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You cannot give any item if you're not a high staff, which we rarely do for rewards etc (like the GST rewards, check your inventory guys who played with the top 2!)
And about the private auctions, snk does them for a test purpose, he can't really auction something broken for ~100k (as there might be an error in certain variable).
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There we go. Only high staff can give items, meaning when they do give items to friends, they probably get away with it. And if they do get caught, being high staff and all, they just get a little lecture and "Please don't do it again.".
Isn't kind of unorthodox to take a players money for a broken item? Even if it's sold for ridiculously low price.