NewsRadio 920 WHJJ and the Associated Press

PROVIDENCE, R.I. (AP) — Rhode Island has rehired a financial adviser that it is suing for fraud and legal malpractice in connection with the failed 38 Studios deal.

The Providence Journal reports that Lincoln-based First Southwest was chosen in March by the state Budget Office and the Treasury for a new two-year contract as the state's financial advisor.

The governor's office says First Southwest was picked after a thorough review over another company, PFM Group.

First Southwest is one of 14 defendants in the state's 2012 lawsuit that attempts to recoup the losses from the $75-million investment in 38 Studios, Curt Schilling's video-game company.

First Southwest's attorney, Gerald Petros says the company is gratified to be chosen for the job, and is contesting the allegations in the lawsuit.