38 Studios' state loan comes under federal scrutiny

The U.S. Securities and Exchange Commission has begun an investigation of the $75 million deal struck between the Rhode Island EDC and defunct Kingdoms of Amalur developer 38 Studios.
38 Studios, the one-time developer of Kingdoms of Amalur: Reckoning which closed its doors in May of 2012, is now the subject of a federal probe under the U.S. Securities and Exchange Commission (SEC) concerning its $75 million taxpayer-backed loan from the Rhode Island Economic Development Corporation (EDC). Both the EDC and SEC have declined to offer specifics on the investigation, which concerns the arrangement struck between the EDC and 38 Studios founder Curt Schilling. With 38 Studios' closure, the rights to Amalur have reverted to the state, and the outstanding amount of the $75 million loan has been passed on to taxpayers. Rhode Island state senator Dawson Hodgson, who has in the past called for an independent probe into the 38 Studios deal, told WPRI that the SEC investigation is more than warranted. "You've never seen a scandal of such historic proportions essentially disappear with little or no accountability for the havoc that was wreaked," Hodgson said. "It seems clear there was a lot of self-service as to how this deal was put together, and that is usually the starting point."

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