Slashdot Mirror
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."
Goldman Sachs and the $580 Million Black Hole
They are NOT.
I think the icing on the cake is the fee of 5 mil to point them to a known fraudster.
Talk about the ultimate troll move. That surpasses being Rick Rolled.
I thought Goldman Sachs were the good guys?
They are! That's why the Hope & Change President decided to put change on hold and continue the long-standing tradition of stuffing the White House with Goldman alums and associates and sending administration people back.
Stop-Prism.org: Opt Out of Surveillance
http://www.nytimes.com/2012/07/15/business/goldman-sachs-and-a-sale-gone-horribly-awry.html?pagewanted=1&_r=2&hpw
They stole money from the taxpayer's treasury. To the tune of $100 per U.S. home.
My AC stalker: " I personally agree with your posts most of the time, but that won't keep me from modding you troll"
Insightful? Almost every purported author of the Bible was at the lowest strung of society, many having been martyred. Exceptions include David, Solomon and Moses. The first two have some not so flattering things written about them and Moses was leader of a bunch of desert dwellers.
Remember that GS was on the smart side of the mortgage trade... even though they were copying what another trader was doing. They knew that the mortgage mess was going to blow up. They sold sh*t funds of mortgages while betting against them. Read William Cohen's "Money and Power: How Goldman Sachs came to rule the world." for more info.
AIG were idiots for selling insurance on investments that the had no business in. GS bought boatloads of insurance against default of investments they didn't have. That is nothing more than gambling and should be taxed as such.
Just a dude. Stuck in IT.
You fail to mention the current Secretary of the Treasury was deeply involved in those decisions.
I met the Bakers around 2002 at a neighborhood party and heard this story. At that time, Goldman's excuse was "L&H lied to us." However, given that a couple Wall Street Journal reporters exposed the fraud mostly by making some phone calls, it was clear that Goldman had done little work. I wish the Bakers the best of luck.
There are very specific rules regarding investing. If you are acting as an economic adviser to another entity, there is all sorts of legal language attached to that transaction that is supposed to insure that you are acting in the best interests of your client. It's similar to acting on behalf of someone else as their legal representative (in other words, lawyer)
If someone hires you as an adviser for their investments, and you tell them to invest in something that you know is dodgy, then you are in hot water. At the very least, there is the concept of due diligence, where you are supposed to do a through analysis of the investment before recommending it. It appears as though Goldman had done their due diligence before and decided against investing in L&H, which means they are in trouble if they then recommend someone else make a similar investment.
My Other Computer Is A Data General Nova III.
That kind of stuff happens when you have free markets.
When you have "free markets" Goldman Sachs doesn't get bailed out. You can't have it both ways - blame the free market when cronyism is the real culprit.
Do you have ESP?
That's because they are basically part of the US Gov't. How many "former" GS members have been in presidential cabinet members? Lots and for years. How many members of Congress have come from or moved to GS? Lots. They don't call it the revolving door for nothing. They're inextricably connected.
You're nothing; like me.
But the bailout required the relatively unregulated investment banks to become commercial banks, members of FDIC, and accept regulation. The Federal Reserve does act as lender of last resort for commercial banks (who do have to be members of FDIC), but had no authorization to lend money to investment banks. I think that's what he was talking about.
I'm actually working on a project related to this topic. For general info, one can look up every bank, bank holding company, saving and loan company, credit union etc., with any business in the US, at Federal Financial Institutions Examination Council's (FFIEC). You can see who owns who, who bought who, etc.
The Council is a formal interagency body empowered to prescribe uniform principles, standards, and report forms for the federal examination of financial institutions by the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB), and to make recommendations to promote uniformity in the supervision of financial institutions. In 2006, the State Liaison Committee (SLC) was added to the Council as a voting member. The SLC includes representatives from the Conference of State Bank Supervisors (CSBS), the American Council of State Savings Supervisors (ACSSS), and the National Association of State Credit Union Supervisors (NASCUS).
It's easier to be a result of the past, but more fun to be a cause of the future! http://www.spacefinancegroup.com/
And how do you propose people do that? Most people these days are given 401k's as their only retirement option, in which they are forced to pick from a short list of thieves who to trust with their money. You can try to invest for yourself with an IRA, but they'll steal from you all the same with HFT. Or you could try to trust entirely in Social Security, but that's not really enough to live on in many areas, and odds are they will have privatized (i.e. stolen) all of it within 20 years anyway.
I'm not sure what you think inflation means, but it has nothing to do with whatever it is you think you're calculating. Also, the CPI absolutely does include housing and fuel - see http://www.bls.gov/cpi/cpifaq.htm#Question_7 I guess you're thinking of "core inflation" rather than CPI but, unfortunately for you, neither has increased by anything close to what your "theory" would predict.
The corruption is far, far greater ...
http://en.wikipedia.org/wiki/Brad_Birkenfeld
In October 2001, Birkenfeld began working at UBS in Geneva, Switzerland, handling private banking, primarily for clients located in the United States. In 2005, he learned that UBS's secret dealings with American customers violated an agreement the bank had reached with the IRS.
He resigned from UBS in October 2005 and provided written whistleblower complaints to Peter Kurer, Head Counsel for UBS, and other UBS senior executives regarding the illegal practices of U.S. cross-border business.
He is the first person to expose what has become a multi-billion dollar international tax fraud scandal over Swiss private banking. Despite his unprecedented, extensive and voluntary cooperation, and registering as an IRS whistleblower, Birkenfeld is the only U.S. citizen to be sentenced to jail as a result of the scandal.
Your numbers are wrong. For the most recent actual numbers, we can take the 2011 year.
See here for the budget: http://www.gpo.gov/fdsys/search/pagedetails.action?packageId=BUDGET-2011-BUD and here for the GDP numbers: https://www.cia.gov/library/publications/the-world-factbook/geos/us.html
3.8 Trillion of 15 Trillion (roughly) is 25%.
40% of the current spending is deficit spending, but no idea where you get the idea that 60% is just financed by printing money. You need some citations for that. Finally, about 9.8% of the US GDP is deficit spending. That is a scary number - but the alternatives are scarier. And as someone pointed out, your information on the CPI is flat-out wrong.
For some who is making grand plans to influence the future, you are remarkably uninformed.
Those who can, do. Those who can't, sue.
The official rate is the inflation right now, not the inflation rate from some arbitrary year in the past until now. If you look at those official rates you'll see they were cosniderably higher than 6% around 1980.
1968 - 2012 is 44 years. 8% for 44 years would make that $1800 price be $53,000 now (you clearly used 6% for 40 years and didn't knock of 25%).
You made up your 8% number. 1800 -> 18995 over 40 years is 6.1% inflation. Over the 44 years from 1968 to 2012 it's 5.5% inflation. Whereas offical numbers have the CPI inflation at 4.4% over the last 44 years.
Official numbers have have prices rising by a factor of 6.6 over that time period - oh look inside your "factor of 5 to 10" range for carpenters and software engineer wage increases.