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Former Sonic Team lead Yuji Naka hit with $1.2 million fine for insider trading

Naka will also face a 2.5 year prison sentence, suspended for four years.

TJ Denzer

July 7, 2023 9:55 AM

Image via Square Enix

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One of the more interesting stories of the past couple years has been the legal downfall of former Sonic Team lead and Balan Wonderworld creator Yuji Naka. Naka was arrested in 2022 over insider trading charges from his time at Square Enix, and the verdict for that case has been decided this week. Naka will pay penalties totaling around $1.2 million USD and will face a 2.5 year prison sentence, on a four-year suspended sentence.

The verdict in Naka’s trial was decided by the Tokyo District Court this week, as shared by SEGAbits.com. The fine has been decided for a while. Naka will pay two separate penalties, one at ¥2 million (roughly $14,000 USD) and the other at ¥171 million (around $1.2 million). The prosecutors in Naka’s case tried for a longer prison sentence, but after Yuji Naka is said to have shown remorse for his infractions, the judge reduced his prison sentence to 2.5 years on a four-year suspended sentence, meaning if Naka meets certain conditions in that four-year period, he could avoid prison.

Yuji Naka’s legal issues are said to have begun in late 2022 when he was arrested for insider trading related to Square Enix. He is said to have known about several unannounced games, including a Dragon Quest title, and bought up stock with that knowledge ahead of the reveals. This also followed the failure of Balan Wonderworld, which pushed Naka to not only leave Square Enix, but file a lawsuit against the publisher as well for its treatment of Naka and the development of the game. Naka would be arrested for his insider trading charge later that same year.

With the verdict decided, it seems the new few years will be quiet for Yuji Naka, especially regarding a mobile game he planned to develop in independent capacity. Stay tuned as we continue to follow this story for further updates.

TJ Denzer

Senior News Editor

TJ Denzer is a player and writer with a passion for games that has dominated a lifetime. He found his way to the Shacknews roster in late 2019 and has worked his way to Senior News Editor since. Between news coverage, he also aides notably in livestream projects like the indie game-focused Indie-licious, the Shacknews Stimulus Games, and the Shacknews Dump. You can reach him at tj.denzer@shacknews.com and also find him on Twitter @JohnnyChugs.