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Insider Trading

How does the chairman of the SEC spend his spare minutes? One word: eBay.

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Arthur Levitt, the 68-year-old chairman of the U.S. Securities and Exchange Commission, has a lot to worry about these days. The ripe bull market is tempting hordes of novice investors in need of his protection. Online trading has spawned a new generation of securities scams, and day traders are pushing Internet stocks to prices that often confound seasoned observers. And then there's all that junk in the attic.

So after a long day of policing the stock and bond markets, Levitt tries his hand at a different kind of trading -- on eBay, the Internet auction site. About his online shopping hobby, Levitt will say only that "the Internet is a wonderful tool, but there is no button that sorts the real from the fake. If people use it to buy things or do research, they must use caution and do their homework," adding that he would prefer to keep his online alias under wraps. A survey of his eBay trading partners suggests that he does a modest sideline business trafficking in camera equipment, antique furniture, computer paraphernalia and games, postage stamps, fancy appliances, and miscellaneous other goods.

Some eBay traders know Levitt only through e-mail. "I sold something to Arthur Levitt? Don't tell me he's into Leica cameras!" exclaims Michael Leckstein, a 56-year-old lawyer in Monmouth, New Jersey, before turning away from the phone to shout, "Hey, son, guess who I sold something to!" The name Arthur Levitt means nothing to others, like Harold Babb, a retired South Carolina nuclear-power-plant manager who sold Levitt some philatelic material. But Larry Baker, an executive in the software department of the San Francisco brokerage company Round Hill Securities, thought a friend was putting him on when he heard Arthur Levitt was on the line; he answered the phone with appropriate jocularity, to Levitt's consternation. When Baker realized his error, he was "flabbergasted," he says. Later, he boasted to his firm's president, "I've got an in with the chairman of the SEC!" But when he tried to build on the relationship -- inquiring what Levitt thought of eBay's stratospheric stock price in an e-mail to arrange the delivery of a Thomas Moser four-poster bed -- Levitt responded with curt instructions about where to send the check.

Levitt's prominent role in those other markets can also cause some confusion. Meg Whitman, eBay's chief executive, recently told the Western Association of Venture Capitalists that she reacted with trepidation when Levitt called her office; fortunately, he was calling just to check in and say he enjoyed eBay.


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