THE Dragon executives thought that Goldman was taking a hard look at L.& H. After all, Dragon was paying Goldman $5 million for its advice. If Goldman wasn’t conducting due diligence, what was it doing?

“They put items on and off the due diligence list,” Ms. Baker later testified. “We discussed the issues at — at basically every meeting that we were at, and we were meeting often in person or by phone, typically, several times a week in this time frame — sometimes multiple times a day, as we’ve seen. And so they knew what everybody was doing. And they were, they were directing it.”

One of the tasks was a conference call that Mr. Wayner arranged, at Ms. Baker’s request, between Dragon and Charles Elliott, a Goldman analyst in London. Dragon was wondering why L.& H.’s share price had been gyrating wildly. Mr. Wayner told Ms. Baker, he later testified, that Mr. Elliott was following L.& H.’s stock and was up to date on its fluctuations. And Mr. Elliott assured Ms. Baker that investors were worried about the market in general, rather than L.& H. in particular. He also said he expected the stock price of the combined companies to rise substantially once a merger was struck.

Years later, in his deposition, Mr. Elliott told a more complete story. He acknowledged that he actually had not been following L.& H.; that had been the responsibility of another Goldman analyst who had left the firm shortly after the Bakers retained Goldman. After the other analyst left, Mr. Elliott testified, Goldman terminated its coverage of L.& H. No one told the Bakers that Goldman was no longer covering the company they were about to bet their futures on.

Mr. Elliott also testified that he was unaware of press reports at the time that suggested L.& H. was claiming huge revenue gains in Asia. If he had been aware, he said, he would have been “very skeptical” of those gains, given the challenges that Asian languages present for speech recognition. He also acknowledged that it would not have been difficult for him to call up L.& H.’s customers and check the revenue claims.

As the Nasdaq composite index raced toward a record high that March, Dragon’s executives made fateful decisions. On March 8, the Bakers met with L.& H. executives and that company’s advisers from SG Cowen to try to reach a definitive agreement.

A few days before that meeting, Mr. Wayner of Goldman told Ms. Baker that he would be away on vacation and couldn’t make the session. He also said that he would be unable to call in and that it was pointless to send anybody else from Goldman because there wasn’t time to catch up on the deal. It was at this meeting that L.& H. proposed shifting the $580 million deal from half stock and half cash to all stock. The Bakers, with their high-priced investment bankers M.I.A., agreed.