Wells Fargo & Co. agreed to settle a U.S. Securities and Exchange Commission fraud lawsuit related to a $75 million bond offering for 38 Studios Inc., a now-bankrupt video game company founded by former All-Star major league baseball pitcher Curt Schilling, Reuters reported. The settlement in principle with the bank’s Wells Fargo Securities unit was disclosed in a Jan. 10 filing with the federal court in Providence, Rhode Island. Terms were not disclosed. Wells Fargo and the SEC said that the partial federal government shutdown is delaying a final settlement, and asked a federal judge to put the case on hold. Wells Fargo was accused of concealing from investors that 38 Studios would face a $25 million shortfall even after the October 2010 bond offering from Rhode Island Commerce Corp., a state economic development agency. The SEC said 38 Studios received only $50 million from the offering, with most of the rest set aside for interest and other payments, after claiming to need $75 million to develop a video game code-named Copernicus. Wells Fargo was also accused of concealing its overall fees related to 38 Studios from investors.
