RI Recovers $25.6 Million in 38 Studios Suits from Wells Fargo and Barclays, SEC Case Continues
Wednesday, August 24, 2016
While the criminal investigation has been a bust, private attorneys engaged by then-Governor Lincoln Chafee have reached an agreement with two of America’s largest financial institutions - Wells Fargo and Barclays Capital for upwards of $25.6 million.
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This agreement coupled with the previous agreements pushed the amount recovered to more than $40 million of more than $88 million in losses incurred by the State of Rhode Island in its failed investment in Curt Schilling’s 38 Studios gaming company.
For Wells Fargo, the mega bank still faces charges from the Securities and Exchange Commission — as does the state of Rhode Island.
The settlement agreed to today was brokered by retired Judge Francis Darrigan.
The legal wrangling between the State of Rhode Island’s attorney — Max Wistow — and the attorneys for Wells Fargo and Barclays have gone on for years and will have costs the two financial institutions in the millions.
SEC Update
According to Bond Buyer, one of the Wells Fargo executives was dropped from the SEC's case.
"A federal judge on Friday dismissed Securities and Exchange Commission charges against Peter Cannava, a banker involved in an ill-fated private placement for startup video game company 38 Studios.
Judge Jack McConnell, who sits on the U.S. District Court for Rhode Island, ruled that there weren't enough facts to support the SEC's claims that Cannava aided and abetted defrauding investors.
However, Wells Fargo, which employed Cannava at the time and served as underwriter on the deal, and the Rhode Island Economic Development Corp., which issued the bonds, remain as defendants in the commission complaint.
Related Slideshow: 38 Studios - Wells Fargo and Barclays Settlement
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