Türkiye Arrests Executives After Multibillion-Dollar Stock Market Scandal

Turkish authorities arrested 20 suspects and placed 51 others under judicial control on Friday following investigations into widespread capital market manipulation. The crackdown follows a volatile week for the Borsa Istanbul stock market, where the BIST 100 index plunged more than 7.5 percent on Wednesday, triggering a market-wide circuit breaker and ending the week down approximately 8.5 percent.

Justice Minister Akin Gurlek announced the detentions, which include four fund executives and 16 individuals accused of using social media to spread speculative content. The crisis was triggered when a popular fund manager announced an inability to repay clients, exposing risky bets on illiquid stocks and margin trading. Among the affected is Tera Portföy, whose flagship fund held $5 billion in assets and reported returns of nearly 43,000 percent over two years before its closure.

To stabilize the financial system, the Capital Markets Board ordered the liquidation of 130 to 131 funds managed by seven companies, affecting up to 514,000 investors with assets estimated between $19.8 billion and $21.4 billion. Ziraat Bank and Is Bank were appointed to oversee the process. While Finance Minister Mehmet Simsek stated there is no systemic risk, the Central Bank of the Republic of Türkiye has injected liquidity to contain the fallout. Meanwhile, MSCI Inc. warned of potential coordinated trading and a possible review of Türkiye's emerging-market designation.