Hugh Hefner’s son-in-law is accused of illegally trading Playboy stock.
The Securities and Exchange Commission today sued Bill Marovitz, husband of former Playboy CEO Christie Hefner, accusing him of illegally trading Playboy shares on information gleaned from Hefner.
An SEC spokesman says that “Marovitz has consented to pay $168,352 in disgorgement, prejudgment interest and civil penalties.”
From the complaint, which was filed today in an Illinois federal district court:
The most severe offense appeared to come in November 2009, when Marovitz purchased 9,000 shares of Playboy stock at $2.77 per share. The company was in the midst of private negotiations to be acquired by Iconix Brand Group, with Hefner (who had resigned as CEO earlier that year) continuing to advise Playboy on the deal. The Iconix transaction broke on Bloomberg two days later, sending the stock price up 42% to $4.07 per share.
One month later, Iconix ended its pursuit of Playboy. On the same day that Hefner received word of Iconix’s decision, Marovitz called his broker and asked him to sell his entire Playboy holdings (the broker could only dump about 2/3 of them).
Marovitz also is accused of trading on non-public earnings information.
Playboy was taken private earlier this year by Hugh Hefner, Playboy’s founder and Christie’s father, and private equity firm Rizvi Traverse Management for $6.15 per share.
Here is a copy of the complaint: