 |
Steven M. Hecht is a securities and complex commercial litigator. He has obtained successful jury verdicts in New York Federal court in securities and contract cases. In one such case, Mr. Hecht obtained a defense verdict after only 90 minutes of jury deliberation following the two-week trial of a Hong Kong broker-dealer defending against claims by its former president for breach of contract and constructive discharge, thus defeating a claim for over $10 million in lost wages, bonus and equity stake. In 2006, Mr. Hecht was named one of New Jersey's "40 Under 40" by New Jersey Law Journal for his career achievements and potential to be "among the leaders of the New Jersey bar." Additionally, Mr. Hecht was named to the 2010-2012 editions of Super Lawyers, and was previously selected as a Rising Star by that publication. Prior to joining Lowenstein Sandler, Mr. Hecht was an associate at the New York office of Cleary, Gottlieb, Steen & Hamilton from 1992 to 1997.
In focusing on the fiduciary duties that directors and officers owe to the company and its shareholders, Mr. Hecht has handled the successful resolution of approximately a dozen cases in just the past few years involving claims brought by shareholders challenging change-in-control transactions for lack of fair value and disclosure deficiencies in the company's proxy statements or tender offers, as well as litigation over proxy fights and consent solicitations. He authored the chapter on Derivative Actions in the leading treatise analyzing New Jersey corporations law.
Mr. Hecht also serves as an arbitrator for FINRA (having previously been an arbitrator for the NASD and the New York Stock Exchange), where he has also succeeded in bringing and defending broker-dealer and customer claims. In addition, he has defended individual and corporate clients in connection with dozens of subpoenas and investigations by the Securities and Exchange Commission, Commodity Futures Trading Commission and New Jersey Bureau of Securities.
In connection with his successes in defending mortgage lenders and master servicers against predatory lending claims and in bringing actions against correspondent mortgage brokers for repurchase and indemnification claims, Mr. Hecht is a member of the Firm's Global Financial Crisis Group. This past year Mr. Hecht has defeated two separate lender liability claims on a threshold motion to dismiss reflected in published decisions listed below.
Case Highlights
- Successfully defended Rule 10b-5 claims in securities class actions, including first-chair success in In re Emerson Radio Corp. Securities Litigation, where Judge Linares issued 41-page opinion dismissing action and accepting defendants’ arguments that “confidential witness” and loss causation allegations were deficient
- Successfully dismissed stock option backdating claims against Westwood One; the New York Supreme Court’s dismissal of the purported derivative action on August 3, 2007 also denied plaintiff’s request for leave to replead and file a further amended complaint
- In defending claims for disgorgement of insider short-swing profits under Section 16(b), successfully defended investment advisors in several S.D.N.Y. actions; currently handling Second Circuit appeal concerning statutory exception for “debt previously contracted” and director-by-deputization exemption from liability
- Hercules v. ITXC Corp. (Virginia): conducted expert cross-examination and played leading role in defending jury trial of $120 million contract claim; succeeded in directed verdict motion at close of plaintiff’s case
Recent Published Decisions
Successful Defense of Mortgage Servicer Accused of Improper Foreclosure Practices
Mr. Hecht successfully obtained immediate dismissal in New Jersey federal court of a purported class action accusing a national mortgage servicing company of charging and collecting allegedly improper and unauthorized fees in connection with the mortgage foreclosure process. All claims, which included claims for breach of contract, unfair and deceptive practices, and violation of the Fair Foreclosure Act and Consumer Fraud Act, were dismissed before the federal court ever reached the question of whether to certify the purported class. Perkins v. WaMu et al., 655 F. Supp.2d 463 (D.N.J. 2009).
Successful Defense of National Mortgage Lender Against Predatory Lending Claims
Mr. Hecht successfully obtained the dismissal at the pleading stage of a claim for predatory lending, fraud, violation of the Truth in Lending Act and RESPA brought by a borrower alleging that she was defrauded by receiving a floating-rate mortgage loan that carried a higher interest rate than the one she believed she had locked in. Sutherland v. REMAX 2000, Ask Realty Inc., & Wells Fargo Bank, 872 N.Y.S. 2d 693 (N.Y. Sup Ct. 2008).
Successful Declaratory Judgment Over Licensing Agreement
Mr. Hecht successfully obtained summary judgment within two months of filing the complaint -- without any discovery or expedited proceedings -- granting declaratory judgment against Reuters Limited for failing to timely exercise a contractual option to renew its license under a source code agreement with its IM vendor. FaceTime Communications, Inc. v. Reuters Limited, 2008 WL 2853389 (SDNY July 22, 2008) (McMahon, J.).
Successful Defense of Selling Stockholder in Sale of Controlling Interest
Mr. Hecht successfully defended the sale of a majority block of stock by Sport Supply Group’s former controlling stockholder to Collegiate Pacific, one of Sport Supply’s competitors. In a landmark decision of the Delaware Chancery Court, reported at Abraham v. Emerson Radio Corp., 901 A.2d 751 (Del. Ch. 2006), Vice Chancellor Strine granted Mr. Hecht’s motion to dismiss a claim by minority shareholders that the majority shareholder owed fiduciary duties to them not to sell its control bloc of shares to a competitor that allegedly looted the company’s assets after the sale.
Successful Emergency Motion To Second Circuit Court of Appeals In Proxy Fight
Mr. Hecht represented a hedge fund attempting to oust the existing board of a public company and replace it with its own nominees. In a major ruling concerning shareholder rights and the preservation of votes obtained in a consent solicitation, reported at 466 F.3d 257 (2d Cir. 2006), the Second Circuit Court of Appeals, in a panel led by Chief Judge Walker, granted Mr. Hecht’s emergency motion to allow same-day delivery of shareholder consents that were otherwise subject to expiration under Delaware law.
Dismissal of Federal Securities Class Action Against Emerson Radio Corp.
Mr. Hecht succeeded in obtaining the dismissal of a securities class action lawsuit against Emerson Radio Corp. in New Jersey federal court. By its December 19, 2005 order, the Court dismissed all claims under Rule 10b-5; Section 20(a) for control person liability; and Section 20A for insider trading. In dismissing the complaint the Court made several critical rulings about “confidential witness” allegations, the group-pleading doctrine and insider trading in its 41-page opinion.
Successful Defense of Broker-Dealer in Federal Jury Trial
Mr. Hecht obtained a jury verdict in the successful defense of a Hong Kong broker-dealer against claims by its former President for breach of contract and constructive discharge. The former President claimed over $10 million for lost wages, bonus and his equity stake in the company. All claims were denied by the jury following a two-week trial in the U.S. District Court for the Southern District of New York before Judge Motley. See Dagen v. CFC Group Holdings Ltd., et al., 2004 U.S. Dist. LEXIS 6582 (April 13, 2004) (denying plaintiff's motion for judgment as matter of law, new trial, or relief from judgment); 2004 U.S. Dist. LEXIS 6839 (April 21, 2004) (granting in part, denying in part defendants' motion for taxable costs). Mr. Hecht also obtained several favorable pretrial rulings in the case concerning telephonic testimony by foreign witnesses at trial -- see 2003 U.S. Dist. LEXIS 20029 (November 7, 2003) -- and requiring the plaintiff to take the deposition of the principal defendant in Hong Kong as opposed to New York. See 2003 U.S. Dist. LEXIS 13859 (August 7, 2003). Mr. Hecht also secured the dismissal of the plaintiff's appeal from this verdict by the Second Circuit Court of Appeals on June 12, 2007.
Successful Defense of Judgment Debtor Following Four-Week Trial
Mr. Hecht obtained a successful defense verdict following a four-week bench trial that challenged a transaction under the Uniform Fraudulent Transfer Act. The ruling, rendered on October 25, 2005, followed the New Jersey Supreme Court’s prior determination that the trial was needed to decide whether the defendants perpetrated a fraud and “suburban shell game” by apparently transferring an interest in their residence. See SASCO 1997 NI, LLC v. Zudkewich, et al., 166 N.J. 579 (2001). The plaintiff creditor sought several million dollars in damages at trial but was not awarded any sums upon the court’s dismissal of all claims. The Supreme Court’s 2001 opinion commanded special attention in the commercial lending industry for its wide-ranging impact upon the time period by which creditors must investigate potential claims against delinquent debtors, and this ruling thus brought closure to seven years of complex high-impact litigation. Mr. Hecht also secured the Appellate Division’s affirmance of the trial court’s ruling, see 2007 WL 1827257 (App. Div. June 27, 2007), and the Supreme Court's denial of certification; certif. denied, 192 N.J. 599, 934 A.2d 641 (October 31, 2007).
Other Successful Securities Cases
- Mr. Hecht successfully represented a large group of investors bringing claims against a communications network company under Section 10(b) of the Exchange Act and Rule 10b-5 in the Southern District of New York. His successful argument in that case is reported at Liberty Ridge LLC, et al. v. RealTech Systems Corp., et al., 173 F. Supp. 2d 129 (S.D.N.Y. 2001).
- His successful defense before the Second Circuit Court of Appeals of a jury verdict he obtained in an oral contract case before the Eastern District of New York is reported at Marbelite Co. v. National Sign & Signal Co., 2 Fed. Appx. 118 (January 22, 2001).
- He played a significant role in the Cendant Corporation Securities Litigation on behalf of Ernst & Young LLP, one of the largest securities fraud cases ever brought in the District of New Jersey.
- He has represented numerous public companies, including Emerson Radio, Tonka, ITXC Corp., Barringer Technologies, and Marisa Christina, in connection with a variety of commercial and class action lawsuits, and he has handled derivative action and shareholder rights litigation. He was involved in the First Interstate/Wells Fargo acquisition, on behalf of white knight First Bank, in the then-largest bank takeover case in history.
View More...
|
In an article about a New York lawsuit over amending an agreement to correct a mutual mistake , Steven Hecht comments on the difficulty of enforcing such contemplated amendments where a third party acquires the contract before it is reformed.,
The Distressed Debt Report, November 9, 2010
|
|
In an article about the substantial increase in class-action securities lawsuits in 2008, accompanied by the significant drop-off of Rule 10b-5 fraud claims in particular, Steven Hecht comments on the impact that the Supreme Court's Tellabs and Stoneridge rulings may have had on such fraud claims and whether the other securities claims will even make it past the pleading stage.,
Compliance Week, January 20, 2009
|
|
Steven M. Hecht examines suit brought by NASD against Morgan Stanley arising from the brokerage house's alleged failure to produce e-mails in response to investor complaints.,
Reuters, January 30, 2007
|
View More...
|
|
 |
Harvard Law School
(J.D., 1992),
cum laude
|
|
Haverford College
(B.A., 1989),
Phi Beta Kappa
|
|
New Jersey
|
|
New York
|
|
1992,
U.S. District Court, District of New Jersey
|
|
1993,
U.S. District Court, Southern District of New York
|
|
1993,
U.S. District Court, Eastern District of New York
|
|
2000,
U.S. Court of Appeals, Second Circuit
|
|
2006,
U.S. Court of Appeals, Third Circuit
|
|
2009,
U.S. Supreme Court
|
- FINRA (formerly NASD and NYSE Regulation)
- Member, Board of Arbitrators
- Society of Corporate Secretaries & Governance Professionals
- Association of the Federal Bar of New Jersey
- Hosted several of IQPC's panel discussions on Securities Litigation Trends and Hot Topics presented by the Chief Judge of US District Court for District of New Jersey and two other District Judges
| |