PROVIDENCE, R.I. â€” The state’s economic development agency said on Wednesday it has settled a lawsuit brought against it by the U.S. Securities and Exchange Commission over the state’s failed $75 million deal with former Boston Red Sox pitcher Curt Schilling’s videogame company.
The Rhode Island Commerce Corporation said it agreed to pay a civil penalty of $50,000 and in the future not violate the law it was accused of violating in the offer or sale of any securities.
The lawsuit accused the agency and the Wells Fargo financial services company of making misleading statements about bonds used to fund the deal. The agency didn’t admit or deny the allegations. A Wells Fargo spokesman didn’t immediately respond to a phone call or an email seeking comment. The SEC declined to comment.
The settlement, if approved in U.S. District Court, would mark the end of the state’s pending litigation related to 38 Studios.
Democratic Gov. Gina Raimondo said the state is one step closer to moving on from this chapter.
The civil penalty must be paid to the SEC within 14 days after entry of the final judgment.
Schilling’s company moved from Massachusetts to Rhode Island in 2010 in exchange for a $75 million state loan guarantee. It went bankrupt less than two years later.
The state sued to recoup the lost money. A judge approved a $16 million settlement with the final defendant in the case in February.
A number of other parties had previously settled, including Schilling and other 38 Studios executives, lawyers and companies that worked on the deal and officials at the economic development agency. The total settlements end up at about $61 million.
Schilling, who also played for the Baltimore Orioles, the Houston Astros, the Philadelphia Phillies and the Arizona Diamondbacks before ending his career with Boston in 2007, has said 38 Studios fully disclosed its financial condition to the state.
Jennifer McDermott, The Associated Press