Define the Crime
Can we confirm what we believe Nelson was doing? Was he shill bidding to drive up the revenue for SnapNames or was he using a bidding system to get great deals on valuable/traffic names? There seems to be a question on that. If it was shill bidding, (and that is what this was in my opinion) the problem is going to be more criminal than financial. I would take the money offered by Snap and run!!!

Calculating Losses
In civil court, the systems bends over backwards to determine a victims “true loss.” Because the winners freely offered higher bids (even as a result of a shill bid) they have granted some legitimacy to the end value paid…hurting themselves (as victims) in regards to damages. It is because of this kind of buying that trust in an auction house is of paramount importance. That is what SnapNames is trying to buy with these settlements, some semblance of that trust, not settle damages, but to stay in the auction business.

What are the Consequences?
Criminal actions can be filed and those responsible (All of them, not just Brady is it is broader) will go to jail/pay fines. Also, a class action can be filed and some restitution may be paid to the bidders but I don’t think everyone will be made whole…and it might be significantly lower that the current offer from SnapNames.

Settlement Offer
I think SnapNames’ initial reaction was pretty generous. That assumes the level of involvement is restricted to a rogue employee–a high-ranking one but employee none the less. A bunker mentality of “Public Acknowledgement, Discovery, Lengthy Analysis and Allowing the Criminal System to do it’s work ” prior to a settlement offer, might have been able to save them some money. Also, not sure this strategy would have hurt their auction business any more that has been done. Being a sucker for the good in people, I like to take them at their word.