Former Sonic Team head and Sonic the Hedgehog programmer Yuji Naka has reportedly been arrested in connection with the ongoing Square Enix insider trading investigation.
Japanese news site FNN Prime Online reports that Naka is now the latest to be suspended in a case of insider trading surrounding the new Dragon Quest game.
On Thursday, two former Square Enix employees were arrested in Tokyo as part of a suspected insider trading scheme.
Taisuke Sazaki and Fumiaki Suzuki were arrested for acquiring stock in Japanese developer Aiming, before it announced it was working on a new Dragon Quest game.
The two reportedly bought nearly ¥47 million ($336,300) worth of Aiming stock, before it publicly confirmed it was developing the mobile title Dragon Quest Tact.
Now, according to FNN, the Tokyo District Public Prosecutors’ Office’s Special Investigation Department has also arrested Naka for a similar potential violation.
It is said that before Dragon Quest Tact was announced, Naka – who was working on Balan Wonderworld for Square Enix at the time – bought approximately 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 knowingly used insider information to later sell the stock again when its value rises.
Following the arrest of the original two suspects, Square Enix issued a statement confirming that the pair were former employees and stating that it was cooperating with authorities in the investigation.
“Today, some media outlets are reporting that former Square Enix employees are being investigated for suspected insider trading,” the statement read.
“We are fully cooperating with the requests from the Securities and Exchange Surveillance Commission. While the investigation by the Tokyo District Public Prosecutors Office continues, we will continue to fully cooperate with the investigation.
“We deeply regret the great anxiety this has caused to all concerned. We are dealing strictly with this incident, including internal disciplinary actions taken against the suspected employees.
Square Enix is Yuji Naka’s former employer, where he led the critical failure Balan Wonderland before he left the company last year.
However, the development of Balan was so bad that Naka later sued Square Enix, claiming that he was fired 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 must improve their games to the end, and I believe it is wrong to prevent them from fulfilling this goal,” Naka wrote in April, translated by VGC.
“I asked my lawyer to negotiate with our business partners to at least allow me to address the development issues of Balan Wonderworld until the end, but they ignored my requests, so I finally decided to file a case in court.
“It is because of this that Balan Wonderworld has received all the criticism and comments that you all know,” he said. “Unfortunately a project that I led from the beginning could turn out like this.
“Personally, I think it’s a real tragedy that Balan Wonderworld was released in the state where it is located. I want to show the world an action game in its right light. So, I believe that Square Enix and Arzest are companies that don’t care about games or their fans.