BISMARCK — The first investment by North Dakota’s fledgling Wonder Fund conflicted with federal rules and had to be bought out by a separate state economic development fund.

The company that was invested in also has not lived up to its commitment to establish a base in the state, and an official with the LandTrust company says it is still trying to become profitable. The Commerce Department believes the company is moving in the right direction and remains “excited” about it.

The developments came to light as the Tribune looked into a recently filed unrelated federal lawsuit against Wonder Fund overseer Kevin O’Leary and CEO Paul Palandjian. The Colorado suit accuses them of fraud; the fund’s lawyer denies the allegations.

The first Wonder Fund investment under O’Leary was $1.25 milli

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