Mathis' Mantle: Sports Card Trimming and Securities Law Disclosures

Sports card buying, selling, trading, and collecting is simply a pastime for most of those involved in “the Hobby.” But for a select few, it is big business. One of the biggest players in the space, both literally and figuratively, is former First-Team All-Conference offensive lineman and Super Bowl champion, Evan Mathis. Mathis spent over a decade in the National Football League during which time he beefed up his childhood sports card collection, centered around Bo Jackson and Frank Thomas, to include some of the most sought-after and expensive cards in the industry. Likely his crowning achievement in the Hobby came in 2020 when Mathis cosigned and sold his 1953 Topps Mickey Mantle card graded as a PSA Gem Mint 10—the highest grade possible from the most well-respected and valued grading company in the space—on a cite called Collectable.

Collectable “connects [their] customers to opportunity”[1] by providing a platform for investors to purchase fractional shares of sports cards, memorabilia, and other historically significant collectibles. If this sounds like a slam-dunk security offering, that’s because it is, and Collectable agrees. The company routinely files offering circulars regarding each of its “Series” offerings with the Securities and Exchange Commission (SEC) that list valuations, number of fractional units or shares per piece, underwriting discounts, and proceeds for the issuer and seller/cosigner. Mathis’s Mantle card was one of only two that had achieved a perfect grade of 10 at the time of the sale and was valued at just over $2.3 million.

The legal intrigue comes, over two years later, on April 27, 2023, when Mathis posts a viral TikTok video providing instructions and recommendations on vintage card “trimming” (a massive no-no in the Hobby). He even shows himself doctoring a 1965 Gary Bell baseball card. Vintage sports cards were traditionally hand-cut by someone somewhere in a Topps factory often creating uneven borders and frayed edges. As card centering and edge condition are two of the four major factors that grading companies use in making final grade decisions, card “trimmers” can ensure higher grades and greater returns upon resale should their alterations make it past the grading company’s watchful eye. The post threw the Hobby into a frenzy. Following the TikTok, Hobby pundits grabbed their microphones, and each took turns offering up disdain for the disgraceful actions of Mathis and others like him who condone such things. To his credit, Mathis did accept an offer to join the Ringer Podcast Network’s Sports Cards Nonsense show to defend his position. He waxed poetic about how if this is the evil Hobby-ists want to rage against in the world, then that is their prerogative, and that he saw no harm in trimming or otherwise doctoring vintage cards.

A large part of the SEC’s mission is to protect the retail investor from fraudsters. The SEC promulgated Rule 10b-5 to combat the employment of manipulative and deceptive devices regarding the offering of securities. The Rule makes it unlawful to make “any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statement made, in the light of the circumstances under which they were made, not misleading”[2] (emphasis added). The “materiality” of such information is contingent on whether there is “substantial likelihood that the disclosure…would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of the information made available.”[3] Traditionally, the fact that a sports card has been trimmed or altered in some way is annotated on the grading company’s encased label. The grading companies do this to put potential buyers on notice that the value of a card is diminished, if not wiped out completely. If Mathis or Collectable had known that the Mantle card included in the fractional offering had been trimmed and failed to disclose that information, it would not be difficult to prove that the omission was material to the reasonable sports card investor and a violation of securities laws. However, Rule 10b-5 does require that the government prove scienter, or knowledge, of the infraction which would be an uphill battle for the prosecution at this point in the story.

Since the trimming TikTok was released, both Mathis and Collectable have come out and stated that the Mantle card that was sold off in parts during the securities offering in 2020 was not altered in any way. Following an “investigation,” Collectable again emphasized that the Mantle card had already been graded and hermetically sealed when Mathis purchased it years prior, providing some credibility and legal protection for the platform. But the integrity and legality of fractional sales, specifically of vintage sports cards, will continue to be called into question. There is no apparent upside or financial benefit for Mathis following his decision to upset nearly the entire Hobby. My conclusion echoes the wise words of Alfred Pennyworth, “some men just want to watch the world burn.”

[1] https://collectable.com/ [2] 17 CFR §240.10b-5 [3] TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976)

Nate Otto is a rising 3L at the University of Florida Levin College of Law and the Executive Articles Editor for the Florida Entertainment and Sports Law Review. Sadly, he is Twitter-less.