The son-in-law of Playboy magazine founder Hugh Hefner settled allegations of insider trading in Playboy stock, agreeing to resolve a lawsuit by the U.S. Securities and Exchange Commission for $168,352.
William A. Marovitz, who is married to Christie Hefner, made $100,952 on the trades, according to the SEC complaint filed today in federal court in Chicago.
“Despite instructions from his wife that he should not trade in shares of Playboy and a warning from the general counsel of Playboy about his buying or selling Playboy stock, Marovitz bought and sold shares of Playboy in his own brokerage accounts between 2004 and 2009,” the SEC said.
An attorney and former Illinois state senator, Marovitz, 66, has been married to Hefner since 1995, according to the complaint. Hefner led Chicago-based Playboy from 1988 to 2009.
Before her departure, Playboy had been negotiating its possible sale to New York-based Iconix Brand Group Inc. Hefner met with Iconix CEO Neil Cole in October and December 2008 and continued to represent Playboy in the talks after stepping down, the SEC alleged.
During that time, Marovitz bought Playboy stock after obtaining non-public information about the Iconix negotiations from his wife, according to the complaint. Sale negotiations broke off in December 2009 and the deal was never consummated.
“Mr. Marovitz has no comment on the complaint or the settlement agreement,” his attorney, Jim Streicker of Chicago, said in a telephone interview. “He lost substantial sums of money on his investments in Playboy over the years,” he said.
Marovitz’s trades were based on confidential information that he misappropriated from Hefner, who was the CEO when most of the illegal trades were made, the SEC said in a press statement.
Playboy founder Hugh Hefner led a $207 million deal that took the 58-year-old magazine publisher private in March.
While Hefner’s husband didn’t admit or deny the SEC’s allegations, he consented to a court order barring him from further violation of the SEC’s regulations, according to the commission’s statement. The settlement is still subject to court approval.
The case is Securities and Exchange Commission v. Marovitz, 11cv5259, U.S. District Court, Northern District of Illinois (Chicago).
Read More: http://www.bloomberg.com/news/2011-08-03/playboy-founder-hugh-hefner-s-son-in-law-sued-by-sec-for-insider-trading.html