Report: Yuji Naka arrested in connection with Square Enix insider trading investigation

Square Enix scrutinized over alleged stock offenses

Yuji Naka, the co-creator of Sonic the Hedgehog franchise, has reportedly been arrested in Japan as part of an investigation into an insider trading scheme at Square Enix. According to Japanese news site FNN Prime Online, Naka is one of a handful of individuals singled out by the Tokyo District Public Prosecutors’ Office Investigation Department.

Yesterday, Japanese officials detained two Square Enix employees, named as Taisuke Sazaki and Fumiaki Suzuki, for allegedly purchasing major stock shares in studio Aiming, right before the announcement of mobile title Dragon Quest: Tact. It is reported by FNN Prime that Sazaki and Fumiaki acquired around ¥47 million (roughly $336,300 USD) of shares in lieu of the announcement of the game’s development.

FNN: Tokyo District Public Prosecutors Office arrested 57-year-old game creator Yuji Naka in context of insider trading related to new installment from popular Dragon Quest franchise.https://t.co/KhsPBB676m

— Takashi Mochizuki (@6d6f636869) November 18, 2022

Earlier this morning, it was reported that Yuji Naka had become a suspect in the same investigation, with the belief that the former Sonic Team head also acquired large shares during the same period — allegedly purchasing ¥2.8 million (around $20,000 USD) in Aiming stock. It is believed that the three individuals learned of the upcoming announcement, and picked up these shares in advance, with a goal of selling them once the announcement hit and Aiming’s stock value increased.

“We have been fully cooperating with requests from the Securities and Exchange Surveillance Commission,” said Square Enix in an official statement. “As the investigation by the Tokyo District Public Prosecutors Office is underway, we will continue to fully cooperate with their investigation.”

“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.”

Naka left Square Enix in 2021, following the critical and commercial failure of Balan Wonderworld. Naka would file a lawsuit against his former employer, accusing them of having removed him from the project six months before its eventual release.