Judge to decide whether Saul testimony should be included in 38 Studios civil suit

A FEDERAL judge on April 3 ordered R.I. Commerce Corp. to pay $50,000 to settle allegations it defrauded investors to fund the now-defunct video game company 38 Studios LLC, owned and run by former Boston Red Sox pitcher Curt Schilling.
A FEDERAL judge on April 3 ordered R.I. Commerce Corp. to pay $50,000 to settle allegations it defrauded investors to fund the now-defunct video game company 38 Studios LLC, owned and run by former Boston Red Sox pitcher Curt Schilling.

PROVIDENCE – A R.I. Superior Court judge on Friday is expected to hear arguments about whether the court should order U.S. Securities and Exchange Commission testimony of J. Michael Saul to be included in an ongoing civil suit regarding 38 Studios LLC.
The hearing is the newest installment in the state’s ongoing suit against Wells Fargo Securities LLC, Barclays Capital PLC and several others accused of misleading the state into making a $75 million taxpayer-backed loan to finance the now-bankrupt video game venture 38 Studios. The state is asking for up to three times its liability for bonds floated in the failed investment, which could amount to more than $300 million, by some measures.
Wells Fargo is asking the court to order the release of Saul’s testimony given before the SEC in 2014.
But the state objects, claiming Wells Fargo’s request is coming too late and will undoubtedly further delay the lawsuit that began in 2012, among other reasons.
“Not only did Wells Fargo delay a year and eight months, but Wells Fargo failed to comply with discovery deadlines,” lawyers state in court documents.
Wells Fargo, however, contends the SEC testimony is “of critical importance,” as Saul played a key role as deputy director of the R.I. Economic Development Corp., now the R.I. Commerce Corporation, which acted as a conduit in allowing the $75 million loan guarantee.
Wells Fargo argues the absent transcript could strengthen its motion to strike a long-standing request from the state for summary judgement, as the former EDC deputy director provided an affidavit last February giving “a very different account of his role,” compared with when he was deposed in 2013.
“The blatant contradictions between his prior deposition testimony and his affidavit are no small matter,” according to Wells Fargo lawyers.
The state in August proposed a $12.5 million settlement with several defendants, including Saul, which was approved by the court in September.
Associate Justice Michael A. Silverstein is expected to preside at the hearing. Silverstein is also expected to set a schedule for trial.

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