Jan 23 A jury said on Wednesday that Goldman
Sachs Group Inc was not negligent in the $580 million
sale of Dragon Systems Inc to Lernout & Hauspie, which collapsed
afterward in a massive accounting fraud scandal.
The jury said that Goldman, the New York investment bank,
did not make negligent misrepresentations during the sale
process, according to the verdict announced in the civil case 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. The Bakers and two early Dragon
employees sought several hundred million dollars in damages.
But lawyers for Goldman said it wasn't the investment bank's
job to sniff out the accounting fraud that ultimately doomed
Lernout & Hauspie and made the remaining stock held by the
Bakers worthless. The Bakers owned 51 percent of the company but
only were able to sell a few million dollars worth of L&H stock
before the collapse.