The Society of Professional Journalists has joined an amicus brief challenging a subpoena against former Wall Street Journal reporter Jesse Eisinger involving the New York shield law for journalists.
The subpoena stems from a federal court suit by a Massachusetts couple against Goldman Sachs & Co. for a breach of fiduciary duty arising from Goldman’s role as “exclusive financial advisor” to the couple’s company, Dragon Systems, and its merger with Belgian speech technology company Lernout & Hauspie.
According to their complaint, the plaintiffs exchanged their 5 percent interest in Dragon Systems, valued at $300 million, for shares of L&H stock, which became worthless after financial fraud came to light at the company. The plaintiffs allege that Goldman failed to adequately research and investigate L&H’s finances.
Eisinger, who now works for ProPublica, authored and co-authored a series of Journal articles about L&H, most notably one that included the results of the news outlet’s investigation revealing that L&H either lied or misrepresented its Asian customer revenues. After publication, L&H’s stock dropped 19 percent, the SEC launched an investigation, and L&H ultimately declared bankruptcy.
Authored by the Reporters Committee for Freedom of the Press, the amicus brief that SPJ joined argues that forcing Eisinger to testify would substantially weaken the protections available for journalists under the New York shield law. The law protects reporters from revealing privileged information and sources, even when compelled by subpoena. The brief was filed July 1.
The plaintiffs said in their suit that they need the testimony of Eisinger to confirm the details published in the WSJ articles about what the reporter “did to uncover the problems with L&H’s reported Asian revenues” to prove that Goldman could have done the same.
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