Yuji Naka Admits Insider Knowledge in Square Enix Insider Trading Case

[GX -The Spindash-]

Today in his first trial, former Sonic Team head Yuji Naka admits to having knowledge of unannounced games prior to buying stock in Square Enix partners.

As originally reported by TBS News DIG, and translated by Alex Kraus on Twitter, Naka stated in Tokyo District Court, “There is no doubt that I learned the facts about the game before it was announced and bought the stock.”

In December 2022, Naka was arrested twice under accusation of two insider trading incidents, including purchase of 2.8¥ million of stock in DRAGON QUEST TACT developer Aiming Inc. and 144.7¥ million of stock in Final Fantasy VII: The First Soldier developer ATeam prior to each game’s announcement.

Naka was employed by Square Enix from 2018 through 2021, overseeing the development Balan Wonderworld with developer Arzest until he was removed from the project prior to launch.

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[ShinyGems]

Wow. I know this has been said before, but I guess Mr. Yuji Naka is not alright. I wonder what his punishment will be?

[DaBigJ]

It'll probably either be a jail sentence or forced retirement, probably the former

[ShinyGems]

3 hours ago, DaBigJ said:

It'll probably either be a jail sentence or forced retirement, probably the former

I see. I would prefer both given the kind of person Yuji turned out to be.

I would even say he needs to learn somehow, but given his refusal to adapt to things among other factors. I doubt he will.

So why did he do the crimes he did, anyway?

[GX -The Spindash-]

1 hour ago, ShinyGems said:

So why did he do the crimes he did, anyway?

Greed most likely. Insider trading is one of those crimes where there's no clear victim per say. It's basically like cheating at gambling, except the gambling in this situation is the stock market.

[SticksSuperFan14]

1 hour ago, GX -The Spindash- said:

Greed most likely. Insider trading is one of those crimes where there's no clear victim per say. It's basically like cheating at gambling, except the gambling in this situation is the stock market.

I mean him leaving the Sonic series and Balan Wonderworld falling apart probably played a part in that.

[GX -The Spindash-]

22 minutes ago, SticksSuperFan14 said:

I mean him leaving the Sonic series and Balan Wonderworld falling apart probably played a part in that.

Probably not. He left the Sonic series about 15 years prior, and mathematically would have started the actual act of insider trading long before it was clear Balan was going to be a problem. Dragon Quest Tact was announced in Feb. 2020, meaning he likely would have bought the stock in 2019 or very early 2020, roughly nine months before he would have been removed from the project. He was also among at least one other employee who was arrested for the same offense while working for Square Enix.

The second incident with FF7: The First Soldier was much, much closer to Balan's release, but it would also mean he had somewhere in the realm of a million bucks to drop on stock.

[Zoomzeta]

9 hours ago, ShinyGems said:

Wow. I know this has been said before, but I guess Mr. Yuji Naka is not alright. I wonder what his punishment will be?

If it's a plea deal situation, maybe the punishment won't as severe? 

[Rabid-Coot]

Looking at the first result for Insider trading punishement japan its up to 5 years prison time or a fine up to 5 million yen or both.

https://www.jpx.co.jp/english/regulation/comlec-publication/publication/b5b4pj000000wgw5-att/b5b4pj000000wh03.pdf

[DaBigJ]

He's pleading guilty, folks

[FlameStream]

This is not surprising when you know that Japan has a 99% conviction rate.

We won't really know the full story, but anyone in his situation - innocent, guilty or in-between - are better off cooperating with the authority once they're set on you.