Sonic the Hedgehog Creator Is Arrested in Japan Yuji Naka is embroiled in an insider trading scandal involving former Square Enix employees..

The co-creator of the iconic video game Sonic the Hedgehog was arrested today by the Special Investigation Department of the Tokyo District Public Prosecutors Office for alleged insider trading, according to a report in Variety.

Naka Yuji, along with two other former employees of game developer Square Enix, was taken into custody on charges of insider trading.

The scandal involves Square Enix and the online game production company Aiming. Between December 2019 and December 2020, the two companies quietly planned a joint venture to create a new Dragon Quest mobile phone game.

But Yuji and associates gained access to sensitive information about the upcoming deal before the public announcement, purchasing 10,000 shares of Aiming stock for approximately $20,000. The illegal trading scheme violates the Financial Instruments and Exchange Law.

At press time, it was not yet known if any of those arrested sold their stock.

Who is Yugi Naka?

Yugi Naka in 2005. Photo by Kevin Winter/Getty Images

Naka, 57, is a cult figure in Japan. In 1991 while working for the video game company Sega, he co-created Sonic the Hedgehog, a game featuring a blue, spiky-haired hedgehog. Sonic was Sega's answer to the wildly popular game series "Super Mario," made by Nintendo.

Sonic became a mega-hit for Sega, but Naka didn't feel he received the proper credit for contributing to the company's financial success. He left the parent company to join the American Sega Technical Institute, where he developed new iterations of "Sonic, " only to return to Sega and Japan in 1994.

In 2006, Naka left Sega again to launch his game company Prope, which made games for the Nintendo Wii device. He joined Square Enix in 2016 but left the company earlier in 2022 after being removed as director of the game "Balan Wonderworld."