Sonic the Hedgehog co-creator Yuji Naka has been sentenced to two and a half years in prison and has been ordered to pay over $1.2 million in fines for his part of an insider trading scheme at Square Enix. Naka was first arrested in November 2022 after he was accused of purchasing shares of developer Aiming Co with the intention of selling them at a later date.


Yuji Naka is one of the co-creators of the long-lived Sonic the Hedgehog series and the former president of Sonic Team at Sega. He made a name for himself thanks to his work on Phantasy Star, Burning Rangers, and Nights Into Dreams. Following his departure from Sega in 2006, Naka joined Square Enix to work on Balan Wonderworld. Before he was accused of violating Japan’s Financial Instruments and Exchange Act, Naka claimed that he was considering retirement from game development.

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According to the Japanese site Abema Times, prosecutors in a Tokyo District Court demanded that Naka go to prison for two and a half years and pay over $1.2 million for his involvement in an insider trading scheme while working at Square Enix. Naka’s defense has called for this prison sentence and fine to be reduced, but the final decision is expected to be given on July 7. Prosecutors are also reportedly telling the court that Naka had shown no remorse and that the crime was committed based on strong criminal intent.

Sonic Creator Yuji Naka Sentenced To Prison

Going into more detail, Naka reportedly bought a total of 130,000 shares in Ateam and Aiming Co before the developers announced partnerships with Square Enix for two mobile games, Final Fantasy 7: The First Soldier and Dragon Quest Tact. His action against Japan’s Financial Instruments and Exchange Act resulted in him being arrested twice on suspicions of insider trading. He reportedly made a profit of $146.000 thanks to his illegal practice. Back in March 2023, Naka admitted to claims of this financial impropriety, saying that he netted from the eventual sale of those stocks.

This is not the first time insider trading schemes have emerged in the video game industry, as Swedish publisher and developer Starbreeze Studios was busted for using confidential information to profit financially. Also, Microsoft’s controversial deal with Activision Blizzard was under investigation due to accusations of some investors being involved in insider trading. Barry Diller, Alexander von Furstenberg, and David Geffen have been investigated for their illegal practices, but it has not yet caused serious implications.

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Source: Abema Times (Via VGC)

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