Suspended sentence sought by defense
According to a report from outlet Abema Times, (as translated by VGC) Sonic the Hedgehog co-creator Yuji Naka has been sentenced to 2.5 years in prison — in addition to a $1.2 million (USD) fine — for his role in several insider trading schemes that took place during his time at developer Square Enix.
The ruling was handed down at the Tokyo District Court earlier this morning, wherein the prosecutor’s office successfully argued that Naka had violated Japan’s Financial Instruments and Exchange Act, noting it believed Naka had shown “no signs of remorse” for the offense. Naka was first arrested in November 2022 under suspicion that he, along with other Square Enix employees, had used insider knowledge in order to draw large sums of money on the stock market. Naka was then arrested again a month later on additional Insider Trading charges.
The case argued that Naka, alongside fellow former Square Enix employee Taisuke Sazaki, knowingly invested in Japanese developer ATeam Entertainment, ahead of the announcement that the studio would be announcing 2021 mobile release Final Fantasy VII: The First Soldier. Naka reportedly purchased 120,000 shares in ATeam at a cost of around ¥144.7 million yen (roughly $834,000 USD).
In a separate incident, Naka, Sazaki, and a third employee, Fumiaki Suzuki were charged with purchasing stock in another studio, Aiming, ahead of Square Enix revealing that the studio would be working on Dragon Quest: Tact. In this instance, Naka is suspected of having purchased ¥47 million (roughly $336,300 USD) of shares before the public announcement. The prosecution claimed Naka found out about these deals ahead of time by accessing an internal website containing investment meeting transcriptions.
Naka’s defense team is hoping to reduce the fine and is seeking a suspended sentence in hopes of preventing Naka from serving any jail time.
Naka left Square Enix in 2021, following the critical and commercial failure of lurid platformer Balan Wonderworld. After the fact, Naka would also file suit against the publisher, arguing that he had been removed from Balan’s development six months ahead of its much-maligned release.
Yuji Naka could be sentenced to 2.5 years in prison for insider trading [VGC]
