Thursday, July 19, 2012

Speech Recognition Technology Inventors Lost Everything

"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." - Full Article Source