Wednesday, January 23, 2013

How Goldman won a $580M suit over Dragon sale

From Reuters: A federal jury on Wednesday gave Goldman Sachs Group Inc a sweeping legal victory in the $580 million sale of Dragon Systems Inc to Lernout & Hauspie, saying the Wall Street bank was not negligent in arranging a deal that ultimately collapsed 13 years ago.

The jury cleared Goldman of claims of negligence, intentional misrepresentation and breach of fiduciary duty, and others, in the civil case, according to the verdict announced in U.S. District Court in Boston.

Dragon founders Jim and Janet Baker, pioneers in the field of speech recognition software, accused Goldman investment bankers of being negligent in the 2000 sale of their company to Belgium-based Lernout & Hauspie, which collapsed in a massive accounting fraud. The Bakers and two early Dragon employees sought several hundred million dollars in damages.

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