×
You will be redirected back to your article in seconds

Wells Fargo Agrees to Pay $800,000 in 38 Studios Settlement

Wells Fargo Securities will pay an $800,000 civil penalty to settle a lawsuit with the Securities and Exchange Commission over Rhode Island’s failed deal with former Boston Red Sox pitcher Curt Schilling and his now-defunct video game company, 38 Studios, The Boston Globe reports.

The proposed settlement was announced on Monday and is awaiting approval from a federal judge.

Although Wells Fargo doesn’t admit or deny any wrongdoing, it will be permanently barred from violating certain municipal securities and other laws under the proposed agreement.

Schilling founded 38 Studios in Massachusetts in 2006, but relocated it to Rhode Island in 2010 after striking a deal with the state’s economic development agency for a $75 million loan. The company released one game during that time, the action role-playing game “Kingdoms of Amalur: Reckoning.” It was fairly well-received by critics and reportedly sold about 1.2 million copies in 90 days — a respectable number for a new intellectual property from a fledgling studio. But, Lincoln Chafee, who was governor of Rhode Island at the time, called the game a failure and said it needed to sell at least three million copies to break even.

38 Studios officially filed for bankruptcy in May 2012, laying off its entire staff and cancelling its second project, a massively multiplayer online game codenamed “Copernicus.” Rhode Island then filed a lawsuit against Schilling and other 38 Studios backers. It’s received about $61 million in settlements from those cases, according to The Boston Globe.

The SEC later charged Wells Fargo and the Rhode Island Commerce Corporation with securities fraud, claiming the two companies knew the $75 million loan wasn’t enough for 38 Studios to complete its work on “Copernicus,” but they failed to notify investors of the risk. It also said Wells Fargo failed to disclose that it was representing both 38 Studios and the Rhode Island Commerce Corporation as a bond placement agent.

The Rhode Island Commerce Corporation has already settled its lawsuit with the SEC, according to The Boston Globe. It paid a $50,000 penalty but didn’t admit to any wrongdoing. The SEC and Wells Fargo reportedly reached a settlement agreement in January, but put it on hold because of the recent U.S. government shutdown.

Video game publisher THQ Nordic recently acquired the rights to the “Kingdoms of Amalur” IP and is reportedly considering sequels and new content.

Popular on Variety

More Gaming

  • The Game Awards

    The Game Awards 2019 Nominees: 'Death Stranding,' 'Control' Lead the Field (Full List)

    The Game Awards 2019 unveiled nominations for this year’s event, led by Hideo Kojima’s epic “Death Stranding” with nine nods and Remedy/505 Games’ “Control” with eight nominations. This year’s Game of the Year nominees, in addition to “Control” and “Death Stranding,” are “Super Smash Bros. Ultimate,” “Resident Evil 2,” “Sekiro: Shadows Die Twice” and “The [...]

  • Google Stadia

    Google Stadia Reviews: Game-Streaming Service Not Ready for Primetime

    The first takes on Google Stadia, the internet giant’s new game-streaming service that debuts Nov. 19, are out. And the consensus is that Stadia is needed more time in the oven before it was served up to the gaming crowd. Google’s big promise with Stadia is that players can access top-tier game titles without a [...]

  • Game Awards OrchestraThe Game Awards, Show,

    Game Awards 2019 to Play on 53 Cinemark Screens Alongside 'Jumanji: The Next Level'

    This year’s Game Awards, recognizing the top video games, creators and esports of 2019, is coming to the silver screen. In a three-way partnership, the Game Awards, Cinemark Theatres and Sony Pictures are teaming on a superticket program pairing the Dec. 12 live simulcast of the 2019 Game Awards in 53 Cinemark locations with a [...]

  • John Carmack John Carmack, Chief Technical

    Oculus CTO John Carmack to Step Down

    One of the driving forces behind Facebook’s virtual reality efforts is leaving his post: Oculus CTO John Carmack announced Wednesday afternoon that he was transitioning to a “consulting CTO” role this week, and devote most of his time to new challenges outside of the company. “I will still have a voice in the development work, [...]

  • Magic Leap Raising Another Funding Round

    Magic Leap Is Raising Another Big Funding Round

    Augmented reality startup Magic Leap is raising even more money. The company is currently in the process of raising its Series E round of funding, a spokesperson told Variety on Monday. Magic Leap previously raised around $2.6 billion, including $280 million from NTT Docomo in April. “Magic Leap is in the midst of a significant [...]

  • terminator vr

    VRstudios Launches 'Terminator' VR Experience at Dave & Buster's (EXCLUSIVE)

    Just in time for the launch of the new “Terminator: Dark Fate” movie, Dave & Buster’s is getting a “Terminator: Guardian of Fate” virtual reality experience, courtesy of VRstudios. The experience, which features the voice of Linda Hamilton as Sarah Connor, is launching at 130 Dave & Buster’s locations across the U.S. Just like previous [...]

  • Death Stranding

    'Death Stranding': How PlayStation Tackled the Unique, Mysterious Marketing Campaign

    There are a few reasons why “Death Stranding” might seem like a marketing slam dunk. It’s the first game from Hideo Kojima, the video game legend behind the “Metal Gear” series, since 2015, and also the first since he reformed his Kojima Productions into an independent studio, partnered with Sony Interactive Entertainment. It boasts Hollywood [...]

More From Our Brands

Access exclusive content