MANHATTAN (CN) – A married couple suing Goldman Sachs cannot depose Wall Street Journal reporter Jessie Eisinger to discover information protected by journalist’s privilege, a federal judge ruled.
Janet and James Baker cited Eisinger’s article as key evidence in their case against Goldman Sachs, a company they say was their “exclusive financial adviser” in a merger gone disastrously awry.
They say the bank negligently and fraudulently advised them to merge all $300 million worth of stock from their company Dragon Systems with Lernout & Hauspie, a Belgian speech-technology company that went bankrupt after its financial fraud came to light in 2000.
Eisinger’s series of investigative articles prompted the Securities and Exchange Commission probe that led to Lernout & Hauspie’s shuttering.
One such article, which Eisinger co-authored, was titled “Lernout & Hauspie Surges in Korea, Raising Questions.” Published on Aug. 8, 2000, it stated that “18 of about 30 companies claimed by L&H as customers were contacted by this newspaper,” and revealed that some of these clients did not do business with L&H at all and others did less business than L&H claimed.
“Essentially, Plaintiffs contend that if a journalist could uncover this information, then surely Goldman Sachs should have been able to do the same,” U.S. District Judge Barbara Jones wrote in an order quashing the subpoena last Tuesday.
Jones agreed with Eisinger that journalists enjoy “absolute privilege” from revealing confidential information.
“Plaintiffs inevitably would have to ask questions regarding Eisinger’s techniques for conducting his investigation, the backgrounds of Eisinger’s co-authors and the paper’s editorial staff, and whether he consulted with any experts or other sources in the course of the investigation,” the order states. “These topics are key parts of the newsgathering process, and as such are protected by the New York Shield Law.”
Although the subpoena was quashed in Manhattan, the federal case is currently pending in Boston.