Mr. Takafumi Horie, a former Internet mogul known for his defiance of the old-guard business establishment, was sentenced to 2 1/2 years in prison Friday for violating the Securities and Exchange Law. The sentence by the Tokyo District Court is extremely rare in view of the fact that people convicted of similar crimes usually receive suspended sentences.

The ruling has revealed that the rapid growth of Mr. Horie's Livedoor group was mirage-like, supported by manipulating he stock market through window-dressing and by spreading false information. It also hints that the judiciary is determined to take a strict stance against any move to take advantage of legal loopholes related to stock transactions and mergers and acquisitions.

Mr. Horie was convicted of conspiring with four senior executives to report a pretax profit of about 5 billion yen for the business year through September 2004 while the group had an actual loss of 300 million yen. Profits were inflated by including fictitious business sales as well as sales of Livedoor shares through dummy investment bodies. He was also found guilty of spreading false information in connection with an attempt by an affiliate, Livedoor Marketing, to take over a publishing company in order to raise the affiliate company's stock price.