A Belgian court convicted the founders of the once high-flying speech recognition software company Lernout & Hauspie Speech Products of fraud, writing the final chapter in the story of a company that once saw its market value soar to nearly $10 billion and attracted investments from Microsoft, according to The Wall Street Journal report Monday.
Jo Lernout and Pol Hauspie were sentenced to five years in prison, but the court indicated it expected the pair would serve only three years. The software company, founded in 1987 in Belgium, filed for bankruptcy protection in 2000 and was subject to a U.S. Securities and Exchange Commission investigation that alleged the company had used a variety of means to artificially inflate its revenues and income. The company settled with the SEC without admitting or denying responsibility, the article notes.
At the time Lernout & Hauspie was in operation, speech recognition was touted in the tech industry as cutting edge and on the verge of taking off. But a decade later, it is only now becoming prevalent. In 2001, Nuance Communications acquired most of Lernout & Hauspie's assets. The company sells a line of speech recognition software called Dragon.