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Here is the article from National Jeweler.
GIA settles diamond grading lawsuit
- Thread starter cflutist
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No one can come clean until after criminal trials are conducted.
But that was pretty amazing
"After reviewing the GIA grading reports, the parties agreed that the grades at issue involved areas of subjectivity and fell within industry standards," Tacopina said.
Helllloooooeeeooo????
As for the 104ct D flawless stone in question, the suit asserts it was actually of E-VVS2 quality.
That is too far off to be a subjective difference - Flawless to VVS2 !!!!!
But that was pretty amazing
"After reviewing the GIA grading reports, the parties agreed that the grades at issue involved areas of subjectivity and fell within industry standards," Tacopina said.
Helllloooooeeeooo????
As for the 104ct D flawless stone in question, the suit asserts it was actually of E-VVS2 quality.
That is too far off to be a subjective difference - Flawless to VVS2 !!!!!
Art Nouveau
Brilliant_Rock
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I saw this article too in the National Jeweler earlier today. It seems like GIA is sweeping everything under the rug. The difference between D, IF and E, VVS2 seems to be more than acceptable subjective variation. So are they saying bribery to change the grades are not involved?
AN
AN
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Yes, i agree 100% with Garry,Date: 12/21/2005 7:45:35 PM
Author: Garry H (Cut Nut)
No one can come clean until after criminal trials are conducted.
But that was pretty amazing
''After reviewing the GIA grading reports, the parties agreed that the grades at issue involved areas of subjectivity and fell within industry standards,'' Tacopina said.
Helllloooooeeeooo????
As for the 104ct D flawless stone in question, the suit asserts it was actually of E-VVS2 quality.
That is too far off to be a subjective difference - Flawless to VVS2 !!!!!
my assumption is that the Diamond Industry is not going to sit still!!!!
VVS2 to Flawless? "subjectivity within industry standards??????
WHAT A JOKE!!!!!
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The only thing more rare than a D Flaless is Garry and DiaGem agreeing
Seasons Greetings DiaGem
The winners: GIA, Mr. Pincione, and the diamond dealers who paid the bribes.
The losers: Us! The public! Don''t we have a right to know who those dealers are so we do not do business with them?
GIA has set up a program, so the articles say, to re-examine at no cost any diamond certifiied by GIA, with the certificate.
So lets play this out, if I have a diamond certified by GIA, I take it to my jeweler, he removes the stone from the setting and it goes back to GIA with the original report. Here is the question: What if my "G" stone is now rated as an "I"? I paid the dealer based on a "G", but it is not. He probably bought it from a wholesaler as a "G". Don''t I have a right to get a refund of some monies? Some of us might have gone to an appraisor, but I suspect, the vast majority do not, they see the GIA report, think it is the gospel, and on they go. I think the settlement is just the beginning.
The losers: Us! The public! Don''t we have a right to know who those dealers are so we do not do business with them?
GIA has set up a program, so the articles say, to re-examine at no cost any diamond certifiied by GIA, with the certificate.
So lets play this out, if I have a diamond certified by GIA, I take it to my jeweler, he removes the stone from the setting and it goes back to GIA with the original report. Here is the question: What if my "G" stone is now rated as an "I"? I paid the dealer based on a "G", but it is not. He probably bought it from a wholesaler as a "G". Don''t I have a right to get a refund of some monies? Some of us might have gone to an appraisor, but I suspect, the vast majority do not, they see the GIA report, think it is the gospel, and on they go. I think the settlement is just the beginning.
Capitol Bill
Shiny_Rock
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I''m pleased for Mr. Pincione, as he obviously received acceptable compensation for the injustices he incurred. But the central issue brought to light by this court case still needs to be fully aired. Until the public is made aware of the extent of the bribery scandal, and the parties involved, this issue will not go away. The credibility of the diamond industry suffers more each day this scandal is permitted to fester.
Bill Scherlag
Bill Scherlag
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Why does everyone here assume that the correct grades for the two stones were the grades alleged by the plaintiffs in their complaint? The plaintiffs needed to allege at least a two grade difference to make their lawsuit viable, but alleging it doesn''t make it so.
It''s my understanding that the VVS2 in question was due to graining, not the presence of an imperfection. That means that the argument that it was a judgment call probably has some merit.
The fact is that the GIA''s claim that these were borderline judgment calls probably has far more merit than most of you seem to think. They were forced to settle because of the bribes, not the unreasonableness of the grades.
Whether or not the grading was defensible is not the issue. It''s the corruption. "Lucky" grades resulting from uneven application of laboratory standards are, and always will be, part of the landscape of our business.
A problem arises only when those "lucky" grades are bought and paid for. The money at stake is huge compared to the salaries of the graders, so the temptation will always be there.
The attention this case is receiving coupled with the oversight measures GIA is instituting will almost certainly be effective in preventing a recurrence of this problem for now.
It''s up to the GIA and the industry to stay vigilant to ensure that problem doesn''t rear its ugly head again in ten years when today''s news is ancient history.
It''s my understanding that the VVS2 in question was due to graining, not the presence of an imperfection. That means that the argument that it was a judgment call probably has some merit.
The fact is that the GIA''s claim that these were borderline judgment calls probably has far more merit than most of you seem to think. They were forced to settle because of the bribes, not the unreasonableness of the grades.
Whether or not the grading was defensible is not the issue. It''s the corruption. "Lucky" grades resulting from uneven application of laboratory standards are, and always will be, part of the landscape of our business.
A problem arises only when those "lucky" grades are bought and paid for. The money at stake is huge compared to the salaries of the graders, so the temptation will always be there.
The attention this case is receiving coupled with the oversight measures GIA is instituting will almost certainly be effective in preventing a recurrence of this problem for now.
It''s up to the GIA and the industry to stay vigilant to ensure that problem doesn''t rear its ugly head again in ten years when today''s news is ancient history.
Art Nouveau
Brilliant_Rock
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Karen 357
You raise a good point. I raised the same issue under another thread, but did not get an response. So far, GIA has agreed to re-verifer certificates for free, which sounds good. But in reality, who in their right mind is going to take a chance of getting back a lower grade if there is no system in place to get compensated. Ultimately, who is going to pay? The public has a right to know who the bribers are and they should be required to come up with a pool of funds to refund consumers who bought the diamonds with the bummed up certificates.
AN
You raise a good point. I raised the same issue under another thread, but did not get an response. So far, GIA has agreed to re-verifer certificates for free, which sounds good. But in reality, who in their right mind is going to take a chance of getting back a lower grade if there is no system in place to get compensated. Ultimately, who is going to pay? The public has a right to know who the bribers are and they should be required to come up with a pool of funds to refund consumers who bought the diamonds with the bummed up certificates.
AN
Radiantman
You bring up good points.
However, I want those dealers in the corruption out of the business, plain and simple. I will never know who they were because of the out of court settlement, and all parties being gagged.
I have to wonder, if as GIA states there were only a few stones in question here, why not divulge the info, get rid of the crooks, and the industry and public moves on.
They said there were a few dealers involved, but if only a few, and small numbers why cover it up? We will never know who the delaers were. I thought at the beginning that the dealers in questions were small time guys, but we cannot take that for granted. Maybe there were bigger fish. What if the dealers were Tiff or Zales or Walmart, hey these guys sell a few diamonds each year! If it was one of those, that info in the public hands would destroy the retails sales for a while because the public would not know what they have bought.
One other point from original post: When GIA re-certifies the retuned diamond, is the technician(s) going to have the orignal cert next to the diamond or will the cert be hidden from the technician? Would certainly be more objective if the tech does not see it.
You bring up good points.
However, I want those dealers in the corruption out of the business, plain and simple. I will never know who they were because of the out of court settlement, and all parties being gagged.
I have to wonder, if as GIA states there were only a few stones in question here, why not divulge the info, get rid of the crooks, and the industry and public moves on.
They said there were a few dealers involved, but if only a few, and small numbers why cover it up? We will never know who the delaers were. I thought at the beginning that the dealers in questions were small time guys, but we cannot take that for granted. Maybe there were bigger fish. What if the dealers were Tiff or Zales or Walmart, hey these guys sell a few diamonds each year! If it was one of those, that info in the public hands would destroy the retails sales for a while because the public would not know what they have bought.
One other point from original post: When GIA re-certifies the retuned diamond, is the technician(s) going to have the orignal cert next to the diamond or will the cert be hidden from the technician? Would certainly be more objective if the tech does not see it.
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If there''s enough evidence for the feds to bring criminal indictments, then we will all know who the the bad guys are are and those firms will almost certainly be destroyed financially, even if they are not ultimately convicted.
If there are no indictments, then you''re right, the perps will largely get away with it. Hopefully, that will not be the case.
If there are no indictments, then you''re right, the perps will largely get away with it. Hopefully, that will not be the case.
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"When GIA re-certifies the returned diamond, is the technician(s) going to have the original cert next to the diamond or will the cert be hidden from the technician? Would certainly be more objective if the tech does not see it. "
One might ask this question, but getting a direct response to it from the GIA is very doubtful. You need to keep in mind the secretive, competitive and business nature of diamond grading at the level of such a complex organization as the GIA. They need to meet their newly advertised higher ethical standards while at the very same time not set off waves of panic among any segment of the trade or the public. I can''t imagine anyone except senior lab staff making decisions on the re-grading of any important diamonds being re-submitted for verification. Every one of these calls will be important.
Just imagine that you were a consumer who bought a large diamond, in totally good faith, from an important retailer. You now don''t know where you stand. The retailer must take on the risk of stone removal, and resetting along with shipping it to GIA and waiting for the good or bad news. All of this will be done for free and the retailer will swallow any costs and all risks. What if the diamond chips, what if it is lost in transit, what if it does not get identical grading? OMG, look out! Do you think anyone like the GIA will re-imburse retailers who have expenses to re-submit large diamonds? I doubt it. Having the GIA review its own, now questionable grading, is the proverbial fox guarding the hen house, but what are we to do otherwise. Would anyone prefer a competing lab to grade these stones? That would not be unbiased, either.
There is no perfect solution. It is a compromise and we need to believe there will be no bad faith activity to hide any problems discovered. People will ask tough questions and there may not be a lot of really good answers. I think the GIA will do a decent job of finding a fair way to treat this problem. I hope so.
One might ask this question, but getting a direct response to it from the GIA is very doubtful. You need to keep in mind the secretive, competitive and business nature of diamond grading at the level of such a complex organization as the GIA. They need to meet their newly advertised higher ethical standards while at the very same time not set off waves of panic among any segment of the trade or the public. I can''t imagine anyone except senior lab staff making decisions on the re-grading of any important diamonds being re-submitted for verification. Every one of these calls will be important.
Just imagine that you were a consumer who bought a large diamond, in totally good faith, from an important retailer. You now don''t know where you stand. The retailer must take on the risk of stone removal, and resetting along with shipping it to GIA and waiting for the good or bad news. All of this will be done for free and the retailer will swallow any costs and all risks. What if the diamond chips, what if it is lost in transit, what if it does not get identical grading? OMG, look out! Do you think anyone like the GIA will re-imburse retailers who have expenses to re-submit large diamonds? I doubt it. Having the GIA review its own, now questionable grading, is the proverbial fox guarding the hen house, but what are we to do otherwise. Would anyone prefer a competing lab to grade these stones? That would not be unbiased, either.
There is no perfect solution. It is a compromise and we need to believe there will be no bad faith activity to hide any problems discovered. People will ask tough questions and there may not be a lot of really good answers. I think the GIA will do a decent job of finding a fair way to treat this problem. I hope so.
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I’m confident that GIA is perfectly capable of recognizing every single stone that has been submitted to any of their labs in the last decade or so by using comparison with Sarin and Gemprint type data. It’s not that hard to do and they''ve got some very savvy people on staff. I’m also confident that they have an accurate record of who submitted each stone and when, what graders were involved in the examination and who made the final grading decision on difficult calls. What''s missing is that they have no way of tracing what happens to a stone after they grade it. This becomes unimportant if someone resubmits the stone.
When a stone comes in for examination, whether accompanied by a report or not, I have no doubt that it’s checked to see if they have graded it before and, if it''s found that one of the compromised employees or customers had ANYTHING to do with it, it will be kicked up to a higher level and flagged as a special situation (I would not expect the graders to be made aware of this but the management would know). I would fully expect this to be the procedure for every stone submitted, not just the ones where the client is requesting a regrading.
Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver
When a stone comes in for examination, whether accompanied by a report or not, I have no doubt that it’s checked to see if they have graded it before and, if it''s found that one of the compromised employees or customers had ANYTHING to do with it, it will be kicked up to a higher level and flagged as a special situation (I would not expect the graders to be made aware of this but the management would know). I would fully expect this to be the procedure for every stone submitted, not just the ones where the client is requesting a regrading.
Neil Beaty
GG(GIA) ISA NAJA
Professional Appraisals in Denver
Well, these are all good guesses what will happen when GIA gets the diamond back, I guess we will have to wait to see what they will do.
But I am waiting for that 1 bad experience where the re-grading is going to show a lower grade, then what is the dealer to do? What responsibliity do they have to the customer? What is or is not the customer going to ask for? A cost differential could be very difficult to determine due to changes in diamond prices over the years.
I am guessing but I think that GIA is not out of the woods on this one by any stretch of the imigination. If the re-grading comes back lower, watch out! I wonder who is going to be the first dealer to sue GIA, then when that happens, other dealers are going to get in on it. Hey, maybe customers will sue the dealers. Some people have deep pockets
Stay tuned.
Edited:
OldMiner-very good points. When I read in the newspaper about GIA only accepting the diamond back, not the diamond in the setting, it was not clear in the article who would remove the diamond and any costs associated. Perhaps some dealers will remove for no charge, not clear to me if I bought the stone 5 years ago, should the dealer remove no charge or charge for service?
Denver-Again we will have to see how GIA management handles the returned stones, but I would think that it would not matter if one of the terminated EE's handled the original grading or a current EE, GIA would handle it the same. We shall see.
But I am waiting for that 1 bad experience where the re-grading is going to show a lower grade, then what is the dealer to do? What responsibliity do they have to the customer? What is or is not the customer going to ask for? A cost differential could be very difficult to determine due to changes in diamond prices over the years.
I am guessing but I think that GIA is not out of the woods on this one by any stretch of the imigination. If the re-grading comes back lower, watch out! I wonder who is going to be the first dealer to sue GIA, then when that happens, other dealers are going to get in on it. Hey, maybe customers will sue the dealers. Some people have deep pockets
Stay tuned.
Edited:
OldMiner-very good points. When I read in the newspaper about GIA only accepting the diamond back, not the diamond in the setting, it was not clear in the article who would remove the diamond and any costs associated. Perhaps some dealers will remove for no charge, not clear to me if I bought the stone 5 years ago, should the dealer remove no charge or charge for service?
Denver-Again we will have to see how GIA management handles the returned stones, but I would think that it would not matter if one of the terminated EE's handled the original grading or a current EE, GIA would handle it the same. We shall see.
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