Fraud Charges Filed Against Rhode Island, Bank in Curt Schilling Video Game Company Fiasco
The saga of Curt Schilling’s failed video game company just won’t end.
Federal securities regulators have filed civil fraud charges against the Rhode Island Economic Development Corp. and Wells Fargo Securities for allegedly deceiving investors who purchased municipal bonds to fund 38 Studios, according to the Boston Globe.
Rhode Island issued $75 million worth of bonds to coax the former Red Sox pitcher’s video company into leaving Massachusetts for the Ocean State in 2010.
According to documents filed in a Providence federal court, the Securities and Exchange Commission said that the state agency and Wells Fargo did not tell investors that the company would need more than the initial $75 million to create the game. After failing to raise the funds, 38 Studios ended up defaulting on the loan.
Schilling’s attempt at getting into the world of video games suffered a grisly death in 2012 less than two years after its big move.
Even as the money was drying up, the company nudged its employees to continue doing their jobs, although it could not compensate them. In the end, nearly 400 workers lost their positions, leaving Rhode Island with the tab to repay investors.
Schilling has so far declined to comment on this news.