Ok, if the parties will agree on the settlement it closes this civil/labour lawsuit.
What happens then with allegations like money laundering and tax evasion? I know at this stage the guilty is yet to be proven, but lawsuit's body has some points in that matters which are hard to ignore.
Would court forward this allegations to tax office and, well I am not sure who is combating money laundering, SEC I guess?

 

jinx?

State/Federal law enforcement can prosecute regardless of status of this civil suit (or whether the civil suit manages to prove anything).

If the AD is indicted by the Fed, that would be something (Fed prosecutors tend to like to win, and so pick their battles accordingly).

 

I had a friend of mine who was a jeweler and was brought into something similar to this- he knew he was doing something “questionable” but looked the other way (the money was insane). Little did he know he was a small cog in a larger interstate operation that the FBI had been watching for some time- 4 years in a federal pen. They don’t fuck around.

 

C.D. Peacock Inc. did receive $350,000-$1,000,000 in PPP cash due to the hardships of the Virus. Public record.
PPP money was handed out like candy with no real income or worth guidelines. Just my viewpoint for a searchable net worth of about 3 mil. Huh, Chairman of Destination XL net income $42 mil. Can buy a share of the OTC stock for about 68 cents.

Boy, some of these guys are pals of big cheeses in the political world. This will be interesting to follow when things are slow.

After further review, my guess Suzana Krajisnik will be reamed on the witness stand. Plaintiff asked for the jury trial.

Public record again..

“Seymour is a world-renowned businessman with a lifelong passion for fine jewelry, timepieces and art,” said Victor Herrera, vice president of new-store development for Rolex Boutique Luxury Swiss LLC.

Good luck with believing Rollie will flip on Seymour.

I like this quote from a Palm Beach newspaper.... “He is in daily contact with the store, to which he makes weekly trips in order to keep an eye on his investment.”

Makes it hard to say “hey, I didn’t know nuttin”

 

Zero chance this goes to a jury. CDP will settle. The last thing they want is a jury of "regular people" looking at a pretty young lady who claims she was fired simply for exposing to her (probably male) bosses about the RICO involving 5-6 figure luxury watches and the collaboration of upper management with a Chinese national on a suspect student visa. With all that's going on in the country, not the right environment at the moment to risk a jury trial (even if you do feel she was fired with cause). The general consensus is that the pandemic has been very good to the ultra wealthy, and devastating to much of the middle and lower class. Nothing symbolizes excess to many more than luxury watches. I wouldn't give the jury a chance to metaphorically "stick it to the man".

 

What I think is really interesting with this whole lawsuit that it gives really insights in how some ADs work.

As a watch dealer you hear crazy stories in the trade and also from collectors. I have heard a very interesting story from a person from country A who flipped his Rolex after a couple of months of ownership to a dealer in another country B. 2 or 3 months later this collector got an angry sales rep from his AD in country A on the phone that his watch that he bought well above list price was sold abroad on a local classifieds site in country B (the seller who made the classified made a mistake to show the ADs name). So what happened? A Rolex representative from the country B were this flipped watch was sold on a classified page saw this classified, contacted this AD in country (A) to give this AD a hard time; there were similar threats to this sales person that she got fired etc. The client even got a really hard time from his sales person from the to him highly valuable AD and was taken off the "list". It took him months of #ss kissing and a couple of presents to get back on this list.

What i think is very interesting to say the least is the attitude of the Crown against this. I once used to work at a local market and sales department for the biggest worldwide spirits company. Within the sales department the sales reps responsible for the trade accounts were very well aware of the grey market. I tend to belief that a top tier luxury company can easily put a number on the turnover amount per region, country and perhaps even on a client level sold to the grey market.

So I belief these kind of events happening to supply the grey market will inevitably command a new sales strategy cause in the long run it will negatively affect the brand equity due to the risk of getting a connotation with criminal behavior.

Many brands have already integrated vertically to take more control. It's a bit a pity for those ADs who tend to behave. The good guys suffer from the bad and the ugly.

In all honesty as a watch lover I really think it is valuable to have an independent AD were you can compare and get a kind of independent advise for what its worth.

 

Thank you for sharing this story Wouter... which actually clearly demonstrates what is broken with Rolex ADs: even when they catch one of these “collectors” flipping watches, they still reinstate them on their “preferred list” after some a$$ smooching.

It actually warms up (a bit) my heart to read that Rolex is at least trying to identify culprit ADs and follows up with them.

In general, I don’t understand why Rolex can’t buy some hot watches (meaning, a watch that was just purchased these last two months and already up for sale with a mark up) at some of the famous grey sellers we are all aware of, check the serial numbers and ban whichever AD to which the watch had been shipped in the first place.

Make a few of these instances known on a “Rolex hall of shame”... and voila!!

Of course, this is all predicated on the fact that Rolex really wants to fix this issue...

 

Seems this idea runs into a legitimate and longstanding issue: regular people who simply don’t fall in love with their new watch (and can’t return it).

 

it is even worse, please read carefully: "his watch that he bought well above list price" so this authenticated dealer sells rolex pieces well above list price since they don't want to miss the money what is earned at the grey market. they actually prefer to get that extra margin themselves. And in all honesty I can't blame them. Most collectors and luxury snobs all go crazy about every silly Rolex detail and belief the hype, its the in-equilibrium of supply and demand that creates this hype. Rolex can do 2 things to solve this issue. Produce more pieces or integrate vertical to get more control on the allocation of their limited supply.

it is a free market. difficult to fight against it. of course they have their rules in their sales agreement and they can try to enforce these rules, but then they should throw out even perhaps 50% (?!) of their AD's.

The multi-brand AD model is really under pressure. Most likely even more brands will have their own boutiques where they can control the brand look and feel and the allocation of their stock. When you call an AD for a LE most of the times these pieces are not available since the brands themselves prefer to sell these hot items at their boutiques (for example Cartier).

 

Why on earth would Rolex stop this? The current situation allows them to push people to buy whatever Rolex model is in stock in order to get the “precious” that those people must have for their Instagram photos. Watches that once languished in the display cases are getting sold like never before. This is all gravy for big green...

 

I agree with you... and although it must be a minute proportion of people, from a legal point of view, I understand the conundrum.

 

Fully agree with you Al, but in the end, Rolex is leaving a lot of $$$ on the table of ADs and other grey sellers...

As Wouter said above, maybe it will lead to more and more vertical integration. Who knows.

 

You are absolutely right Wouter, I completely skipped over this critical piece of info… which definitely jacks up the severity of this AD’s practices, which are clearly in breach of Rolex’s rules.
Surely the “collector” who benefits from this practice will not complain to the Rolex rep.
What a mess!

Good thing I am more focused on Omega, a truly customer-friendly brand, and transmitting these values to the next generation.

 

Im not sure I understand. How is Rolex leaving money on the table? Even if they raised their own prices, the grey’s would just raise theirs. Rolex could attempt to flood the market with more stainless steel professional models and they would sell well at first, and then the demand would wain. I read a post on another forum not long ago talking about how the Tudor 58 blues seemed to be everywhere now. The responses were that production continues at full speed and eventually the people that want them, buy them. The OP stated that prices were dropping and now the watch seemed less desirable. It’s human nature to want something that is hard to obtain. People like to think their Batman or Hulk is a limited edition, low production watch, and Rolex doesn’t overtly dispute this by using random serial numbers. The reality is that they likely make 65,000 a year of these models.

It’s hard to argue with the Rolex model now and when customers are forced to bundle, everybody wins.

 

There’s Rolex and a few other manufacturers, who have successfully implemented this smart and profitable business model of increasing brand value.

Then there are all the other manufacturers who are attempting to emulate the model (or don’t even try bc know they can’t succeed).

Then people rag on Rolex (essentially for being good at it), while acting like their favorite brands are somehow morally superior (as opposed to being unable to emulate but wishing they could).

These are luxury watch businesses folks; not public utilities.

 

I certainly agree with you that Rolex, Hermes, have successfully built terrific brand image and value, and, in turn, implemented a very profitable business model. Although I still think that they are leaving some money in the table, I also fully comprehend that their practices are pushing people to buy less desirable and PM models, so all fine for them.

I nevertheless do think that some of the shady ADs and other grey seller practices are building long term negative perception (resentment) against the Rolex brand, but only time will tell (no pun intended) if that will hurt their business or not. I have nothing against Rolex per se, and while I do currently enjoy some of their watches myself, I have now written them off from any future purchase as I don’t like dishonest people and shady practices, that’s all. Same goes for Hermes, Porsche, AP, etc.

Lastly, I think you are going too far by translating my comment on the “friendliness” of some brands as me seeing them as “morally superior”. I am not naive and fully understand that it is a business in the end, not a philanthropic endeavor. Having said that, I really appreciate the friends I have made along the way at Omega.

 

Rolex is the best and most consistent marketing and PR machine out there. They have been the most valuable watch brand for ages. They only spend mkt money on the best of the best. My point is that this whole lawsuit isn't very classy. It really has an effect on the immaculate well-maintained image of the rolex brand. And it would not surprise me that this case could become quite pivotal for the whole hype situation.

If I would be CEO I would do some serious damage control. Don't get me wrong but I really love the brand. Bought my first vintage Rolex Datejust (a two tone which was completely out of fashion at that time) at a certain age in my life to mark a milestone. But by no means I am going to begg or kiss #ss to get any kind of watch. Thats beyond ridiculous in my own book although I am fully aware and know that this attitude wont get me some particular pieces. There are roughly said two types of Rolex buyers, watch lovers and prestige buyers. I think its quite risky to loose the watch lovers as a clientele.

 

Sorry bud, I wasn’t directing that toward you at all but understand now why on thread you might have taken it that way: I was speaking of a broader prerogative that motivates some to feel that way

Here is where I will disagree, though.

There is some “negative perception” at the fringes of nerd watch people such as on these forums, and it becomes an echo chamber of a few hundred watch nerds telling each other this will have bad consequences for Rolex.

Then outside in the rest of the world, normal people are only clamoring MORE for Rolex.

Here, too, I think people misunderstand the business model and why it does not leave any money on the table. In short form:

First, there is inordinate value to a manufacturer of a commodity to have line-of-site that every model produced will be sold, and also not sit in inventory for any appreciable time. To use a hypothetical, a company should rather have 10 widgets they know they can sell immediately than 20 widgets they can only bet will sell 15 of and might languish in inventory for any period of time.

Second: Rolex’s value is in its brand, not in the watches it sells. The watches it sells are a commodity, and a commodity that is not in fact necessary or superior to any alternative and competing commodities. As a result, the commodities they sell are nearly without value to the company; what is of value is their brand. To use another imperfect hypothetical: if Rolex took its brand off a SS Daytona and launched it for sale under a ghost persona, they wouldn’t sell a single unit.

 

why an ordinary employee/s who was/were dismissed from their employment would file a case against a big AD of reputable watch brands if his/her facts are not true?

 

for the same reason civil law exists at all: the world is a complicated place full of complicated people and complicated facts.

and again, note that these same individuals are involved in an underlying state court litigation about employment issues, which none of us has seen the substance of.

these federal charges were later filed, and may or may not be tactical in nature.

This is not at ALL to take a position that the employee’s aren’t telling the truth, but instead to say for the same reasons no one can say they are (or, at least, the whole truth).