Prosecutors Demand Yuji Naka Be Sentenced To Over Two Years In Prison For Insider Trading

Sonic The Hedgehog co-creator Yuji Naka has undergone his third trial for insider trading while working at Square Enix. The prosecution is demanding that he be sentenced to two years and six months in prison.

According to Denfanminicogamer.jp, in addition to the prison sentence, they are also demanding that Naka be fined ¥2.5 million yen (over $17,000 USD) and receive a supplementary penalty of ¥170 million yen (over $1,200,000 USD). His defense team is attempting to get the number lowered and is seeking a suspended sentence.

The Prosecution argued that he had “gained an unfair advantage over ordinary investors and undermined the fairness of the market”.

Naka was first arrested in November 2022 for insider trading on the mobile game Dragon Quest Tact. This meant that Naka, an employee of Square Enix at the time, had used his knowledge as an insider to allegedly buy 10,000 shares of the game’s developer Aiming for ¥2.8 million yen (over $20,000 USD) before information about the game was revealed to the public. This is a crime under Japan’s Financial Instruments and Exchange Act.

A month later in December of 2022, he was arrested once again, this time for insider trading on Final Fantasy VII: The First Soldier where Naka allegedly bought 120,000 shares in that game’s developer ATeam Entertainment which would have been priced around ¥144.7 million yen ($834,000).

During his trial in March of 2023, Naka plead guilty to both accounts of insider trading. Two other former Square Enix employees, Taisuke Sasaki, and Fumiaki Suzuki, have also been arrested for Insider Trading alongside Naka.

Square Enix previously released a statement during Naka’s second arrest saying the following:

“We deeply regret the great concern this has caused to all concerned. We have dealt with this incident strictly, including internal disciplinary actions taken against the suspected employees.”

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