Yuji Naka has been handcuffed for the second time on suspicion of insider trading.
We’ve written about it before, but Naka has once again found himself in the crosshairs of the Japanese authorities… but this time, it’s for another mobile game. It was also at Square Enix, with a game developed by a third-party studio. It’s Final Fantasy VII: The First Soldier, made at Ateam (this free-to-play battle royale has the funny situation that it launched on November 17, 2021, for iOS and Android, and Square Enix has already announced that it will be discontinued on January 11, just over a year later!).
Same story: Naka found out the game was in the works before the public announcement, which Square Enix did in February 2021, and eventually, Naka and two of his colleagues swooped in to buy shares. The Tokyo District Public Prosecutors Office (according to Asahi) alleges that Naka bought 120,000 shares for 144.7 million yen ($1.05 million) in Ateam because he knew the company’s stock value would increase after the announcement of Final Fantasy VII: The First Soldier (it is called insider trading, which is a criminal offense). Taisuke Sasaki, an ex-Square Enix employee, bought 91,000 shares for 105 million yen ($763K), and his accomplice bought about 10,000 shares for 11.8 million yen ($85K). The prosecution accuses Naka and Sasaki of making hundreds of millions of yen on the deal. There is one difference from the Dragon Quest Tact case: the special investigation team has indicted the suspects for violating Japan’s Financial Instruments and Exchange Act…
Naka’s work ethic is also questionable. An anonymous team member told Yahoo Japan that he allegedly gave strict instructions to his team and to the co-developer of Balan Wonderworld, Arzest (which Naka directed). He demanded that the crew work weekends and even wanted a 1-2 month postponement while refusing to compensate Arzest financially for it! He was also accused of abusing his power in emails and sent several emails saying, “why are you all attacking me?” when he was arguing with a YouTuber about the game’s soundtrack. Yahoo calls the developers “Company X,” but it’s Arzest.
It is not the first time Naka has been accused of insider trading. It can no longer be said that “he was just involved.” You can’t wash that off… and his leadership mentality has also tarnished his reputation.