Commerce Corporation to Pay $50,000 to Settle 38 Studios Complaint

PROVIDENCE, RI—The Rhode Island Commerce Corporation on Wednesday said it has reached a settlement with the U.S. Securities and Exchange Commission.

The case (Securities and Exchange Commission v. Rhode Island Commerce Corporation, et al.) was over a complaint about 38 Studios and the failed $75 million loan from taxpayers. In its press release, the commission described the deal as "regarding events arising in 2010."

The agreement calls for the commission to pay a $50,000 fine and never again commit the same violations.

Political leaders on both sides on the aisle renewed calls for releasing all the documents connected to the 38 Studios investigations.

Gov. Gina Raimondo issued this statement:

"As I've said for years, 38 Studios was a bad deal for Rhode Islanders that should never have occurred. Today's proposed SEC settlement over events that occurred in 2010 marks the end of all pending litigation related to 38 Studios, and Rhode Island is one step closer to moving on from this chapter in history. To that end, I have petitioned the Rhode Island Superior Court to release the 38 Studios grand jury investigation documents. Rhode Islanders deserve transparency on all public documents related to this case."

And House Minority Leader Patricia Morgan (R-District 26 Coventry, Warwick, West Warwick) also said the state should release all the documents "after the Rhode Island Commerce Corporation admits guilt." She also wants an independent investigation.

Representative Morgan went on to say, “We all know the State Police did a sloppy job at investigating this case, further keeping the public in the dark about what exactly happened. It is imperative that the state employs an independent investigator to investigate 38 Studios and also requests the Rhode Island Attorney General and Rhode Island State Police to release all reports and documents regarding 38 Studios.”

She said the $50,000 fine is "the same as admitting culpability and it’s a black mark on our great state."

Morgan went on to say, “This is the first time a Rhode Island state agency has admitted wrongdoing in this case. They are a defendant and that is precisely why the state should not be investigating itself. We need an outside investigator.

“We should take notice that the S.E.C. would never have gotten involved if it hadn’t been for former Republican State Representative Karen MacBeth, who led the House Oversight Committee and had the foresight to refer the case to the Securities and Exchange Commission.”