State, Wells Fargo charged with fraud for 38 Studios deal

Staff Writer
Columbus CEO

PROVIDENCE, R.I. (AP) — The U.S. Securities and Exchange Commission has charged Rhode Island's economic development agency and Wells Fargo with defrauding investors for the state's disastrous $75 million deal with 38 Studios, the failed video game company started by former Red Sox pitcher Curt Schilling.

The civil complaint filed Monday in U.S. District Court in Providence accuses the Rhode Island Commerce Corp. and Wells Fargo Securities of making materially misleading statements when they sold the bonds used to fund the deal.

Also named are former agency officials Keith Stokes and Michael Saul, and Peter Cannava, Wells Fargo's lead banker on the transaction.

38 Studios ran out of money in 2012, less than two years after the state agreed to give it a $75 million loan guarantee in exchange for moving from Massachusetts.