A Square Enix Co. ex-employee is reportedly arrested by authorities over allegations of engaging in insider trading, The Mainichi reports on Friday, Nov. 18.
The former employee is said to have engaged in insider trading using confidential, unreleased information about the development of a certain smartphone game. According to the same report, the incident follows the arrest of another employee on similar suspicions.
Insider Trading
Insider trading is illegal because it involves buying or selling confidential materials or a relationship of trust and confidence to misappropriate such materials and information.
The US Securities and Exchange Commission (SEC) tells the public that insider traders, or "tippees," could be corporate officers, directors, and employees who traded the corporation's securities after learning of significant, confidential corporate developments.
Insider trading undermines investor confidence in the fairness and integrity of the securities markets, the agency emphasizes.
The Tokyo District Public Prosecutors Office accuses Yuji Naka, a 57-year-old game creator from Tokyo's Minato Ward, of insider trading after it was discovered that the game dev had purchased 10,000 shares of Tokyo-based game creator Aiming Inc. for a total of some 2.8 million yen (USD $20,000) after learning of an unreleased title from the said company in January 2020.
The same game creator is also behind the popular action game series "Sonic," and he is accused of infringing Japan's Financial Instruments and Exchange Act because of the uncovered illegal trading practice.
Bloomberg Law tells us that FIEA provides for the imposition of criminal penalties against violations of insider trading laws, including a maximum penalty of penal servitude of up to five years and a criminal fine of up to 5 million yen.
Aiming Inc. is officially listed on the Tokyo Stock Exchange's Growth Market.
Read Also : Z Library: 'World's Largest' Pirated e-Book Source Now Shut Down-Feds Seize 2 Russians Operating It
The mobile game entitled "Dragon Quest Tact" is a game being developed by Aiming Inc. in cooperation with gaming software giant Square Enix, and Naka made some really questionable investments even when details of the game were yet to be released to the public.
Square Enix fired Naka in April 2021 due to circumstances unrelated to the most recent allegations.
Related Incident
According to an NHK3 report, Sazaki Taisuke, another former Square Enix employee, was taken into custody on Thursday, Nov. 17, on suspicion of also violating the Financial Instruments and Exchange Act. His acquaintance, Suzuki Fumiaki, was also arrested.
The two men, according to the prosecution, acquired a total of about 340,000 dollars worth of shares of the game production company after learning that Square Enix was creating a new game with a Tokyo-based studio.
The prosecutors believe Sazaki told Suzuki about the joint development to urge him to also benefit from the scheme.
By early February 2020, Suzuki is thought to have purchased about 90,000 shares of Aiming after learning about the brand-new game from Sazaki in late December 2019.
Reports tell us that Square Enix is already coordinating with authorities regarding the ongoing investigation.
Stay posted here for the latest updates.
