UNITED STATES SECURITIES AND EXCHANGE COMMISSION


          Litigation Release No. 16152 \ May 19, 1999

          SECURITIES AND EXCHANGE COMMISSION v. CAVANAGH, et al.,
          98 Civ. 1818 (DLC) (S.D.N.Y)

                         On May 14, 1999, Judge Denise L. Cote of the Federal
          District Court in Manhattan signed a consent order that requires
          Charles Hecht, Esq., a partner in a New York law firm, to pay
          $180,000 to resolve a civil contempt motion brought by the
          Securities and Exchange Commission.

               Mr. Hecht represented William N. Levy, one of twenty
          defendants in SEC v. Cavanagh, et al. (98 Civ. 1818 (DLC)), a
          pending civil case alleging massive fraudulent sales of
          unregistered stock of Electro-Optical Systems Corporation, mostly
          via the Internet.  The SEC’s contempt motion charged that (1) Mr.
          Hecht received legal fees from Levy while Levy’s assets were
          frozen by Judge Cote’s order; and (2) Mr. Hecht participated with
          Levy in preparing and filing with the Court a false accounting
          about Levy’s assets and transactions that omitted to disclose
          that Levy had received unregistered Electro-Optical stock and
          then retailed it for about $560,000.  (As previously announced,
          on January 7, 1999 Levy was ordered to pay $1,292,000 to the
          Court’s Registry, which includes the $560,000 omitted from the
          accounting.)

               At a May 14 hearing on the contempt motion Judge Cote,
          responding to Mr. Hecht’s explanation of his conduct, stated that
          the Levy accounting omitted "certain critical facts which you
          [Hecht] were aware of, and the filing was false in terms of its
          language, but it was also intended to be misleading."  Judge
          Cote, noted the seriousness of an attorney’s "obligations to the
          Court, to the law or under your license".

               The $180,000 that Mr. Hecht agreed to pay includes more than
          $150,000 (with interest) as disgorgement of attorney's fees Mr.
          Hecht's law firm received in the case, as well as more than
          $20,000 representing the SEC’s attorney's fees on the contempt
          motion, calculated at a rate of $300 per hour.

               The civil case, SEC v. Cavanagh, et al., has been stayed
          pending a criminal investigation of related matters.

               Related Litigation Releases: No. 15660, March 13, 1998
                                   No. 15715, April 21, 1998
                                   No. 16035, January 21, 1999