The U.S. Securities and Exchange Commission is investigating a $75 million financing by R.I. Economic Development Corporation given to Curt Schilling's failed video game start-up 38 Studios. Shilling was able to convince the state government that not only was his video-game venture a smart investment but that it would also create jobs. Now thanks to backing Curt Shillings gaming idea the state of Rhode Island is saddled with $100 million debt (the initial loan plus interest).
The EDC confirmed that the SEC has had an active investigation into the loan deal. The EDC's spokeswoman Melissa Czerwein confirmed that lawyers from Cohen & Gresser "were retained based on their expertise in relation to an inquiry from the SEC." Still the agency refused to answer detailed questions regarding the matter because according to Czerwein the EDC "doesn’t discuss ongoing matters related to 38 Studios and maintains a level of confidentiality as requested by the SEC".
We don't even know what they are looking for exactly. Still we shouldn't take it personally, it was so hush hush that most state officials were unaware of the investigation. As a result they would just redirect request for comments back to the EDC or simply cite pending litigation against 38 Studios as a reason to refuse comment.
Last week however, the EDC agreed to a proposal by a trustee to spend $150,000 to conduct an investigation into the company's officials and directors. This investigation would be done in addition to pending legislation currently underway.
Rhode Island lawmakers on the House Committee on Oversight are supposed to meet Wednesday afternoon to look over the terns of the loan and its stand on job creation.