How the Inventors of Dragon Speech Recognition Technology Lost Everything

First time accepted submitter cjsm writes "James and Janet Baker were the inventors of Dragon Systems' speech recognition software, and after years of work, they created a multimillion dollar company. At the height of the tech boom, with investment offers rolling in, they turned to Goldman Sachs for financial advice. For a five million dollar fee, Goldman hooked them up with Lernout & Hauspie, the Belgium speech recognition company. After consultations with Goldman Sachs, the Bakers traded their company for $580 million in Lernout & Hauspie stock. But it turned out Lernout & Hauspie was involved in cooking their books and went bankrupt. Dragon was sold in a bankruptcy auction to Scansoft, and the Bakers lost everything. Goldman and Sachs itself had decided against investing in Lernout & Hauspie two years previous to this because they were lying about their Asian sales. The Bakers are suing for one billion dollars."

Comments

Re:L&H at fault, not GS

[BlueStrat]

And it's way too convenient that Goldman was representing a competitor (Nuance) at the same time.

Goldman was negligent and possibly also double-dealing.

Goldman's only hope here is to get out on a standing issue. If Goldman actually has to go to trial on this, they're screwed. A jury will crucify them. And rightfully so.

My wild guess? This settles before trial for a couple hundred million.

Nah.

Obama will simply declare "Executive Privilege", like he did to cover for himself and Holder, and GS execs will walk away.

How and why? Well, because GS are the Obama WH Executive Advisors.

Obama Administration: Deputy Director, National Economic Council
Former Goldman Sachs Title: Financial Analyst

Obama Administration: Chairman, PresidentÃ(TM)s Foreign Intelligence Advisory Board
Former Goldman Sachs Title: Board Member (Chairman, 1990-94; Director, 2005-)

Obama Administration: Commissioner, Commodity Futures Trading Commission
Former Goldman Sachs Title: Partner and Co-head of Finance

Obama Administration: Undersecretary for Economic, Energy and Agricultural Affairs, State Department
Former Goldman Sachs Title: Vice Chairman, Goldman Sachs Group

Obama Administration: Ambassador to Germany
Former Goldman Sachs Title: Head of Goldman Sachs, Frankfurt

Obama Administration: Chief of Staff to Treasury Secretary, Timothy Geitner
Former Goldman Sachs Title: Lobbyist 2005-2008; Vice President for Government Relations

Obama Administration: Advisor to Treasury Secretary, Timothy Geitner
Former Goldman Sachs Title: President and Chief Operating Officer (1999-2003)

Strat