Goldman Sachs Group Inc. won a $580 million negligence suit over its role as adviser to speech-recognition pioneer Dragon Systems Inc. in a doomed merger, Bloomberg News reported yesterday. A federal jury rejected the claims of Dragon's founders Jim and Janet Baker and two other shareholders that Goldman Sachs failed to properly vet Belgium-based Lernout & Hauspie Speech Products NV. The all-stock deal in June 2000 was rendered worthless months later when the fraud at Lernout & Hauspie was exposed and the company filed for bankruptcy. The verdict relieves Goldman Sachs of responsibility for a sale that left its clients with worthless shares in a failed company. The four Dragon founders sold a portion of their Lernout & Hauspie shares for $11 million before the stock collapsed and the Bakers lost the technology they spent decades developing.
