By Jonathan Stempel

NEW YORK (Reuters) – Goldman Sachs Group Inc has beat a married couple’s allure in a suit implicating the Wall Street bank of neglect for setting up the $580 million (367.88 million pounds) sale of their speech-recognition business to Lernout & & Hauspie, which quickly collapsed in an accountancy scams.

The 1st UNITED STATE Circuit Court of Appeals in Boston on Wednesday let stand rulings against James as well as Janet Baker, that hired Goldman to coordinate the all-stock acquistion of Dragon Units Inc at the height of the 2000 technology bubble.

Goldman had been accused by the Bakers as well as two former Dragon staff members of negligence, misstatement, violation of fiduciary task and unjust company techniques for letting the sale undergo regardless of problems about Lernout’s accountancy.

A federal jury ruled for Goldman on a lot of cases in January 2013, and a court ruled for Goldman on the staying unfair business methods claim five months later.

Composing for the charms court, Chief Court Sandra Lynch turned down arguments that the jury conclusion was tainted by malfunctioning directions, and also that the judge erred in locating that Goldman’s conduct needed to be “egregiously wrong” for it to be accountable.

“Goldman’s conduct, even if sloppy and unforthcoming, was not unreasonable or deceitful,” Lynch wrote for a three-judge panel.

Lawyers for the Bakers did not quickly react to demands for remark. Goldman representative Michael DuVally stated the bank is kindlied with the choice.

The claim was handled in Boston, and is an unusual situation of a significant U.S. banking visiting trial over a merging instead of resolving.

Goldman agreed in June to pay $67 million (42.49 million pounds) to resolve a suit in the very same court charging acquistion companies of colluding to depress costs of firms they acquired.

‘BEVY’ OF CONCERNS

The Bakers were leaders in speech-recognition modern technology, producing formulas that let computers comprehend as well as react to human speech.

They established Dragon in 1982, and also held a bulk stake when they consented to market it to Lernout in March 2000, after receiving passion from firms consisting of Ford Motor Carbon monoxide’s Visteon unit.

Lernout completed the acquistion in June 2000, making Goldman a $5 million cost, however began to untangle two months later among discoveries of inflated earnings and missing clients. It applied for bankruptcy that November, leaving its stock worthless.

The Bakers recouped even more than $75 million in settlements with Lernout authorities, and its lenders and also auditors, prior to putting Goldman in their sights.

Goldman competed that its work was to set up the buyout, not perform due diligence that might discover Lernout’s fraud, and also that the Bakers were in a hurry to market.

Evidence consisted of a Feb. 29, 2000, memorandum in which Goldman urged “thorough due diligence” on Lernout’s revenue, related-party transactions as well as bookkeeping for purchases.

Lynch claimed that memo raised a “bevy” of problems, however located no evidence that Dragon asked Goldman to examine Lernout a lot more.

The other complainants were Dragon employees Paul Bamberg as well as Robert Roth, which held even more than 8 percent of its stock. Subtlety Communications Inc now owns the Dragon software.

The situation is Baker et al v. Goldman Sachs & & Co et al, First UNITED STATE Circuit Court of Appeals, No. 13-2173.

(Modifying by Matthew Lewis)

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