The former Square Enix and Sega developer Yuji Naka has now been sentenced to two years and six months in prison, with a probation period of four years. Following legal proceedings, he was convicted by the Tokyo District Court with additional two fines totaling over ¥170 million. However, if Naka does not adhere to these conditions, he can spend up to 2.5 years in prison. Naka was found guilty of insider trading by violating the Financial Instrument and Exchange Act. Naka will also have to pay a 2 million yen (US $14,000) fine as well as around 171 million (US$1.19million) in an additional penalty for the money he made through insider trading, making a total of 173 million yen (US$1.205 million) in fines.
According to the ruling, Naka, 57, knowing that the development of new mobile games related to the popular Dragon Quest and Final Fantasy series was underway, bought shares worth around 148 million yen in 2020 and 2021 in the two firms which jointly developed the games with Square Enix before the information was made public.
"Known as a world famous game developer, (Naka) had access to information on the joint development," Judge Madoka Hiruta declared at the Tokyo District Court.
The judge added that the defendant "undermined the fairness and soundness of the stock market and the trust of investors," noting he (Naka) earned a profit of 23 million yen.
A sentence for another former Square Enix employee, Taisuke Sazaki, who was also charged with insider trading, has been finalized after he received a prison term of three years, suspended for five years. Sazaki was also ordered to pay 4 million yen in fines with additional penalties of around 176 million yen.
The conflict first began back in December 2022 after Naka and some associates were found using confidential information regarding a game release and proceeded to buy as much stock from the company as they possibly could, earning them a massive profit after the game was officially disclosed. But, Japan’s Financial Instruments and Exchange Act considers that a crime that led to the arrest.
