Sonic the Hedgehog Co-Creator Found Guilty of Insider Trading
Sonic the Hedgehog co-creator Yuji Naka has been found guilty of insider trading, but will avoid prison for now.
Verdict and Sentencing
According to Japanese news agency Jiji Press, the Tokyo District Court ruled that Naka had violated Japan’s Financial Instruments and Exchange Act by illegally buying shares based on inside information.
The judge sentenced Naka to 30 months in prison, suspended for four years. This means Naka will escape a prison term as long as he adheres to the conditions set by the order and doesn’t infringe on any further terms or laws during this time.
However, Naka also received two fines totaling ¥173 million ($1.2 million). Despite not going to prison, he will pay a substantial financial penalty for his involvement in the insider trading scheme.
Admission of Guilt
Naka pleaded guilty to the charges in March, stating that there was “no doubt” he was guilty in taking part in the insider trading scheme.
Details of the Insider Trading
After his arrest in November 2022, it was revealed that Naka, who was working on Balan Wonderworld for Square Enix at the time, had prior knowledge of Aiming’s plan to develop a new Dragon Quest mobile game called Dragon Quest Tact before its official announcement.
Naka allegedly bought approximately 10,000 shares of Aiming stock for around ¥2.8 million ($20,000), with the intention of selling them once the game was announced and Aiming’s stock value had increased.
Naka was arrested for a second time in December 2022. This time, he was accused of carrying out similar insider trading after learning confidential information that Square was planning to make Final Fantasy VII: The First Soldier with mobile developer ATeam Entertainment.
It was claimed that Naka accessed a website containing materials and minutes of investment meetings, where he learned about the joint development of the new Final Fantasy and Dragon Quest games. Armed with this knowledge, he allegedly bought 130,000 shares and earned a profit of over ¥20 million ($146,000) upon their sale.