More On

Shield law protects reporter from cross-examination

A 2nd Circuit case against Goldman Sachs turns into a debate over New York's shield law

When James and Janet Baker filed suit against Goldman Sachs & Co., alleging that inadequate research by the investment bank cost them $300 million, they likely never intended to test the scope of New York’s journalist shield law.

But their efforts to force Wall Street Journal reporter Jesse Eisinger to substantiate their claim against Goldman ended up before the 2nd Circuit, which, on Feb. 15, upheld a ruling from the Federal District Court for the Southern District of New York, quashing their subpoena of Eisinger.

Quirky Element

The underlying case involved Goldman Sachs’ role as adviser to the Bakers in a merger of their company, Dragon Systems, with Lernout & Hauspie (L&H). The couple claimed breach of contract and fiduciary duty, saying Goldman failed to adequately research L&H’s finances, resulting in the loss of their $300 million investment when L&H filed for bankruptcy within months of the merger.

Senior Editor

Mary Swanton

Bio and more articles

Join the Conversation

Advertisement. Closing in 15 seconds.