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Tuesday, December 11, 2012

Goldman lawyer says bank not liable for Dragon founders' losses, (NYSE: GS)

A Goldman Sachs Group Inc attorney argued on Tuesday that the bank cannot be liable for the losses of a husband and wife pair who sold their company to a Belgian software firm that collapsed in an accounting fraud, since Goldman had not been hired to seek out a fraud.The Wall Street giant is facing off in U.S. District Court in Boston against the founders of speech-recognition software company Dragon Systems, who contend they lost their life's work and about $600 million after selling their company to Lernout & Hauspie in an all-stock deal months before L&H collapsed."There is no question that Dragon and its stockholders were also defrauded," said John Donovan, an attorney with Boston law firm Ropes & Gray, in his opening remarks defending Goldman in the civil suit. "Goldman's job was not to detect fraud. When you hire a banker, you ask it to do certain things but delving into the books, doing accounting and finding fraud is not one of them."A day earlier, the attorney for Janet and James Baker, who founded Dragon in 1982 in their suburban Boston home with $30,000, had argued that the couple relied on Goldman's advice in agreeing to sell their firm.

The Goldman Sachs Group, Inc. (Goldman Sachs) is a global investment banking, securities and investment management firm that provides a range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Shares of GS traded higher by 1.77% or $2.07/share to $119.08. In the past year, the shares have traded as low as $86.90 and as high as $128.72. On average, 4183090 shares of GS exchange hands on a given day and today's volume is recorded at 2062688.