Sonic creator Yuji Naka found guilty in insider trading scandal

Yuji Naka gets suspended prison sentence and has to pay massive fine

Yuji Naka, a co-creator of video game character Sonic the Hedgehog, has been found guilty of violating the Financial Instruments and Exchange Act and been sentenced to a prison sentence of two and a half years, suspended for four years, alongside the payment of a massive fine.

That means he won’t go to jail if there’s no further misconduct in the next four years, but the total amount of $1,202,452 he has to forfeit is definitely a hefty punishment.

The former game developer had been accused of and sentenced for insider trading during his troubled tenure at Square Enix, where he directed the creation of Balan Wonderworld.

He bought shares of a development company called Aiming before the announcement of its next game and then pulled off the same stunt on a much larger scale with shares of ATeam – the studio would later announce a Final Fantasy game. These moves, which had been enabled by his access to internal documents and meeting protocols, made him a profit of around $150,000.

Yuji Naka was arrested two times in 2022 in the context of these indictments. He had left Square Enix a year prior after disagreements with the leadership on the state of Balan Wonderworld, suing the company over his removal as game director.

The sentence made by the judge of a Tokyo District Court is completely in line with what the prosecution demanded and comes after a rather flimsy defense attempt by Yuji Naka and his legal team. He fully admitted to the charges back in March 2023 and, according to the prosecution, showed no sign of remorse for what he’d done.

It’s unlikely that Yuji Naka will be able to return to game development in any large capacity with this sentence hanging over his head.