Sonic the Hedgehog creator Yuji Naka was arrested in November of last year for insider trading, and after pleading guilty in March, has been sentenced to prison for two and a half years.
As reported by Denfanminicogamer.jp, Naka was also fined twice for 2.5 million and 170 million, however, his defence is seeking to lower these numbers. Insider trading is when a person illegally trades in stocks to their own advantage using confidential information. In Naka's case, it was believed that he purchased stock in two developers before plans about games in development were made public so that he could sell it at a later date when it would be worth more.
For context, Naka joined Square Enix to develop his newly created platformer Balan Wonderworld in 2018. Jump ahead five years to 2022 and it was discovered that he and Dragon Quest 11 middleware manager Taisuke Sazaki had invested in ATeam Entertainment before plans to develop mobile spin-off Final Fantasy 7: The First Soldier had been made public, hence the allegations of insider trading.
He was arrested for a second time only a month later in December of last year after Japan's Special Investigation Department announced that he was the third suspect in an insider trading case regarding Dragon Quest Tact. Again, Naka was alleged to have known about its existence prior to the title being announced, and as such had purchased 10,000 shares of developer Aiming's stock. This was once again alongside Sasaki but also former Dragon Quest 10 event manager Fumiaki Suzuki.
The prison sentence was made today in Naka's third trial where he was accused of violating the Financial Instruments and Exchange Act for insider trading for both Aiming and ATeam. When he chose to plead guilty in March, he reportedly said, "There is no doubt that I knew the facts about the game before it was made public and bought the stock."
At the time of his arrest and indictment, Naka was no longer working at Square Enix. He chose to leave the studio after Balan Wonderworld underperformed both critically and commercially. However, SE said that it would help authorities with the investigation when he was indicted in December.
"We deeply regret the great concern this has caused to all concerned," Square Enix said. "We have dealt with this incident strictly, including internal disciplinary actions taken against the suspected employees."
Naka was alleged to have purchased shares worth more than 100 million yen each, hence the lofty fine of 172 million, which is around $1.2 million or just under one million pounds (989,344).