Yuji Naka’s name is familiar to anyone who grew up with Sonic the Hedgehog. He was a star game developer at Sega in the 1990s and later directed titles at Square Enix. So it was a shock when news broke in late 2022 that Naka had been arrested on insider trading charges.
Japan’s Tokyo District Public Prosecutors announced that Naka allegedly bought stock in two game companies (Aiming Inc. and ATeam Inc.) using secret information from Square Enix. By mid-2023, he admitted guilt and was convicted, receiving a suspended prison term and a large fine.
In this article, we will examine how the allegations arose, the timeline of events, media and public reaction, and the final legal outcome.
TL;DR
- Yuji Naka learned about secret Square Enix game partnerships in 2020-2021
- Used insider knowledge to buy stocks before public announcements: ¥2.8M in Aiming Inc.
- Sold shares for profit after announcements caused stock prices to jump
- Arrested twice in late 2022 (November and December) on insider trading charges
- Pleaded guilty in March 2023, convicted in July 2023
- Sentenced to 2.5 years suspended prison term + ¥173 million fine (~$1.2M)
- Currently serving probation until 2027, returned to game development in 2025
How Yuji Naka’s Insider Trading Allegations Began
The insider trading case centers on two separate deals in 2020.
The Dragon Quest Tact Deal (January 2020)
In January 2020, while Naka was working at Square Enix, the company was quietly collaborating with a mobile game studio called Aiming Inc. to make Dragon Quest Tact.
Square Enix had not yet made this partnership public. Prosecutors say Naka learned of the Dragon Quest deal in advance and used that knowledge to profit in the stock market.
Specifically, he allegedly bought about 10,000 shares of Aiming stock for roughly ¥2.8 million (about $20,000) before the partnership was announced.
When Square Enix eventually revealed the Dragon Quest Tact project a month later, Aiming’s stock jumped. Naka then sold his shares and made a profit.
This kind of trade, buying a company’s stock because you know a positive announcement is coming, fits the textbook definition of insider trading.
The Final Fantasy VII: The First Soldier Deal (February 2021)
In February 2021, a similar Square Enix collaboration was made public: this time with a studio called ATeam Inc. on the mobile battle-royale game Final Fantasy VII: The First Soldier.
Again, prosecutors say that Naka and a colleague at Square Enix learned the news before it was public.
Naka is alleged to have bought around 120,000 shares of ATeam stock (spending roughly ¥144.7 million, or over $1 million), knowing about the upcoming First Soldier announcement.
Once the deal was announced, ATeam’s share price rose, and Naka supposedly sold at a profit.
Discovery and Arrests (2022)
Japanese authorities regarded both trades as illegal, as Naka had insider information from his job at Square Enix and used it to trade shares ahead of public announcements.
The case came to light in late 2022. On Nov. 18, 2022, Tokyo prosecutors announced Naka’s first arrest. He was charged with insider trading related to the Dragon Quest Tact deal (the Aiming stock purchase). Two other former Square Enix employees were also arrested around that time in the same Aiming case.
A few weeks later, on Dec. 7, 2022, Naka was arrested a second time. This charge was for the ATeam/Final Fantasy First Soldier trade.
In court, Naka himself admitted the basic facts: He said he “knew the facts about the game before it was made public and bought the stock.” Japan’s courts take insider trading very seriously, with a conviction rate of about 99.9%, so Naka’s admission essentially guaranteed a conviction.
The Legal Hammer Drops
In Japan, insider trading is illegal under the Financial Instruments and Exchange Act. Naka was charged under this law.
At the July 2023 trial, the judge found him guilty on all counts. The sentence was announced on July 7: Naka would receive 2 years 6 months in prison, but that term would be suspended for four years.
In practice, this means he will not go to jail unless he commits another crime during that four-year period.
In addition, he was ordered to pay hefty fines: ¥2,000,000 and ¥171,000,000, totaling ¥173,000,000 (about $1.2 million).
The judge explicitly noted Naka’s remorse as a key factor in sparing him prison time.
Prosecutors had recommended the same penalties (2.5-year sentence, ¥172.5M fine), calling Naka’s actions malicious and stressing that he had abused his access to insider information.
Naka’s defense asked for leniency, and during the hearing, Naka apologized for hurting market fairness.
Timeline for the Yuji Naka Insider Trading Case
January 2020
Naka reportedly buys ~10,000 shares of Aiming Inc. stock for about ¥ 2.8 M. The Dragon Quest Tact collaboration is announced a month later.
February 2021
Naka and co-worker Taisuke Sazaki allegedly buy shares in ATeam Inc. (around 120,000 shares for Naka) before Square Enix’s First Soldier collaboration is revealed.
Nov 18, 2022
First arrest. Prosecutors detain Naka on suspicion of insider trading related to the Aiming/Dragon Quest Tact deal. Two other ex-Square Enix employees are also arrested in this case.
Dec 7, 2022
Second arrest. Naka is detained again on a separate insider trading charge – the ATeam/Final Fantasy First Soldier deal.
Mar 2, 2023
First court appearance. During this Tokyo District Court session, Naka pleads guilty. He tells the judge, “There is no doubt that I knew the facts about the game before it was made public and bought the stock”. This open admission sets the stage for sentencing.
June 1, 2023
Prosecutors submit their sentencing recommendation.They ask for 2.5 years in prison and a fine of ¥172.5M (about ¥1 billion). The prosecutors describe the crimes as “malicious” and note Naka showed no remorse. Naka’s lawyer counters that he accidentally saw the info and had no criminal intent.
July 7, 2023
Sentencing. The Tokyo District Court convicts Naka on both counts of insider trading. He is given a prison term of 2 years and 6 months, but the sentence is suspended for four years. He must also pay fines totaling about ¥173 million (roughly $1.2 million).
In practical terms, a suspended sentence means he will avoid jail as long as he stays out of trouble for the next four years. The judge cites Naka’s remorse in commuting the sentence.
Post-2023
Naka remains free on probation. By 2025, he has not served any prison time and resumes some public activity (see Updates). There have been no reports of further legal actions.
Updates Since Sentencing (2024/2025)
Since the verdict, Naka has largely kept a low profile but hasn’t disappeared.
In April 2024, he briefly broke his silence on social media. Naka posted on Twitter about a Square Enix producer involved in the Dragon Quest series, accusing that person of “lying in court” during Naka’s trial.
This comment made news in gaming media (e.g., Push Square), but it was more about Naka airing old grievances with Square Enix than any new legal issue.
More notably, Naka has quietly returned to game development. In February 2025, he announced an update to Pirates of Coin, an eight-year-old mobile game from Prope (the studio he founded).
On Twitter, he said, “After 8 years, I have updated our PROPE application ‘Pirates of Coin’…” describing technical changes. This suggests Naka is still active in his field and not facing further trouble.
Yuji Naka Insider Trading Verdict: Guilty
Yuji Naka was found guilty on both counts of insider trading in July 2023.
He received a suspended prison sentence of 2 years and 6 months, meaning he will avoid jail time if he stays out of trouble for four years.
He was also ordered to pay fines totaling ¥173 million (about $1.2 million). Naka is currently serving his suspended sentence and remains free on probation through 2027.
After the sentencing, the scandal seems to have faded from the news.