Sonic the Hedgehog Creator Yuji Naka is now facing prison time over his insider trading case.
What Insider Trading is All About and Yuji Naka’s Trick
Insider trading is trading a company’s securities by individuals with access to confidential or material non-public information about the company. Taking advantage of this privileged access is considered a breach of the individual’s fiduciary duty hence can be arrested and will face jail time if convicted. In this case, Naka purchased stock in two developers before plans about games in development were made public. He sold it at a later date which he could profit more because its value rose up exponentially.
Prison Time and Big Fines
Last November 2022, Naka was arrested for insider trading and was sentenced to prison for two and a half years after pleading guilty last March 2023. According to the website Denfanminicogamer.jp, he was fined twice for 2.5 million yen and 170 million yen. His defense is now seeking to lower the fines to ease his burdens. They are also asking for a suspended sentence claiming that Naka “accidentally saw information that was extremely unrelated to [his] work.”
According to the prosecutors, Naka shows no signs of remorse. There will be a final judgment tomorrow, July 7, 2023.
How It All Started
Naka first joined Square Enix in 2018 to develop his newly created platformer Balan Wonderworld, which flopped gloriously when it launched. Last November 2022, he and Dragon Quest 11 middleware manager Taisuke Sazaki invested in ATeam Entertainment before plans to develop mobile spin-off Final Fantasy VII: The First Soldier had been made public. This was the cause of his insider trading allegations. This was his first arrest by the authorities.
The Sonic creator was then arrested for the second time a month later after Japan’s Special Investigation Department revealed that he was the third suspect in an insider trading case regarding Dragon Quest Tact. He was together again with Sasaki but with another suspect, former Dragon Quest 10 event manager Fumiaki Suzuki.