Turkey: All you need to know about the stock market scandal Burak Ünveren Pelin Ünker October 2, 2026 Nearly half a million investors are affected, arrests have been made, and a female politician from the ruling party has resigned. What is behind the stock market manipulation scandal in Turkey?

Turkey's stock market crisis affects almost half a million Turkish investors and has already caused the resignation of a female politician of the AKP Investors in Turkey want one thing above all else: for their money to retain its value. Given inflation of around 30%, that is not exactly easy. As a result, many people are buying gold, foreign currency or stocks and increasingly, mutual fund shares that promise high returns.

But the stock market has become a trap for around half a million Turkish investors. In mid-September, the benchmark BIST 100 index plummeted by 6% in a single day and lost about 12% within just a few trading days.

This sharp drop in stock prices was triggered by a major market manipulation scandal. Approximately 455,000 investors have been affected, more than 45 people have been arrested and a high-ranking politician from the ruling Justice and Development Party has resigned. What happened?

Everything started when some investment fund providers had trouble making timely repayments to investors. Among those affected were funds managed by the companies Pusula Portfoy and Tera. Two Tera funds alone held assets totaling around €6.5 billion ($6.37 billion).

In response, the Capital Markets Board (SPK) intervened and shut down the funds of seven asset managers, including Tera, Pusula and Atlas. According to the state-run news agency Anadolu, a total of 131 funds are set to be liquidated.

The Istanbul Public Prosecutor's Office is now investigating charges of fraud, violations of the capital markets law and the formation of a criminal organization, Justice Minister Akin Gurlek announced.

The suspicion: The fund companies are alleged to have artificially inflated the value of their funds, while in reality their funds contained worthless "junk stocks." Among the 45 people arrested so far are executives from investment firms. In addition, the assets of 42 individuals and 46 legal entities have been frozen, according to Gurlek on Istanbul Stock Exchange is also taking action: 27 stocks will be removed from the BIST 100 benchmark index as of October 1. Will investors get their money back?

The funds are being liquidated: Their assets will be sold and the proceeds distributed to investors in proportion to their fund shares. The deadline for this has been extended from three to six months. According to Aysel Gundogdu, an independent financial advisor in Istanbul, this is intended to reduce selling pressure so that stocks are not sold at fire-sale prices. However, this does not mean that the liquidation of each fund will take six months. Depending on market conditions, it may be completed more quickly.

Only, there is no guarantee. An investment fund is not a savings account and any loss in value affects the investor. Gundogdu expects that money market funds will largely be redeemed. With hedge funds and equity funds holding "junk stocks" that are virtually untradeable, however, the situation could prove more difficult. It is important to distinguish between market losses and damages resulting from potential irregularities.

Economist and columnist Guldem Atabay emphasized that a distinction must be made between price losses and manipulation: Investors bear the market risk, but they do not have to accept false information, artificially inflated prices, or a lack of oversight. Are the fund company and managers liable for the damages?

If funds are closed or liquidated, the shares and other securities in the portfolio can be sold. The question is how much they are worth and how easily they can be sold.

Financial expert Gundogdu believes that the fund's assets will not cover investors' claims. Furthermore, she says there have been structural failures. "The crisis is far greater than a simple liquidity crisis. There are flaws in management and oversight." She therefore considers it possible that the assets of the fund founders and managers could also be tapped to make up for the shortfall.

Economist Atabay calls for those responsible to be identified and for the damages to be recovered from them. Following the liquidation of the funds, it must be clarified who is responsible for any legal violations. "Liquidation is no substitute for accountability," Atabay said.

Fatma Betul Sayan Kaya of the ruling AKP asked Turkish President Erdogan to resign What are the political costs of the crisis?

The crisis has already led to the resignation of a high-ranking female politician in the ruling AKP party. Fatma Betul Sayan Kaya, deputy party chair and former minister of family affairs, asked Turkish President and AKP leader Recep Tayyip Erdogan to "relieve her of all her posts." This has been a phrase frequently used within the AKP for years when someone is forced to resign.

She was facing allegations regarding stock transactions by her and her husband, Ilyas Kaya, in connection with the fund crisis. Political responsibility, she wrote on social media, goes beyond legal responsibility. She said her position should not hinder the investigation.

The opposition now intends to bring the issue before Parliament. Selcuk Ozdag, deputy leader of the Yeni Yol parliamentary group, announced that as soon as Parliament reconvenes, he will submit a motion for a parliamentary investigation. The investigation is intended to determine whether politicians are involved in the manipulation scandal.