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Former Playboy CEO Christie Hefner told husband William Marovitz not to trade, but he did it anyway; now he has to pay up, the U.S. Securities and Exchange Commission says.
The U.S. Securities and Exchange Commission accused the husband of former Playboy Enterprises CEO Christie Hefner of insider trading on Playboy shares in a civil case filed in federal court in Illinois on Wednesday. The husband – and son-in-law of Playboy Magazine founder Hugh Hefner – William Marovitz has agreed to pay $168,352 to settle the lawsuit, without admitting or denying wrongdoing, Bloomberg reports. He’s also promised to not violate insider-trading regulations in the future.
“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 in its complaint. This illegal trading made Marovitz $100,952, according to the SEC.
Marovitz's most severe transgression occurred in November 2009, Fortune reports. While his wife (who had resigned as CEO earlier that year) advised Playboy as it privately negotiated its possible sale to Iconix Brand Group Inc., Marovitz purchased 9,000 shares of Playboy stock at $2.77 per share. When news of the Iconix talks came out two days later, the stock price jumped 42% to $4.07 per share.
(The takeover talks ultimately went nowhere, and Playboy founder Hugh Hefner struck a $207 million deal this year with private-equity firm Rizvi Traverse Management to take the publisher private.)
An attorney and former Illinois state senator, Marovitz, 66, has been married to Hefner since 1995. Marovitz’s attorney Jim Streicker told the Associated Press that his client lost money on his investments in Playboy during the years in question.