Former Sonic Team head and Sonic the Hedgehog producer Yuji Naka has reportedly been arrested in connection with Square Enix’s ongoing insider trading investigation.
Japanese news site FNN Prime Online reports that Naka is now the latest suspect in the insider trading case surrounding the new Dragon Quest game.
On Thursday two former Square Enix employees were arrested in Tokyo as part of an alleged insider trading scheme.
Taisuke Sazaki and Fumiaki Suzuki were roped in to acquire Japanese developer Aiming’s stock, shortly before it was announced that he was working on a new Dragon Quest game.
The two reportedly bought about ¥47 million ($336,300) worth of stock in Aiming, shortly before it was publicly confirmed that a Dragon Quest Tact mobile title was in development.
Now, according to FNN, the Special Investigation Department of the Tokyo District Prosecutors Office has also arrested Naka for the same violation.
It is alleged that before the announcement of Dragon Quest Tact, Naka – who was working for Square Enix’s Balan Wonderworld at the time – bought about 10,000 shares of Aiming stock for about ¥2.8 million ($20,000).
By buying the stock before the announcement, the belief is that all three suspects may have used insider information with the intention of later selling the stock again when its price increased.
After the arrest of the first two suspects, Square Enix made a statement confirming that these were former employees and indicated that it is cooperating with the authorities in the investigation.
“Today, some media sources reported that former Square Enix employees were being investigated for alleged insider trading,” the statement continued.
“We have been fully cooperating with the requests of the Securities and Exchange Surveillance Commission. As the investigation by the Tokyo Prefectural Public Prosecutors Office continues, we will continue to fully cooperate with the investigation.
“We deeply regret the great concern this has caused to all concerned. We have dealt with this incident strongly, including internal disciplinary action against the accused employees.”
Square Enix is the former employer of Yuji Naka, where he helped the critical failure Balan Wonderland before he left the company last year.
However, development on Balan did not go so well that Naka would sue Square Enix, claiming that he was removed from the project six months before release.
Naka first spoke out against the Balan Wonderworld development in April, in an explosive series of tweets.
“Game creators should develop their games to the end, and I believe it is wrong to prevent them from achieving this goal,” wrote Naka in April, translated by VGC.
“I asked my lawyer to discuss with my business partners so that they at least allow me to solve the problems affecting the development of Balan Wonderworld until the end, but they ignored my requests, so I finally decided to open a case in court.
“It is because of this that Balan Wonderworld has received all the criticism and comments that you all know very well,” he said. “It is unfortunate that the project that I led from the beginning will be like this.
“Personally, I believe it is a real shame that Balan Wonderworld was released from the condition it was in. I wanted to show the world fighting game the right way. So, I believe that Square Enix and Arzest are companies that don’t care about the games or their fans. “