A lawyer for Goldman Sachs said Tuesday that the investment bank was not at fault for losses the owners of a Boston-area technology firm, Dragon Systems Inc., incurred after the Belgian company that bought their business in 2000 collapsed from fraud, just months after the acquisition.
The bank’s lawyers opened their defense in a lawsuit brought by the founders of Dragon in US District Court in Boston. James and Janet Baker, along with two other cofounders, sued Goldman Sachs, which they hired to assist in the acquisition, for allegedly misleading them into accepting an all-stock transaction worth $580 million with Lernout & Hauspie Speech Products. When the company went bankrupt, its stock became worthless. The Bakers and other Dragon shareholders lost millions of dollars.