PROVIDENCE, R.I. (AP) — Rhode Island's economic development agency has hired legal counsel to respond to an inquiry from the federal Securities and Exchange Commission about the agency's $75 million loan guarantee to former Red Sox pitcher Curt Schilling's failed video game company.

Economic Development Corp. spokeswoman Melissa Czerwein said Wednesday the agency retained a law firm for a response, but she would not provide details about what the SEC asked for or say whether there is a formal investigation.

"The EDC doesn't discuss ongoing matters related to 38 Studios and maintains a level of confidentiality as requested by the SEC," she said.

The EDC has paid the Cohen & Gresser law firm more than $100,000 for work from October of last year to February, according to the agency.

SEC spokesman Kevin Callahan said his agency does not confirm or deny the existence of investigations.

WPRI-TV first reported on the inquiry.

The EDC filed a lawsuit last year against Schilling and other former executives at his defunct company as well as some of the agency's own former officials, who were architects of the deal. The suit alleges fraud, misrepresentation and breach of fiduciary duty, among other things, and claims the defendants knew 38 Studios would run out of money by last year but concealed that from the agency's board.

38 Studios filed for bankruptcy in June 2012. The state is now on the hook for about $90 million related to the deal, which was financed with bonds.

The federal bankruptcy trustee in the case also wants to explore possible legal action. The EDC board recently voted to allow the trustee to use up to $150,000 in assets recovered from the company to investigate potential claims against its former officers and directors and other parties.

Federal prosecutors investigated the 38 Studios deal but said last year they would not bring charges. Rhode Island State Police are continuing a criminal probe, Col. Steven O'Donnell said Wednesday.

According to the SEC's website, agency staff may conduct what is known as an informal inquiry, involving interviews and the review of documents, or a formal investigation, which could include subpoenas.

The EDC would not say whether the agency had received a formal order of investigation from the SEC or received subpoenas.

On Wednesday, a legislative committee continued its review of what went wrong with the state investment in 38 Studios. The House Oversight Committee is combing through 15,000 pages of documents relating to the loan guarantee and the EDC's supervision of it. The committee chairman, Rep. Michael Marcello, D-Scituate, said the committee will likely "invite" some key figures to speak to the committee.

At least two committee members are calling for the power to subpoena individuals and documents. The committee can vote to subpoena witnesses or documents, but the subpoenas would require the approval of House Speaker Gordon Fox, D-Providence.

Rep. Karen MacBeth, D-Cumberland, said she will seek a vote on subpoenas during the committee's next hearing, which has not been scheduled. MacBeth said she wants to subpoena former EDC officials and Gov. Donald Carcieri. She said she'd also like to hear from top legislators like Fox and Senate President Teresa Paiva Weed to see what they knew about the loan guarantee program before it was approved.


Associated Press writers David Klepper and Michelle R. Smith contributed to this report.