Hugh Hefner's son-in-law accused of insider trading [Updated]
Playboy founder Hugh Hefner's son-in-law has been accused by the Securities and Exchange Commission of using inside information to gain profits and avoid losses totaling more than $100,000 in trades of Playboy stock.
In a lawsuit filed Wednesday in federal court in Illinois, the SEC said that William Marovitz sold shares of Playboy between 2004 and 2009 ahead of public announcements related to Iconix’s potential acquisition of Playboy and Playboy negative earnings announcements.
Marovitz, 66, of Chicago has been married to former Playboy Enterprises Inc. chief Christie Hefner since 1995. Christie Hefner, 58, was chief executive of Playboy from 1988 to 2009.
In one trade highlighted in the lawsuit, Marovitz purchased shares of Playboy on Nov. 10, 2009, using inside information obtained from his wife, two days before a public announcement that Playboy was in talks to be acquired by Iconix. Playboy stock increased by 42% that day.
Playboy and Marovitz were not immediately available for a comment.
The lawsuit seeks the return of Marovitz’s "ill-gotten gains," plus civil penalties.
[Updated, 12:55 p.m., Aug. 3: The SEC said in news release that Marovitz, without admitting or denying guilt, has agreed to pay $168,352 in restitution, interest and penalties in a settlement with the SEC. The settlement is subject to approval by the court.]
From the lawsuit:
Marovitz bought and sold shares of Playboy in his own brokerage accounts between 2004 and 2009 ahead of public news announcements related to Iconix’s potential acquisition of Playboy, Playboy’s negative earnings announcements and Playboy’s offering of stock. As a result of his misuse of confidential information about Playboy, Marovitz gained profits and avoided losses totaling $100,952.40.
-- Stuart Pfeifer
Photo: Hugh Hefner. Credit: Kirk McKoy / Los Angeles Times