The U.S. Securities and Exchange Commission on Monday charged a Wells Fargo & Co unit and a Rhode Island agency with civil fraud stemming from a bond deal for a now-bankrupt video-game company founded by former Boston Red Sox and Philadelphia Phillies pitcher Curt Schilling.

Wells Fargo Securities and Rhode Island's economic development agency defrauded investors to finance the company, called 38 Studios, the SEC said. The company was named after Schilling's Major League jersey number.

The charge stems from a $75 million bond offering in 2010 that was part of a Rhode Island program intended to spur economic development, the SEC said.

Wells Fargo disputes the SEC's allegations and will respond to them in court, a spokesman said.

The state's economic development agency, the Rhode Island Commerce Corp, is reviewing the SEC's complaint, a spokeswoman said. The agency previously filed a lawsuit against Wells accusing it of not disclosing material information about the 38 Studios deal to its board and investors, the spokeswoman said. That lawsuit also names two former executives of the agency.

The Rhode Island Commerce Corp did not tell investors that 38 Studios faced a funding shortfall to produce a particular video game, the SEC said in its complaint.

The state agency loaned $50 million to 38 Studios, which needed another $25 million to produce the game. Unable to get the extra money, 38 Studios defaulted on the loan without producing the video game, the SEC said.

Wells and its lead banker in the offering, Peter Cannava, who is also charged in the case, misled investors by not telling them about a side deal with 38 Studios, the SEC said. Wells received nearly double the amount of compensation it had disclosed to investors in offering documents because of that deal, according to the SEC.

Cannava's lawyer, Brian Kelly, said the allegations "lack merit."

Two former executives with the Rhode Island agency, Keith Stokes and James Saul, have already settled charges of abetting the fraud without admitting or denying the allegations, the SEC said. Each will pay a $25,000 penalty and cannot participate in future municipal securities offerings, the SEC said. Their lawyers did not return calls requesting comment.

Stokes and Saul are the former executives named in the agency's own lawsuit.

The agency's financial adviser in the deal, First Southwest Company LLC, settled separate allegations that it violated rules by not properly documenting services it was providing. First Southwest, which the agency is also suing, did not admit or deny the findings. Its lawyer did not return a call requesting comment.

When it went under in 2012, 38 Studios said it owed more than $150 million and had less than $22 million in assets. Schilling said the company personally cost him $50 million.