Inside ‘Playboy’ Trader Settles Charges With SEC

CHICAGO (CN) - The husband of Playboy's former CEO Christie Hefner will pay $168,352 to settle SEC charges that he profited from inside trading in Playboy stock. His wife, the daughter of Playboy founder Hugh Hefner, is not suspected or accused of helping him.

William Marovitz made $101,000 from his illegal trades, the SEC says in its federal complaint.

The SEC made it clear that Christie Hefner had told him not to do it.

"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 ahead of public news announcements related to Iconix's potential acquisition of Playboy, Playboy's negative earnings announcements and Playboy's offering of stock," the SEC says. "As a result of his misuse of confidential information about Playboy, Marovitz gained profits and avoided losses totaling $100,952.40."

Marovitz, 66, is an attorney and the president of Marovitz Group, a real estate development company in Chicago. He has been married to Christie Hefner since 1995.

Hefner was "concerned with Marovitz buying or selling any Playboy stock" and asked Playboy's general counsel to warn him about the "serious implications" of insider trading, the SEC says.

Playboy's general counsel then "warned Marovitz that 'all SEC rules governing Christie's sale or purchase of stock are equally applicable to you, particularly the rules governing insider trading,'" the SEC says.

But Marovitz went right ahead anyway, and "bought 9,000 shares of Playboy stock at $2.77/share," upon learning that Iconix was about to make a takeover offer, the SEC says.

Playboy shares rose, as expected, after the offer became public, and sank, as expected, after Iconix and Playboy did not close the deal.

The SEC says Marovitz made $100,952 in "ill-gotten gains" and agreed to disgorge and pay fines, totaling $168,352, to settle.

The SEC order also tells Marovitz quite clearly that he is not supposed to do this again.

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