A federal judge in Providence, R.I., approved the Rhode Island Commerce Corp.'s settlement with the U.S. Securities and Exchange Commission over the state's failed $75 million deal with videogame company 38 Studios.
RICC, the state's economic development agency formerly known as the Rhode Island Economic Development Corp., will pay $50,000 under the deal, which U.S. District Judge John McConnell Jr. approved.
RI Commerce admitted no wrongdoing related to the fiasco involving former major league baseball pitcher Curt Schilling's company.
The SEC charges revolve around $75 million of muni bonds that the agency privately placed – backed by the state's moral obligation – in November 2010 to help lure Schilling's company to downtown Providence from Maynard, Mass.
Revenues 38 Studios generated from a multi-player video game project code-named Project Copernicus was to repay the loan. The bond placement memo, though, did not tell to investors that 38 Studios needed at least $75 million to produce the game and even more money to relocate to Rhode Island.
The company folded in mid-2012, prompting then-Gov. Lincoln Chafee to file the lawsuit.
SEC litigation is ongoing against Wells Fargo and Peter Cannava, a Wells Fargo banker who the SEC alleges aided in the fraud of investors.
Commerce Corp. received $61 million in overall settlements. State court settlements included those with Schilling, Wells Fargo, Hilltop Securities (formerly First Southwest), former EDC executives Keith Stokes and James Michael Saul.
