditionally effect such release.

34 Rights granted to Bidders and Purchasers under these Terms and Conditions
of Sale are personal and may not be assigned or transferred to any other
person or entity, whether by operation of law or otherwise. Any attempt to
assign or transfer any such rights shall be absolutely void and
unenforceable. No third party may rely on any benefit or right conferred on
any Bidder or Purchaser by these Terms and Conditions of Sale and terms of
warranty. “Purchaser” shall mean the original Purchaser of the property
from Goldberg and not any subsequent owner or other person who may acquire
or have acquired an interest therein. If Purchaser is an agent, the agency
must be disclosed in writing to Goldberg prior to the time of sale,
otherwise the benefits of the warranty shall be limited to the agent and not
transferable to the undisclosed principal.

35 If the Purchaser fails to comply with one or more of these Terms and
Conditions of Sale, then in addition to all other remedies which it may have
at law or in equity, Goldberg may at its sole option, either (a) cancel the
sale, retaining all payments made by Purchaser as liquidated damages, it
being recognized that actual damages may be speculative or difficult to
compute, or (b) sell some or all of the property and (some or all other
property of the Purchaser held by Goldberg, if Goldberg deems necessary), in
a quantity sufficient in the opinion of Goldberg to satisfy the
indebtedness, plus all accrued charges. More than one such sale may take
place at the option of Goldberg. Such sale may take place without notice to
Purchaser. If Goldberg gives notice, it shall be by U.S.P.S. Certified
Mail, Return Receipt Requested to the address utilized on the Bid Sheet,
Auction Consignment and Security Agreement or other address known to
Goldberg. Such sale will be at Goldberg standard commission rates at public
or private sale, within California, or at another location outside of
California to be determined by Goldberg. At the time of sale the defaulting
party shall not bid nor be permitted to bid. The proceeds shall be applied
first to the satisfaction of any damages occasioned by Purchaser’s breach,
and then to the payment of any other indebtedness owing to Goldberg,
including without limitation, commissions, handling charges, the expenses of
both sales, reasonable attorneys’ fees and costs, collection agency fees and
costs and any other costs or expenses incurred thereunder. If a lot or item
is not paid for, and is sold by Goldberg for Purchaser’s account, in
accordance with the Uniform Commercial Code, Goldberg shall not be required
to account to the Purchaser for any excess proceeds. Purchaser shall remain
liable to Goldberg if the proceeds of such sale or sales is insufficient to
cover the indebtedness. If other property of Purchaser is also sold, any
excess of proceeds will be remitted to the Purchaser after first deducting
the expenses set forth above. If Purchaser fails to remit sums due to
Goldberg, Purchaser grants to Goldberg a lien with respect to such sum, with
interest to accrue thereon at the legal rate, until actually paid, which
lien shall apply against any property of Purchaser, including any future
goods of Purchaser coming into possession of Goldberg. To the extent
permitted by law, Purchaser hereby waives all the requirements of notice,
advertisement and disposition of proceeds required by law.

36 These Terms and Conditions of Sale and the auction shall be construed and
enforced in accordance with, and governed by, the laws of the State of
California, whether or not the auction is and these Terms and Conditions of
Sale are fully performed in California.

37 Purchaser acknowledges and agrees that the competent courts of the State
of California shall have exclusive jurisdiction over any dispute(s) arising
hereunder, and Purchaser hereby agrees that any dispute arising hereunder
shall be l itigated exclusively in the courts of the State of California,
and not elsewhere, regardless of any party’s current or future residence or
domicile. Purchaser further agrees that venue shall be in the Superior
Court of Los Angeles, in the State of California.

38 ATTORNEY FEES AND COSTS. The Bidder/Purchaser shall pay to Goldberg all
costs and expenses of collection of amounts due herein, or to otherwise
enforce any or all provisions of these Terms and Conditions of Sale, the
subject matter of these Terms and Conditions of Sale, or any other agreement
entered into with Goldberg, including but not limited to, reasonable
attorney fees and costs incurred before legal action, if any, is commenced.
The Bidder/Purchaser further agrees that in any litigation or other
proceeding based upon, arising out of or related to these Terms and
Conditions of Sale, the Bidder/Purchaser shall pay to Goldberg its attorney
fees and other expenses and costs incurred in connection with the litigation
or other proceeding if Goldberg is the prevailing party.

39 If any section of these Terms and Conditions of Sale or any term or
provision of any section is held to be invalid, void, or unenforceable by
any court of competent jurisdiction, the remaining sections or terms and
provisions of a section shall continue in full force and effect without
being impaired or invalidated in any way. AS STATED IN THE TERMS AND
CONDITIONS OF SALE Certain lots may be reserved by the Consignor. If the
Auctioneer identifies a Consignor bidding on his own property, an
announcment will be made that the Consignor is now bidding. If the
Consignor places a bid in the mail bid book and is successful, the
Auctioneer will announce that the lot has been passed.
40 These Terms and Conditions contain the entire agreement and understanding
between Goldberg and Bidder concerning the auction and any items bid on or
purchased at the auction. Bidder acknowedges that Goldberg has not made any
promises, representations or warrantee to bidder, not contained herein
concerning the auction and any items bid on or purchased at the auction.