Earthquake in Bursa, Istanbul... Government campaign dismantles coordinated stock market manipulation networks
Turkey’s Capital Markets Board (SPK) has taken strict regulatory and legal action against dozens of individuals and fund managers, accusing them of coordinated manipulation of stock prices on the Istanbul Stock Exchange. These precautionary and punitive measures include:
Temporary trading bans: Authorities imposed two-year trading bans on dozens of individuals, asset managers, and investment fund managers (including fund managers at Bousola Portfolio and Terra Portfolio) on suspicion of manipulating the stock prices of specific companies.
The Board filed formal criminal complaints against the implicated parties with the Public Prosecutor’s Office. Police also raided the offices of certain financial brokerage firms (such as Info Yatirim) and detained the chairman of its board of directors for investigation.
As a precautionary and automatic measure in cases of “financial fraud and the formation of criminal organizations to manipulate the market,” Turkish public prosecutors and courts issue judicial orders prohibiting travel abroad and ordering the arrest of the accused to ensure the smooth progress of investigations and prevent their flight.
These actions followed the detection of “coordinated manipulation” and the concentration of billions of liras in a narrow circle of low-liquidity stocks to achieve artificially inflated returns. This caused a liquidity crisis and led some funds to fail to meet redemption requests, resulting in a sharp decline in the Turkish stock market.
On Thursday, Turkish authorities took measures to enhance financial stability after a small number of funds faced difficulties meeting client redemption requests amid a selling wave in the Turkish stock market earlier in the week.
The Central Bank increased financing for repurchase operations to 300 billion liras and raised borrowing limits for banks in the interbank money market tenfold to ensure lira liquidity in the market.
At the same time, the Capital Markets Regulatory Authority suspended trading and ordered the liquidation of several investment funds managed by seven portfolio management companies, including Terra, Bousola, and Hedef, on the Tefas electronic platform for fund information.
A source directly familiar with the matter told Reuters that the funds slated for liquidation have a total portfolio value of 891 billion liras ($21.4 billion) and include approximately 353,000 investors.
In a separate measure aimed at supporting the markets, the Capital Markets Board lowered the minimum capital maintenance requirement for margin trading from 35 percent to 20 percent until October 2, allowing brokerage firms to apply the minimum in line with their risk policies.
Analysts said that following changes to fund regulations in August, the sharp decline in prices of low-liquidity stocks made it difficult for funds holding those stocks to access liquidity, forcing them to sell their core holdings to raise cash.
Turkey’s main stock index fell by more than five percent on Wednesday, renewing scrutiny of the country’s capital markets and raising concerns about the spread of liquidity pressures facing a group of funds across the broader financial system.
The markets recovered some of their losses following the measures taken on Thursday, with the main index rising 2.6 percent during the day, despite remaining down 6.9 percent since the start of the week, its weakest weekly performance since March 19, 2025.
The Turkish banking index, which opened 0.3 percent higher, accelerated its gains during the session, rising eight percent by 12:07 GMT.
Analysts said the direction of the markets in the coming phase remains unclear.
