Wells Fargo and Rhode Island state have been charged with fraud by the U.S. Securities and Exchange Commission (SEC) for their part in the 38 Studios debacle. The SEC alleges that both parties defrauded investors to the tune of $50 million in an attempt to finance the MMO Project Copernicus.
You can be forgiven for forgetting about 38 Studios -- it's been defunct for years now -- but let's bring you up to speed. The game maker was founded in Massachusetts by baseball star Curt Schilling, but moved to Rhode Island as part of the state's economic development plan, securing a $75 million loan guarantee from to build the action-RPG Kingdoms of Amalur: Reckoning and an MMO codenamed Project Copernicus.
It managed to borrow $50 million from a state agency, but couldn't secure the additional $25 million it needed. Although it released Kingdoms of Amalur, and sold over a million copies, it faced a massive shortfall and unable to pay back the money it had already borrowed. The studio was forced to close without completing Project Copernicus. When it finally filed for bankruptcy in 2012, it owed over $150 million, with less than $22 million in assets.