Photo/Illutration The building in Tokyo’s Shinjuku Ward housing the headquarters of Square Enix Co. (Takashi Uematsu)

The co-creator of Sega Corp.’s “Sonic the Hedgehog” is the latest video game developer to be arrested over allegations of insider trading timed with the announcement of a jointly produced “Dragon Quest” mobile game.

Yuji Naka, 57, was arrested on Nov. 18 on suspicion of violating the Financial Instruments and Exchange Law by trading in stock with privileged information.

Naka previously worked for Square Enix Co., as did Taisuke Sazaki, 38, who was arrested the previous day on the same suspicion along with his acquaintance, Fumiaki Suzuki, 40.

According to investigative sources, Sazaki and Suzuki gained several tens of millions of yen by selling shares in the company Aiming Inc. They sold the shares after Aiming announced it would jointly develop the mobile tactical role-playing game “Dragon Quest Tact” with Square Enix, which owns the franchise.

Aiming announced the collaboration in February 2020, and the smartphone game was released in July that year.

According to the announcement by the Tokyo District Public Prosecutors Office, Sazaki knew in late November 2019 that the game would soon be ready for distribution. He also knew that Aiming had decided to enter into a working partnership with Square Enix.

Between early December 2019 and early February 2020, Sazaki bought about 72,000 shares of Aiming for about 20.8 million yen ($149,000).

Sazaki passed on the information to Suzuki in late December 2019. Suzuki then purchased about 90,000 shares of Aiming for about 26.4 million yen.

According to sources, Sazaki was a member of the joint development team. Both Sazaki and Suzuki sold their Aiming shares after the company announced the joint development project with Square Enix and together pocketed several tens of millions of yen in gains.

Square Enix Holdings Co., the parent company of Square Enix, is listed on the Prime Market of the Tokyo Stock Exchange. It recorded sales of 365.2 billion yen for the year ending in March 2022.

The Nov. 18 announcement by prosecutors said Naka learned in late January 2020 that Aiming had decided to embark on the joint project with Square Enix. Before Aiming announced its involvement in the project, Naka acquired 10,000 shares for about 2.8 million yen.

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