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Hugh Hefner's son-in-law settles Playboy insider trading case

August 04, 2011|By Stuart Pfeifer, Los Angeles Times

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 from 2004 to 2009 ahead of public announcements related to Iconix Brand Group Inc.'s potential acquisition of Playboy and Playboy's negative earnings announcements.

Without admitting or denying guilt, Marovitz agreed to pay $168,352 in restitution, interest and penalties in a settlement with the SEC. The settlement must be approved by a federal court, the SEC said in a news release.

Marovitz, 66, of Chicago has been married to former Playboy Enterprises Inc. Chief Executive 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, the SEC said. Playboy stock increased 42% the day the news broke.

Playboy and Marovitz were not immediately available for comment.

The lawsuit sought the return of Marovitz's "ill-gotten gains," plus civil penalties.

stuart.pfeifer@latimes.com

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