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Sonic Co-Creator Yuji Naka Sentenced For Insider Trading, Can Avoid Jail Time

The video game developer has also been fined over $1 million.


The weird tale of an iconic former Sega developer who used insider information at Square Enix for stock trading has come to a close. Yuji Naka, co-creator of Sonic the Hedgehog and most recently the director of Balan Wonderworld, was given a two-and-a-half year prison sentence that's suspended for four years.

Jiji Press (via IGN) reports that Naka--who also worked on Nights Into Dreams and Phantasy Star Online--was found guilty of insider trading while employed at Square Enix. That means he broke the law under Japan's Financial Instruments and Exchange Act. His suspended sentence gives Naka the chance to avoid jail time by staying out of trouble during the four-year probation period.

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Now Playing: Balan Wonderworld Reveal Trailer | Xbox Games Showcase 2020

However, Naka was fined twice for an estimated $1.2 million (after converting from yen). This stems from the Sonic co-creator actually being arrested twice late last year. He was first apprehended for insider trading at Square Enix by purchasing stock in a developer named Aiming that was working on an unannounced Dragon Quest mobile game at the time. Then in December 2022, Naka was arrested again for a similar charge by investing money in the developer behind Final Fantasy VII: The First Soldier before that game was officially unveiled.

In March, Naka reportedly admitted his guilt to the insider trading charges. Prior to all of this, though, there was another legal issue between the developer and Square Enix. In April 2022, Naka said he filed a lawsuit against Square Enix regarding his work on Balan Wonderworld.

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