Sonic the Hedgehog co-creator Yuji Naka has reportedly been arrested on suspicion of insider trading.

According to Gematsu (via FNN Prime Online), the Special Investigation Department of the Tokyo District Public Prosecutors Office arrested Naka as part of its investigation into an insider trading scandal involving his former employer, Square Enix.

The arrest relates to an purported incident in 2020, that allegedly saw Naka purchase 10,000 share in Caravan Stories developer Aiming after learning the studio would be collaborating with Square Enix to create Dragon Quest Tact.

Naka is specifically accused of spending 2.8 million yen to purchase those shares before the partnership was announced, believing the studio's stock price would increase once the link-up was made public.

Two more former Square Enix workers, Taisuke Sasaki and Fumiaki Suzuki, have also been arrested over suspected insider trading, and are believed to have bought 162,000 shares in Aiming for 47.2 million yen before the studio's involvement with Dragon Quest Tact was revealed.

This isn't the first time Naka has made headlines since departing Square Enix in 2021. Earlier this year, the Balan Wonderworld director posted a series of tweets claiming he was removed from the project six months before the title launched.

Specifically, Naka said it was a "disgrace" that Balan Wonderworld was allowed to release in such a rough state, and said he fought to stay involved with the project until the very end. Balan Wonderworld raised eyebrows when it was released due to its lack of polish and was largely panned by reviewers. 

"Personally, I believe that it is a true disgrace that Balan Wonderworld was released in the state that it was in. I wanted to show the world an action game in its proper light. Therefore, I believe that Square Enix and Arzest are companies that care about neither games nor their fans," he tweeted back in April.

Naka said he tried to address those issues and even asked his lawyers to negotiate with his business partners so he could implement fixes, but it seems that request was seemingly ignored.