Takafumi Horie

The self-styled rebel of Japanese business was convicted today of breaking securities laws after a prosecution that many here saw as an attempt by the corporate establishment to snuff out a financial upstart whose only crime was his refusal to play by traditional rules. The Tokyo District Court found fallen Internet mogul Takafumi Horie guilty of misleading markets about the financial health of his Livedoor business empire to drive up its stock price. He was sentenced to 2 1/2 years in jail.

Spooked by a police probe into one of Japan's best-known Internet entrepreneurs, investors swamped the Tokyo Stock Exchange with sell orders today, driving the market down and forcing the world's second-largest exchange into an embarrassing early close. The exchange's woes and the massive market drop rekindled questions about the durability of Japan's economic recovery, which had enjoyed a giddy run-up in stock values over the last several months.

The apparent suicide of a 38-year-old Japanese venture capitalist has added a sinister aura to the investigation into the dealings of Takafumi Horie, the brash Internet entrepreneur at the center of a drama that has roiled stock markets. The body of Hideaki Naguchi, a former executive with Horie's multibillion-dollar Livedoor Co. online media services empire, was discovered Wednesday night in a business hotel in Naha, Okinawa, 1,000 miles south of Tokyo.

The motorcade taking Takafumi Horie across Tokyo's elevated expressways was broadcast live to a bewitched nation Monday night, its aerial shots and excited commentary just the sort of media circus the 33-year-old Internet mogul always coveted, even cultivated. This journey, however, was taking him from cocksure celebrity to accused stock cheat. The founder and chief executive of online portal Livedoor Co.

Takafumi Horie, the former CEO of the Internet firm Livedoor Co. who came to symbolize a freewheeling capitalism that challenged Japan's corporate norms, pleaded not guilty today to charges of breaking securities laws. A January raid on Livedoor sent Tokyo share prices tumbling, halting trade and rattling confidence in the world's second-largest exchange. The case embarrassed Prime Minister Junichiro Koizumi, who had supported Horie's unsuccessful run for parliament.

Once an icon for a new generation of Japanese go-go capitalists, fallen Internet mogul Takafumi Horie on Monday declared himself not guilty of accusations that he masterminded a scheme to falsify corporate earnings and inflate stock prices. Speaking on the opening day of his trial, the brash entrepreneur called the case against him "full of malicious intent from the beginning" and said, "I have not carried out or instructed such crimes as were mentioned.

Were it not for the Internet, Takafumi Horie might not have become the richest, brashest Japanese entrepreneur of his generation. And were he not so rich and brash, he might never have caught the eye of Junichiro Koizumi, Japan's prime minister, and become the celebrity candidate for parliament he is today, running as an ally of Koizumi in the election Sunday.