38 Studios have been shut down for 4 years give or take a few moments of time we cannot account for.The SEC has charged Wells Fargo Securities and the Rhode Island Commerce Corporation (formerly the Rhode Island Economic Development Corporation) with defrauding investors of $75 million in bonds to loan 38 Studios money.
RIEDC apparently loaned $50 million to 38 Studios for the development of Project Copernicus and the money to later be paid back from the game's revenues. SEC alleges 38 Studios informed both the RIEDC and Wells Fargo that it would need $75 million to finish the game. However the information was not passed on.
SEC Enforcement Division director Andrew Ceresney made a few statements on the matter.
"Municipal issuers and underwriters must provide investors with a clear-eyed view of the risks involved in an economic development project being financed through bond offerings. We allege that the RIEDC and Wells Fargo knew that 38 Studios needed an additional $25 million to fund the project yet failed to pass that material information along to bond investors, who were denied a complete financial picture."
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