Co-creator of Sonic the Hedgehog receives suspended prison sentence for insider trading

Co-creator of Sonic the Hedgehog, Yuji Naka, has been handed a suspended prison sentence and fines amounting to approximately $1.2 million (or 173 million yen) for his involvement in insider trading, as reported by Japanese news outlet Jiji (via Polygon).

Although a 2.5-year prison sentence was given, Jiji reports that it has been suspended for four years. This means that Naka is unlikely to be imprisoned unless he commits further crimes during this period. Last year, Naka was arrested twice for two separate insider trading incidents, both of which occurred in 2020 while he was working at Square Enix.

The first case involved Naka and two co-workers purchasing 162,000 shares worth around $332,000 (47.2 million yen) in the game developer Aiming before Square Enix publicly announced their collaboration on a mobile Dragon Quest game. The three individuals were arrested in November 2022.

The second incident, for which Naka was arrested just a month later, involved him and another Square Enix employee purchasing 120,000 shares valued over $1 million (144.7 million yen) in another games studio that Square Enix planned to partner with. The studio in question, Ateam, worked with Square Enix on the mobile game Final Fantasy VII: The First Soldier. The court ruling encompasses both cases.

Naka joined Sega in 1983, where he played a key role in creating the iconic Sonic the Hedgehog character. After leaving Sega in 2006, he joined Square Enix to work on the critically panned Balan Wonderworld from 2018 to 2021. Naka claims that he was removed from the team six months before the game’s release and subsequently filed a lawsuit against the company.