Takafumi Horie, 33, chief executive of the scandal-torn Internet firm, Livedoor, has been arrested on charges that he broke stock market rules and gave stockholders misleading information, BBC News reports.
Horie is well known in the Japan for his critical views of the country’s business community.
Three other executives were also arrested.
Livedoor could be delisted from the Japanese stock market if the charges are proved to be true. Horie has vehemently denied all allegations.
“I have no recollection of doing anything we are under suspicion for,” Horie wrote on his website.
The allegations against Horie were first voiced last week. The scandal has sent the Japanese business community into a spin that caused a major share sell-off and forced Tokyo’s stock market to close early last week.
The value of Livedoor’s shares has already spiraled downward by nearly 65 percent, for a decrease of nearly $4 billion off its market value.