One of the co-creators of the long-lived Sonic franchise and former head of Sonic Team at Sega, Yuji Naka, has been arrested a second time for insider trading. In November, the Sega veteran was arrested for insider trading after it was alleged that he had purchased shares of developer Aiming Co in 2020, right before the company announced that it was working on Dragon Quest Tact, a mobile game that released in 2021.
After leaving Sega in 2006, Naka eventually made his way to Square Enix to work as director on Balan Wonderworld. Two of Naka’s colleagues at the company, Fumiaki Suzuki and Taisuke Sasaki, knew that Aiming Co had signed a lucrative Dragon Quest contract with Square Enix and allegedly made around $335,000 USD by taking advantage of their inside knowledge. Naka reportedly used the information to purchase approximately 10,000 shares of the indie studio and later sold them for roughly $20,000.
Three weeks later, according to Japanese site Asahi, Naka and Sasaki have been arrested again for violating Japan’s Financial Instruments and Exchange Act. This time, the two are accused of using advanced knowledge about the mobile title Final Fantasy 7: The First Soldier to purchase more than 200,000 shares of developer Ateam. When the battle royale game was announced in February 2021, they allegedly sold the shares and earned “hundreds of millions of yen.”
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This isn’t the first time that games industry insiders have been accused of using confidential, non-public information to profit financially. In March, three people were accused of investing $108 million in Activision Blizzard right before the Microsoft acquisition announcement. These investors reportedly have ties to the company’s CEO Bobby Kotick and allegedly had insider knowledge of the pending buyout. One of the accused, Barry Diller, attributed the timely investment to coincidence.
In 2018, Swedish game publisher and developer Starbreeze Studios was raided by authorities when one of its employees fell under suspicion of insider trading. The company is the publisher behind Dead By Daylight and Overkill’s The Walking Dead and also developed Payday 2. Swedish Economic Crime Authority officials arrested Chief Financial Officer Sebastian Ahlskog and also confiscated computers from Starbreeze headquarters. Ahlskog was found guilty of insider trading in February 2020, though the conviction was overturned on appeal in September 2021.
Even Ubisoft found itself embroiled in accusations of profiteering when, in 2016, French stock market regulator AMF fined five Ubisoft executives for insider trading. Former Ubisoft Montreal CEO Yannis Mallat and four other employees were ordered to pay a total of $1.2 million, though the company denied the accusations and said that the entire thing was a “serious misunderstanding.”
Sources: PC Gamer, Asahi (via GamesRadar), Gamesindustry.biz