Sonic Creator Yuji Naka Faces Two-Year Prison Sentence

Sonic Creator Yuji Naka Faces Two-Year Prison Sentence

Yuji Naka, co-creator of Sonic the Hedgehog, has been sentenced to over two years in prison for his involvement in an insider trading scheme during his time at Square Enix

Renowned game developer and Sonic the Hedgehog co-creator, Yuji Naka, has been handed a prison sentence of two and a half years and ordered to pay fines totaling $1.2 million after being found guilty of insider trading at Square Enix. In November 2022, Naka was arrested for purchasing shares in developer Aiming Co with the intent of selling them at a later date, leading to the legal charges. Naka is widely recognized for his contributions to iconic games such as Phantasy Star, Burning Rangers, and Nights Into Dreams, and was the former president of Sonic Team at Sega before joining Square Enix to work on Balan Wonderworld. Prior to the insider trading scandal, Naka had mentioned retiring from game development.

Prosecutors in a Tokyo District Court have demanded that Naka be sentenced to two and a half years in prison and pay a fine of over $1.2 million for his involvement in an insider trading scheme during his time at Square Enix, according to Abema Times, a Japanese news site. Naka's defense team has requested a reduction in the sentence and fine, but the final decision is set to be announced on July 7. Prosecutors have also claimed that Naka exhibited no remorse and that the crime was committed with a strong criminal intent.

Sonic Creator Yuji Naka Faces Two-Year Prison Sentence


According to reports, Naka purchased 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. He was subsequently arrested twice on suspicion of insider trading, as his actions were deemed to be in violation of Japan's Financial Instruments and Exchange Act. It is alleged that he profited from this illegal activity to the tune of $146,000, and in March 2023, he admitted to the charges. Sadly, this is not the first instance of insider trading being uncovered in the gaming industry. Starbreeze Studios, a Swedish developer and publisher, was also caught using confidential information to make financial gains. Similarly, Microsoft's deal with Activision Blizzard was subject to investigation following allegations that some investors had engaged in insider trading. While figures such as Barry Diller, Alexander von Furstenberg, and David Geffen have also been investigated for their illegal practices, the consequences of such actions have yet to be fully realized.

Source: Abema Times (Via VGC)