On the Events Known to the Public as the “Fund Scandal”: An Assessment in Terms of Criminal Liability, Investor Rights and Supervisory Liability

Prof. Dr. Murat Volkan Dülger^*

(As at 1 October 2026)

ABSTRACT

In September 2026 the Capital Markets Board decided on the liquidation of 131 investment funds founded by seven portfolio management companies, and approximately 456 thousand investors were directly affected by this decision. In the same period the Istanbul Chief Public Prosecutor’s Office opened a wide-ranging investigation, and the share transactions of politically connected persons also entered the public agenda. Taking as its basis the developments that can be verified from official sources as at the morning of 1 October 2026, this study assesses the events from the perspectives of criminal law, investor rights and supervisory responsibility. The study first draws the boundary between investment loss and crime and then examines the offences of market manipulation, insider trading, aggravated fraud, aggravated breach of trust, criminal organisation and laundering. The personal nature of criminal liability, the character of the Board’s written application as a procedural precondition, and the difference between effective remorse under Art. 107(3) of the Capital Markets Law and the voluntary refund accounts are addressed separately. Finally, the legal remedies available to investors and the responsibility of the Board and of other institutions are discussed. The conclusion reached is that the success of the investigation must be measured not by the number of persons in pre-trial detention but by the uncovering of the pattern of transactions, the securing of the proceeds of crime and the application of the same standards to everyone.

Keywords: market manipulation, insider trading, liquidation of investment funds, effective remorse, Capital Markets Board, perception of impunity

The So-Called “Fund Scandal” in Türkiye: An Assessment of Criminal Liability,

Investor Rights and Supervisory Responsibility

ABSTRACT

In September 2026 the Capital Markets Board of Türkiye ordered the liquidation of 131 investment funds founded by seven portfolio management companies, directly affecting approximately 456,000 investors. The Istanbul Chief Public Prosecutor’s Office opened a broad criminal investigation, and the share transactions of politically connected persons also came under public scrutiny. Relying on developments verifiable from official sources as of the morning of 1 October 2026, this paper assesses the events from the perspectives of criminal law, investor rights and supervisory responsibility. It first distinguishes investment losses from criminal conduct and then examines transaction-based and information-based market manipulation, insider trading, aggravated fraud, aggravated breach of trust, criminal organisation and money laundering. It also addresses the personal nature of criminal liability, the Board’s written complaint as a procedural precondition, and the difference between effective repentance under Article 107(3) of the Capital Markets Law and the voluntary refund accounts recently opened. Finally, it discusses the remedies available to investors and the responsibility of the Board and other institutions. The paper concludes that the success of the investigation should be measured not by the number of detentions but by uncovering the trading scheme, securing criminal proceeds and applying the same standards to everyone.

Keywords: market manipulation, insider trading, liquidation of investment funds, effective repentance, Capital Markets Board, perception of impunity

INTRODUCTION

The events referred to in public as the “fund scandal” are not merely a market crisis. The same events set in motion, together, criminal procedure, capital markets law, the law of damages and the liability of the administration. To read the events under a single heading — for instance solely as “fraud” or solely as a “failure of supervision” — therefore makes it harder both to identify those responsible and to make good the investors’ loss.

The aim of this study is to place the information circulating in public into legal categories. The view defended here is built in two steps. First, the funds’ falling into payment difficulties, the valuation of fund assets at artificial prices and the misleading of investors are facts that are interconnected but legally distinct; each must be assessed by reference to its own offence type and its own conditions of proof. Secondly, the legitimacy of the investigation depends less on who has been placed in pre-trial detention than on whether the same standards are applied to persons against whom the evidence is of the same level.

At first sight this view may be read as a call for caution that serves to protect those responsible. Yet the duty of criminal law to draw distinctions does not protect those responsible; on the contrary, it ensures that convictions rest on an unassailable evidentiary footing. Aggregated charges, by contrast, lead to protracted proceedings, to acquittals and, ultimately, to a deepening of the perception of impunity.

The text is based on the developments that could be verified as at the morning of 1 October 2026. The bulletins and announcements of the Capital Markets Board, the statements of the Chief Public Prosecutor’s Office and the press reports relaying them were compared; the legislative provisions were checked against the current texts in the Legislation Information System (Mevzuat Bilgi Sistemi). Matters that could not be officially verified are expressly identified as such in the text. Since the criminal investigation is being conducted in secrecy, no definitive conclusions have been drawn without knowledge of the contents of the file; the assessments have been kept at the level of possible legal characterisations.

The study proceeds as follows. First the course of events and the publicly available data are summarised; then the legal nature of the events and the offences that may come into consideration are examined. The subsequent sections deal with the personal nature of criminal liability, the evidentiary axis of the investigation and the procedural precondition, effective remorse and voluntary refund, investor rights, the responsibility of the chain of supervision, and the standards applied to politically connected persons.

I. THE COURSE OF EVENTS AND THE PUBLICLY AVAILABLE DATA

A. The Liquidation Decisions and the Investors Affected

By its decisions of 17 September 2026 the Capital Markets Board (SPK) decided on the liquidation of 131 investment funds founded by the portfolio management companies A1 Capital, Atlas, Bulls, Hedef, Pardus, Pusula and Tera. The Board announced that, according to the records of the Central Securities Depository (MKK), the number of unique investors in these funds was 455,758. For the liquidation proceedings, Türkiye İş Bankası was appointed for the Tera funds and T.C. Ziraat Bankası for the funds of the other six companies. On 21 September the Board extended the liquidation period, initially set at three months, to six months, and also stated that this period did not mean that the liquidation would necessarily take six months.

While these figures show the scale of the events, they must be disaggregated for the purposes of legal assessment. The total size of the funds placed in liquidation, the investors’ definitive loss and the benefit obtained through crime are different magnitudes. The fund size may have been calculated on the basis of artificially inflated prices. The definitive loss emerges only once the liquidation has been completed. The benefit obtained from the offence, for its part, can be calculated only once the link between the act and the gain has been established. Confusing these three magnitudes distorts both the determination of the penalty and the calculation of damages.

B. The Course of the Criminal Investigation

Simultaneously with the liquidation decision, the Istanbul Chief Public Prosecutor’s Office opened an investigation into certain holding and portfolio companies. According to the statement of the Minister of Justice of 1 October 2026, procedural measures were taken against 217 suspects in the investigation, 56 persons were placed in pre-trial detention and the measure of judicial control was applied to 88 persons. The Minister also announced that manipulative transactions had been detected in 41 shares on Borsa İstanbul. On the same day it was reported that the chairman of the board of directors and the general manager of Tera Portföy had also been placed in pre-trial detention. The statement of the former SPK Chairman İbrahim Ömer Gönül was taken on 30 September in his capacity as a suspect.

The Board, too, filed criminal complaints within its own sphere. In the bulletin of 25 September a criminal complaint under Art. 107(1) of the Capital Markets Law (SerPK) was filed against eleven persons on account of transactions in the shares of Özata Denizcilik, and a two-year trading ban was imposed on certain persons and entities. The bulletin of 28 September, in turn, contained a decision to file a criminal complaint under the same provision against thirty-six persons on account of transactions in the shares of Tera Finansal Yatırımlar Holding.

C. Institutional Measures

By decision of the Banking Regulation and Supervision Agency of 30 September, the management of Tera Yatırım Bankası, Destek Yatırım Bankası, Hedef Yatırım Bankası, Destek Finans Faktoring and Tera Finans Faktoring was transferred to the Savings Deposit Insurance Fund (TMSF). On the same day the SPK temporarily suspended the capital market activities of Tera Yatırım Menkul Değerler A.Ş. and decided that interim payments would be made to the investors of the funds in liquidation. On 1 October, in turn, it was announced that accounts had been opened in the name of the TMSF for the voluntary refunds of those who had obtained exorbitant gains from the sale of fund units prior to the liquidation. The legal nature of these measures is examined separately below.

II. THE LEGAL NATURE OF THE EVENTS

A. The Boundary between Investment Loss and Crime

Investment in the capital market involves the possibility of loss as much as the possibility of gain. The fact that a risk taken under real market conditions and in conformity with the disclosed investment strategy results in a loss does not constitute an offence. Likewise, a fund’s falling into payment difficulties is not, by itself, fraud.

However, deceit, manipulation, concealed conflicts of interest or the misuse of fund assets do not fall within the scope of the risk assumed by the investor. For this reason the defence that “the investor had accepted the risk” does not remove liability in respect of unlawful transactions. There are three separate areas to be examined in these events. These are the investment and liquidity management of the funds, the manipulative transactions alleged to have been carried out in the capital market, and the compensation of the investors’ losses. The fact that these areas are connected does not mean that they are subject to the same legal rules.

The expert examination, too, must be designed in accordance with this distinction. Calculating the total loss is not enough. The loss arising from ordinary market movements must be separated from the loss caused by unlawful conduct, because both criminal liability and liability in damages arise only in respect of the latter part.

B. The Limits of the “Ponzi Scheme” Analogy

The allegation that has featured prominently in the news is that certain funds concentrated on shares with a low free float ratio and thereby drove up the price of those shares and, through it, the unit values of the funds. When investor redemptions increased, the fact that these assets could not be sold at an adequate price and speed deepened the payment difficulties. The SPK’s own statement also confirms that, in the last quarter of 2025, price movements that could not be explained by economic reality were observed in shares with a low free float ratio held in the funds of certain portfolio management companies.

To call such a structure outright a “Ponzi scheme” (saadet zinciri), more is needed. It must be shown that the money of new investors was used to make payments to earlier investors as though there were a genuine investment return. Artificial pricing, circular transactions between funds and the meeting of old redemptions with new inflows may all have occurred together. Each of these, however, must be proved separately by transaction records. The expression “Ponzi-like” may be used as an economic analogy. In criminal law, by contrast, we are obliged to determine which person carried out which deceit, transaction or transfer.

III. THE OFFENCES THAT MAY COME INTO CONSIDERATION

A. Market Manipulation

1. Transaction-Based Market Manipulation

At the centre of the investigation lies Article 107 of Capital Markets Law No. 6362 (SerPK). The first paragraph of the article punishes those who make purchases or sales, give orders, cancel orders, change orders or carry out account movements with the aim of creating a false or misleading impression as to the prices of capital market instruments, their price changes, or their supply and demand. Apparently independent accounts acting in concert, pre-arranged matched transactions and the creation of a particular closing price are typical manifestations of this offence.

The fact that the transactions were carried out on the exchange and in formal compliance with the rules does not rule out the possibility of manipulation. What is decisive is the coordination between the transactions and the purpose of the transactions. Nor is it required, for the offence to be made out, that an investor should have suffered a loss. For the protected legal interest here is, before the assets of individual investors, the reliable formation of prices in the market.

2. Information-Based Market Manipulation

Art. 107(2) SerPK, for its part, punishes the giving of false, incorrect or misleading information, the spreading of rumours, the production of news, comments or reports, or the dissemination of these, with the aim of influencing prices, values or investors’ decisions. By the amendment made in 2015, the perpetrator’s “obtaining a benefit thereby” was made an element of the offence. For this reason, when share recommendations made via social media, the steering of opinion leaders and “signal groups” are examined, it must be proved not only that the content was misleading but also that the perpetrator obtained a benefit from it. The conditions of proof of the two offences are not the same, and the indictment must state clearly which paragraph is being applied.

B. Insider Trading

Sales carried out before the crisis and yielding extraordinary gains bring into consideration the offence of insider trading under Art. 106 SerPK. This offence punishes trading on the basis of information that is capable of influencing prices or investors’ decisions and has not yet been disclosed to the public (inside information), and the obtaining of a benefit thereby. The perpetrator need not be a company executive only. Persons who have access to the information by reason of their office or profession, or who know or ought to know that the information is of an inside nature, may also be perpetrators.

Selling just before the crisis is not, by itself, proof of this offence. The source of the information, when it reached the person and its effect on the decision to trade must be established. Extraordinary gain and well-timed trading are a serious reason for examination. For a conviction, however, a flow of information must be shown that is supported by bank and brokerage firm records, transaction links and other lawfully obtained evidence. The approach “he made a lot of money, so he is guilty” is as wrong as the approach “he made it on the stock exchange, so it must be lawful”.

C. Aggravated Fraud

If it is proved that investors were misled by fraudulent conduct into depositing money and that, as a result, a benefit was obtained to their detriment, aggravated fraud comes into consideration. Fraud committed, in the course of their commercial activities, by persons who are merchants or company executives or who act on behalf of a company falls under Art. 158(1)(h) of the Turkish Criminal Code (TCK). The use of information systems, banks or credit institutions as an instrument is assessed separately under Art. 158(1)(f) TCK.

What is decisive here is not that the investment subsequently turned out badly but that the investor was steered by deceit when making the decision. The giving of untrue assurances, the concealment of the fund’s real portfolio structure or the presentation of an artificial return as genuine investment success are of importance in this respect. Nor can the penalties for market manipulation and aggravated fraud be cumulated automatically. Whether there is one and the same act or several distinct acts, and the concurrence of offences, must be assessed separately. In our view, the artificial formation of the price and the marketing of that price to the investor are in most cases separate acts. The possibility of real concurrence should therefore not be disregarded in the specific case.

D. Aggravated Breach of Trust and Embezzlement

With regard to the allegations that fund assets were transferred to related companies or persons, Art. 110 SerPK is of importance. The provision lays down that the acts it lists constitute the aggravated form of the offence of breach of trust and that, in that case, the penalty to be imposed under Art. 155(2) TCK may not be less than three years. Sub-paragraph (c) of the article brings within this scope the reduction of the profits or assets of collective investment undertakings, or the prevention of their increase, by carrying out with persons to whom they are related in terms of management, supervision or capital transactions involving prices, fees, consideration or terms contrary to the arm’s length principle, market custom and the principle of prudence, or by generating trading volume. Sub-paragraph (a) of the same paragraph, in turn, governs the use, for one’s own benefit or that of another, of the capital market instruments, cash and other assets entrusted to the investment firm. The fact that the expression “generating trading volume” is expressly listed is of particular importance with regard to the allegation that circular transactions were carried out between funds.

For instance, the fund’s purchase of an asset from a related person at an unrealistically high price, or the financing of the gains of particular persons with fund resources, should be investigated from this angle. The mere existence of a money transfer is not enough. The legal ground of the transfer, the asset received in return and the economic reality of the transaction must be established. The characterisation as “embezzlement” that is frequently used in public, for its part, can be used only once the legal position of the perpetrator and the type of the institution concerned have been determined. For embezzlement is regulated in Art. 247 TCK as an offence specific to public officials. The manager of a legal person governed by private law cannot, as a rule, be the perpetrator of this offence. Special laws, however, provide for important exceptions to this rule.

The first of these is in the field of banking. Article 160 of Banking Law No. 5411 punishes with imprisonment from six to twelve years and a judicial fine of up to five thousand days the chairman and members of the board of directors of a bank and its other staff who appropriate, for themselves or for another, money, documents, instruments or other property the possession of which has been transferred to them by reason of their duties or which they are under a duty to protect and supervise. Where the offence is committed by fraudulent conduct intended to ensure that the embezzlement is not discovered, the term of imprisonment may not be less than twelve years. Under the Law, the term “bank” covers, in addition to deposit and participation banks, development and investment banks as well. Accordingly, a member of a bank’s staff may be the perpetrator of the offence of embezzlement even though he or she is not a public official.

The significance of the provision for these events is obvious. Among the institutions whose management has been transferred to the TMSF are three investment banks. In respect of the managers and staff of these banks, whether bank resources were used to finance fund transactions or for the benefit of related persons must also be examined within the framework of Art. 160(1) of the Banking Law. The third paragraph of the article, for its part, also treats as embezzlement the conduct of natural-person shareholders who hold, de jure or de facto, the management and control of a bank transferred to the Fund and who cause the bank to suffer a loss by having its resources used for their own benefit or that of others in a manner that endangers the safe operation of the bank, and provides for imprisonment from ten to twenty years. This paragraph, however, speaks of “the resources of the credit institution”. And the Law defines credit institutions as deposit and participation banks only. Whether the paragraph can be applied to the shareholders of investment banks is therefore open to debate. In our view, the prohibition of analogy in criminal law precludes extending this expression to cover investment banks. As regards the offences under the Banking Law, investigation is, as a rule, dependent on a written application by the Banking Regulation and Supervision Agency (BDDK) or the TMSF (Art. 162). This application, too, is a procedural precondition. In respect of the offence under Art. 160(3), however, the public prosecutor’s office may act of its own motion in cases where delay would be prejudicial.

The second exception lies in the field of capital markets. Article 110/A, added to the Capital Markets Law (SerPK) in 2024, provides for a separate offence of embezzlement for the chairpersons and members of the boards of directors and the staff of crypto-asset service providers. This provision concerns crypto-asset service providers only. The Capital Markets Law contains no general offence of embezzlement for portfolio management companies, brokerage firms or collective investment undertakings. Where the managers of these institutions use fund assets for their own benefit or for the benefit of others, this is assessed as aggravated breach of trust under SerPK Art. 110(1)(a) and (c), examined above. Consequently, in one and the same case a manager of a portfolio management company may be held liable for breach of trust, while a manager of an investment bank in the same group may be held liable for embezzlement. This distinction makes it imperative that the indictment show clearly in which institution and in what capacity the perpetrator acted.

E. Criminal Organisation

The fact that several persons carry out transactions together, or even commit offences together, does not in itself show that a criminal organisation has been established. For the purposes of Art. 220 of the Turkish Criminal Code (TCK), in addition to the existence of at least three persons, what is required is an organisational bond of a continuing nature formed for the purpose of committing offences, a hierarchy and a structure, and suitability for committing the intended offences in terms of the number of members and the tools and equipment at the organisation’s disposal.

The organisation chart of a company and the hierarchy of a criminal organisation are not the same thing. The general manager of a portfolio management company cannot be regarded as the leader of an organisation merely on account of that title. By contrast, if a structure is identified that was set up to carry out artificial transactions on a continuing basis through different companies and accounts, the organisation offences come into play. In that case, separate penalties are imposed for the organisation offence and for the offences committed within the framework of the organisation’s activities. In addition, under TCK Art. 220(5), the leaders of the organisation are also held liable as perpetrators for all offences committed within the framework of the organisation’s activities.

F. Laundering of the Proceeds of Crime

Not every transfer abroad is laundering. TCK Art. 282(1) punishes the act of taking abroad assets derived from an offence punishable by imprisonment with a minimum term of six months or more, or of subjecting such assets to various transactions for the purpose of concealing their illicit source or of creating the impression that they were obtained by lawful means. It must therefore first be shown that the assets derive from a predicate offence. Thereafter, the money trail, the beneficial owners, the links between the companies and the economic rationale of the transactions must be examined.

The use of crypto-assets, the existence of a foreign bank account or the making of a high-value transfer is not in itself proof of the offence. These are indicators that call for inquiry. According to press reports, the movements of money and crypto-assets of the managers and their relatives since 2024 are being examined in the investigation. This examination will form the real basis of the laundering allegation.

G. Sanctions and Concurrence of Offences

The basic sanctions for the offences at issue are summarised in the table below. The table does not mean that one person is liable for all of the offences or that all of the penalties will be added together. The sanctions are applied having regard to the law in force at the time of the offence and to any more favourable provisions that entered into force subsequently.

No direct multiplication can be made between the number of victims and the penalty. It must be determined whether there were separate fraudulent acts directed at each investor, whether a single act affected more than one person, and whether the conditions of the continuing offence are met. In aggravated fraud, commission of the offence jointly by three or more persons requires the penalty to be increased by one half, and commission within the framework of the activities of an organisation requires it to be doubled (TCK Art. 158(3)). However, it would not be right to announce a definite total penalty without assessing, on the basis of the file, the number of offences, the grounds for increasing the penalty, the form of participation and the rules on concurrence. The calculations of “hundreds of years” voiced in public are therefore not a legal forecast. The difference between the penalty imposed and the time actually to be served should also be borne in mind.

IV. THE PERSONAL NATURE OF CRIMINAL LIABILITY

A. Persons Whose Liability Is to Be Investigated

The investigation should not be confined to the most visible managers of the companies. A wide circle of investigation, however, does not mean a wide circle of liability. The groups of persons to be examined and the basic question in respect of each group are shown below.

Criminal liability is personal (Constitution Art. 38(7); TCK Art. 20(1)). Being a shareholder, manager or employee does not in itself constitute guilt. For each person, the specific act, knowledge, will and contribution to the offence must be established separately.

B. Members of the Board of Directors and the “I Did Not Know” Defence

A title neither makes a person liable of itself nor relieves that person of liability. Being an independent member of the board of directors does not make it unnecessary to examine participation in decisions, signatures, instructions, correspondence, reports and the actual allocation of duties. If it is proved that a member of the board of directors was aware of the unlawful transactions and directed them or knowingly facilitated them, criminal liability arises.

By contrast, inadequate supervision does not in every case amount to participation in an intentional offence. None of the offences at issue is an offence that can be committed by negligence. For this reason, a breach of the duty of care remains, as a rule, within the sphere of compensation and administrative liability. The truth of the “I did not know” defence must likewise be tested against concrete evidence, not against the assumption that the person “ought to have known”.

C. Spouses and Relatives of Managers

Kinship does not give rise to criminal liability. The use of an account, the transfer of assets or the transfer of money through a spouse or relative is a fact that needs to be investigated. For guilt, however, the person’s knowledge and contribution must be shown separately. Taking part in the commission of the offence and knowingly accepting or using the proceeds of crime are different situations. TCK Art. 282(2) punishes with imprisonment from two to five years a person who, without participating in the laundering offence, purchases, accepts, possesses or uses the asset forming the subject matter of the offence while knowing its nature. For this provision to apply, too, the predicate offence and the person’s knowledge in this respect must be proved separately. Nor may the relatives’ own legitimate assets be treated as proceeds of crime on the ground of kinship alone. It may be necessary to keep the investigation wide; collectivising liability, however, is contrary to the fundamental principles of criminal law.

V. THE EVIDENTIARY AXIS OF THE INVESTIGATION AND THE PROCEDURAL PREREQUISITE

A. The Trail of the Money and of the Decision

In files of this kind, the trail of the decision must be followed just as much as the trail of the money. The records of the MKK and Takasbank, the timing of orders down to the second, the matches between accounts, fund valuation records, related-party transactions, investment committee decisions and lawfully obtained communication records must be examined together. Transactions carried out between the same persons, the timing of exits from the funds and the links between those who exited early and the fund managers are particularly important. The Ministry’s statement that artificial-intelligence-assisted analysis systems are being used to screen millions of transactions is also noteworthy in this respect. Algorithmic screening, however, generates suspicion, not evidence. Every transaction flagged by the system must be verified by a reproducible expert examination that has been subject to human oversight.

Nor is it sufficient to show the existence of an extraordinary gain. It must be explained through which conduct and by virtue of which information that gain was obtained. Otherwise the investigation would rest on an inference that reasons from result to cause and has no place in criminal proceedings.

B. The Board’s Written Application

The opening of an investigation into the offences defined or referred to in the Capital Markets Law is conditional on a written application by the Board (SerPK Art. 115). The Law states expressly that this application is in the nature of a procedural prerequisite. For this reason, with regard to the offences in SerPK Arts. 106, 107 and 110, the prosecutor’s office must ascertain, in respect of each suspect, whether an application by the Board exists. If a public prosecution is brought upon the application, the Board acquires the status of intervening party; it is also entitled to lodge an objection against a decision not to prosecute.

This point is of importance in the present file. Among the eleven persons named in the Board’s criminal complaint of 25 September concerning Özata Denizcilik, the politically connected persons whose transactions in the same shares are being debated in public do not appear. This does not mean that no offence was committed as far as those persons are concerned. However, an investigation of those persons for capital markets offences is conditional on an application by the Board which, according to publicly available information, has not yet been separately documented. On the other hand, the application requirement is not specific to political identity, and it does not place independent offences under the TCK, such as fraud or laundering, outside the investigation.

VI. EFFECTIVE REMORSE, VOLUNTARY RESTITUTION AND THE TMSF POOL

A. The Special Effective Remorse Provision in SerPK Art. 107(3)

For trade-based market manipulation, SerPK Art. 107(3) lays down a special effective remorse provision. Under it, where twice the benefit obtained or caused to be obtained, and in any event not less than five hundred thousand lira, is paid to the Treasury, no penalty is imposed if the payment was made before the investigation began. If the payment is made at the investigation stage, the penalty is reduced by one half; if it is made at the prosecution stage before judgment, it is reduced by one third. In its bulletin of 28 September, the Board announced that the persons against whom it had filed a criminal complaint could make this payment into the Treasury account within fifteen days, and it published the collection account of the Ministry of Treasury and Finance for the payment.

The provision has three limits. First, it concerns trade-based market manipulation only. It does not apply automatically to information-based market manipulation or to insider trading. Second, the payment is made to the Treasury and does not directly make good the investors’ losses. As Ramazan Başak, former Vice-President of the Financial Crimes Investigation Board (MASAK), has also pointed out, in an event in which hundreds of thousands of people have suffered loss, the fact that the payment goes to the public treasury shows that the provision is not victim-oriented. Third, the payment produces effects only in respect of this offence. If the same act also constitutes the offences of fraud, breach of trust or laundering, the effective remorse conditions specific to those offences must be met separately.

B. Effective Remorse in Respect of the Other Offences

In fraud, TCK Art. 168 requires that the victim’s loss be made good in full by restitution in kind or by compensation. Where effective remorse is shown before the prosecution begins, the penalty is reduced by up to two thirds; where it is shown after the prosecution has begun but before judgment, it is reduced by up to one half. As can be seen, the payment here is made to the victim and not to the Treasury, and the reduction does not result in impunity. In laundering, TCK Art. 282(6) provides that no penalty shall be imposed on a person who, before the prosecution begins, secures or facilitates the seizure of the assets forming the subject matter of the offence. SerPK Art. 110(3) likewise contains a separate arrangement for breach of trust under sub-paragraphs (b) and (c) of the first paragraph. Here the perpetrator is required, in addition to the restitution payment under SerPK Art. 21(4) concerning the disguised transfer of profit, to pay twice that amount to the Treasury. A single payment does not secure general impunity in respect of all offences.

C. The Voluntary Restitution Accounts Are Not Effective Remorse

The SPK’s announcement of 1 October states that accounts have been opened on a fund-by-fund basis in the name of the TMSF at Birleşik Fon Bankası for voluntary restitution by those who made exorbitant gains from sales of fund units before the liquidation. The amounts paid into these accounts will be transferred to the liquidation assets of the fund concerned and used for payments to investors. A general restitution account has also been opened separately for gains made from share transactions. The Minister of Justice has likewise stated that the seized assets will be transferred to a pool to be created at the TMSF and will be used first for the claims of investors with a balance of one million lira or less.

This victim-oriented arrangement responds in part to the criticism mentioned above. From the standpoint of criminal law, however, one distinction must be underlined. Paying money into the voluntary restitution account does not amount to fulfilling the effective remorse condition in SerPK Art. 107(3). The Law requires the payment to be made to the Treasury and in an amount equal to twice the benefit. In statements reported in the press it has been said that the suspects’ paying twice the benefit into the TMSF account will affect their legal position. In our view, unless the law is amended, a payment made into the TMSF account does not produce the consequences of SerPK Art. 107(3). At most, such a payment may be taken into account, within the framework of TCK Art. 62, as the perpetrator’s conduct after the act for the purposes of discretionary mitigation or, if the conditions of TCK Art. 168 are met, in respect of fraud. Clarifying this distinction now is essential both for the legal certainty of the suspects and for the soundness of the judgments to be delivered in future.

D. Reports of Restitution

The reports discussed in public, according to which approximately 2.2 billion lira has been returned, have not been officially confirmed. Alongside reports that the restitution has been made, there are also reports conveying that this information is not correct. Without official confirmation, it cannot be said that “restitution was made and the benefit of effective remorse was obtained”.

Even if restitution has been made, the following questions must be answered. Which person paid how much, and into which account? How was the benefit obtained from the offence calculated? On what date did the investigation into the relevant offence begin, and does the payment meet the amount required by the law? The fact that a person has not yet been taken into police custody, or that his or her name did not appear in the first announcements, does not mean that the investigation has not legally begun. On the other hand, voluntary restitution is not in itself a conclusive confession of the offence either. The criminal-law characterisation is in every case made on the basis of the evidence.

VII. INVESTOR RIGHTS

A. Liquidation and Interim Payment

It is possible to get the money back; but there are not yet sufficient data to say that every investor will receive the whole of his or her money. The real value of the assets held by the fund, their saleability, the fund’s debts and the amounts that can be recovered from unlawful transfers will be decisive. The fact that the fund’s assets are separate from the assets of the portfolio management company and of the custodian is an important safeguard. This separation, however, is not a capital guarantee that prevents the assets held by the fund from losing value.

Decision No. 64/1775, published in the SPK’s Bulletin No. 2026/67 of 30 September 2026, concerns the funds under liquidation of the Tera, Pusula, Atlas and Hedef portfolio management companies. For investors whose reconciliation has been completed, the net investment amount to be calculated by the MKK will be taken as the basis. If the net investment amount is below one million lira, an interim payment equal to that amount will be made; if it is one million lira or more, the interim payment will be at most one million lira. Implementation will begin with the money market funds, the interim payment will be set off against the final liquidation claim, and no fund units will be redeemed at this stage. Decision No. 64/1770 in the same bulletin, for its part, laid down a liquidation sequence for the A1 Capital, Bulls and Pardus funds, starting with the funds whose title contains the words “money market” and proceeding from the fund with the highest number of investors to the one with the lowest.

This decision does not mean that “all losses of all investors will be covered by the State”. Nor can it be assumed that the last unit value of the fund shown on screen is the same as the net investment amount to be calculated by the MKK. The net investment amount is based not on artificially inflated prices but on the amounts the investor actually paid in and withdrew. In our view, this criterion is apt to ensure equality among investors during the liquidation period.

The date of the sell instruction and whether it was executed also matter. According to the SPK’s statement of 28 September, the holders of instructions cancelled on 17 September will receive payment from the liquidation balance in proportion to their fund units. Instructions which had been submitted earlier but were not executed owing to default or because no price was announced are also covered by the liquidation. Every investor should have the record of his or her own order and the status of the transaction confirmed by the distributing institution.

B. Avenues of Compensation

The share to be received from the liquidation and compensation for the loss arising from unlawful conduct are two separate avenues. Receiving a liquidation payment does not of itself extinguish the claim for compensation in respect of the remaining loss. Depending on the particular circumstances of the case, liability may arise on the part of the portfolio management company, managers at fault, persons who took part in the unlawful transactions, the portfolio custodian or other service providers.

Where public disclosure documents contain false, misleading or incomplete information, the liability regime in SerPK Art. 32 applies. Those who sign these documents are jointly and severally liable. Independent audit, rating and valuation firms that prepare the underlying reports are also liable within the framework of the Law. Where a disguised transfer of profit is established by the Board, SerPK Art. 21(4) provides that the return of the transferred amount to the fund, together with statutory interest, is to be demanded. Because it directly strengthens the fund’s assets, this avenue is of particular importance for investors in the liquidation process. Nor does the custody service consist merely in keeping assets in an account. Under SerPK Art. 56, the portfolio custody service also includes ensuring that the issue and redemption of fund units, the calculation of the unit value in accordance with the valuation principles, the portfolio structure and the transactions comply with the legislation. The custodian is liable for the losses it causes to unit holders by failing to fulfil its obligations, and the unit holders’ right to bring an action is reserved. The Law further provides that the custodian and the portfolio management company may not be the same legal entity and that both shall act solely in the interests of the unit holders.

However, rather than naming every institution as a defendant merely because it figured in the process, the link between the breach of obligation and the loss must be established. The competent court and, where applicable, mediation as a precondition for bringing an action must also be determined separately according to the nature of the relationship. Nor should the loss be calculated solely on the basis of the last announced fund price, which may have been artificially inflated. The calculation of compensation requires a comparison with the position in which the investor would have been had the unlawful act not occurred.

C. The “State Guarantee” Misconception

An investment fund is not a deposit, even if it was purchased from a bank. The fact that the bank is the distribution channel does not mean that it guarantees the fund’s principal. Nor does the Investor Compensation Centre cover all investment losses. Under SerPK Art. 84, the scope of compensation consists of claims arising from an investment firm’s failure to fulfil its obligation to deliver the cash or capital market instruments that it holds in custody or manages on behalf of the investor. Losses arising from investment advice or from price movements in the market are expressly excluded. Nor are the claims of those convicted of the offences in SerPK Arts. 106 and 107 or of laundering compensated in so far as they relate to those acts. Accordingly, with regard to client assets at a brokerage firm whose activities have been suspended, the Centre’s protection can come into play only where a compensation decision is taken by the Board, and only within this narrow scope. Loss arising from the fall in fund unit prices lies outside this protection. The assignment of the TMSF to certain operations in this case likewise does not mean that fund losses fall within the scope of deposit insurance. A special payment arrangement must be distinguished from the existing insurance and compensation systems.

D. Seizure, Confiscation and Restitution

Seizure, confiscation and restitution to the victim are different legal measures. Seizure is a coercive measure that preserves assets during the investigation. This measure does not show that the assets belong to a particular investor or that they will be distributed immediately. Confiscation, for its part, is a security measure subject to separate conditions. Under TCK Art. 55(1), assets which were obtained through the commission of the offence and can be returned to the victim may not be confiscated. This rule must not be overlooked in the debate on the TMSF pool. For the confiscation in favour of the State of assets that can be returned to the victim would injure the investor’s right a second time.

Measures against assets must also have a statutory basis, a link with the offence and be proportionate. For the seizure of immovable property, rights and claims, Art. 128(1) of the Code of Criminal Procedure (CMK) requires strong suspicion, based on concrete evidence, that the offence has been committed and that the assets were obtained from that offence. For this measure, a report on the value obtained from the offence must also be obtained from institutions such as the SPK, the Banking Regulation and Supervision Agency (BDDK) or MASAK, as relevant. More importantly, while the offences of fraud and breach of trust are included in the catalogue in CMK Art. 128(2), the offences in SerPK Arts. 106 and 107 and the laundering offence are not. Consequently, in an investigation based solely on suspicion of market manipulation, a seizure order cannot be issued under this provision. The Chief Public Prosecutor’s Office’s statement that on 29 September it sent a letter to the relevant institutions for the freezing of all assets of certain persons does not show on which provision this measure is based or what its scope is. This uncertainty may prove decisive in the objections to be lodged against the measures in future. In addition, remedies such as provisional attachment or an action to set aside dispositions may also be needed for the collection of private-law claims.

Bringing back money that has been taken abroad is legally possible; in practice, however, it requires time, evidence and international cooperation. First the account in which the money is held, the beneficial owner and the chain of transfers must be identified; then information, measures against assets and, if the conditions are met, restitution must be requested from the country concerned by way of mutual legal assistance. A conviction handed down years later will not suffice to cover the investor’s loss if no recoverable assets remain at that date. For this reason, the early identification and preservation of assets is decisive.

E. Time-Limits and the Steps the Investor Should Take

There is no single time-limit for all claims. Tort, contract, liability specific to capital markets and the liability of the administration are subject to different rules. For example, under Art. 72 of the Turkish Code of Obligations (TBK), a claim for compensation arising from tort becomes time-barred two years from the date on which the loss and the person liable for compensation became known and, in any event, ten years from the date on which the act was committed. If the compensation arises from an act punishable by a penalty for which the criminal laws lay down a longer limitation period, that period applies. It cannot be said, however, that this rule will apply as it stands to every claim. In particular, for compensation claims arising from public disclosure documents , SerPK Art. 32(6) lays down a short limitation period of six months from the date on which the loss occurred. On the present timeline of events, this period poses a serious risk for investors. For losses arising from administrative acts, on the other hand, Art. 13 of the Law on Administrative Judicial Procedure (İYUK) requires an application to the administration within one year from the date on which the act became known and, in any event, within five years from the date of the act. Investors should not act on the assumption that “the investigation is ongoing, so time does not run”. Applying to the prosecutor’s office does not in every case preserve the compensation claim and the time-limits. Nor does joining the criminal proceedings as an intervening party of itself secure an order for payment.

The investor’s first step is to document entitlement and loss. The fund code, the number of fund units, buy and sell instructions, account statements, receipts, contracts, risk disclosure forms and the notices sent to the investor should be kept. Next, account and instruction records should be requested from the distributing bank or brokerage firm, and the entitlement and reconciliation details should be checked with the bank conducting the liquidation. An application to the SPK with the specific transactions and documents, the reporting of any suspicion of fraud or manipulation to the prosecutor’s office, and compensation claims against those responsible together with interim legal protection should be considered together. Broadly worded release or settlement documents that have the effect of waiving all rights in return for a partial payment should be examined carefully. Nor should any credence be given to persons who ask for payment saying “we will rescue your money immediately”, or to unofficial accounts.

VIII. THE RESPONSIBILITY OF THE SUPERVISORY CHAIN

A. The Capital Markets Board

The SPK has regulatory, surveillance and supervisory duties aimed at protecting the investor. The occurrence of a loss, however, does not in itself show that the Board is legally liable. A specific breach of duty and the effect of that breach on the loss must be investigated.

In this file the Board’s own statement offers an important starting point. The SPK has stated that price movements which could not be explained by economic reality were observed in the last quarter of 2025, that the matter was discussed in the Financial Stability Committee on 2 December 2025, and that a working group was set up the following day. On 18 December 2025 the Board raised the financial asset threshold in the definition of qualified investor from one million lira to ten million lira, amended the TEFAS implementation principles, and on 28 August 2026 published the guide on investment funds.

In our view, this statement makes it imperative to examine supervisory responsibility. For it has been officially acknowledged that the risk was known at institutional level approximately nine months earlier. In that case, the questions to be asked are clear. Which risk was learned of, and when? Against which institutions was an inquiry opened? What measures protecting the investor were taken in the transitional period? What loss could an earlier intervention have prevented? These questions must be answered with documents. The fact that regulatory preparations were made does not answer the questions concerning the surveillance of specific irregularities. According to reports, the former Chairman of the Board has said that the necessary examinations were carried out during that term of office and that penalties were imposed on some funds, and that the detection of manipulation took three to four months. This defence leaves unanswered the question why the detection period was not backed by interim measures halting or restricting investor inflows.

The independence of regulatory authorities and the inadequacy of the means of warning the public are also part of this debate. Turgut Tan rightly emphasises that, where breaches are openly continued through advertisements, the delay cannot be explained by a legal gap, and that the timing of the intervention directly increases the loss suffered by citizens.

B. The Criminal Liability of the Board’s Officials

Where acting contrary to the requirements of one’s office, or neglect or delay in performing one’s duty, has caused individuals to suffer harm or caused loss to the public, or has secured an unjust gain for individuals, the offence of abuse of office comes into play. TCK Art. 257 provides for imprisonment from six months to two years in its form committed by act and from three months to one year in its form committed by omission. Not every supervisory shortcoming, however, constitutes this offence. If there are allegations of failure to report an offence learned of in connection with one’s duties, of participation in the offence, or of acting in return for a benefit, these must be investigated separately in respect of the relevant offences. There is also a procedure specific to the SPK here. Under SerPK Art. 133, investigations into offences alleged to have been committed by the Chairman, members and staff of the Board in connection with their duties are conducted in accordance with the general provisions upon the permission of the relevant Minister for the Chairman and members, and of the Chairman for the staff. For permission to be granted, there must be clear and sufficient indications that these persons acted with the intent of securing a benefit for themselves or of causing damage to the Board, and that they obtained a benefit. An objection may be lodged with the Council of State against permission decisions within fifteen days, and no investigation may be opened before the time-limit for objection has expired or the objection has been determined. This threshold makes permission to investigate harder to obtain for allegations based on mere neglect of supervision. The fact that the former Chairman of the Board has been questioned as a suspect raises the question of how this procedure was operated. Publicly available information does not show on what date and for which allegations the permission was granted.

C. The Administration’s Liability in Damages

If a causal link can be established between the breach of a specific duty to supervise or intervene and the loss, the administration’s liability based on service fault may be considered. For this, it is not enough to say “the SPK granted authorisation, so let it pay for the entire loss”. It must be shown when the administration should have acted, which power it failed to use and to what extent this increased the loss. For losses arising from administrative acts, the prior application procedure and the time-limits in İYUK Art. 13 must be observed. It should also be remembered that, in actions for damages brought on account of the decisions, acts and actions of the Board’s officials relating to their duties, the claim must be directed against the Board and not against the individuals (SerPK Art. 133(4)). The absence of criminal liability does not of itself remove the administration’s liability in damages, because the conditions of the two differ.

D. Custodians, Independent Auditors and Other Institutions

With regard to independent auditors, it must be investigated which report was prepared on the basis of which data and how clear risk indicators were dealt with. The BDDK’s banking supervision and MASAK’s duties of financial intelligence and combating laundering differ from the task of the SPK. Borsa İstanbul, Takasbank and the MKK must also be assessed in terms of their own specific duties. The fact that an institution is part of the transaction chain does not mean that it is the guarantor of the entire system. But whether it fulfilled its own obligation must without fail be questioned.

IX. POLITICALLY CONNECTED PERSONS AND THE PERCEPTION OF IMPUNITY

A. The Allegations Reported in Public and the Legal Position

The allegation reported in public concerning Fatma Betül Sayan Kaya, former Minister of Family and Social Policies and Deputy Chair of the AK Party, and her husband İlyas Kaya is that a very large gain was made in a short time from transactions in Özata Denizcilik shares and that the exits took place before the crisis. According to the spokesperson of the political party who made the allegations public, the couple paid in a total of approximately 163 million lira and withdrew approximately 2.17 billion lira. On 26 September Kaya announced that she had resigned from all her posts. The Financial Crimes and Laundering Investigation Bureau of the Istanbul Chief Public Prosecutor’s Office, for its part, announced on 29 September that the letter concerning the freezing of all assets of İlyas Kaya and Fatma Betül Sayan Kaya had been sent to the relevant institutions.

For this reason, the assessment voiced in public that “no action whatsoever has been taken” is not correct. On the other hand, the public statement does not show that a statement has been taken or that police custody or personal coercive measures have been applied, either. Nor should the figures be presented as if they were established proceeds of crime. For in public debate the “total amount withdrawn” and the “gain” are at times confused with one another. The money paid in, the money withdrawn, the realised profit and the benefit obtained from the offence must each be calculated separately. Resignation is not proof of the offence either; it relates to political responsibility and does not remove criminal liability.

The main possibilities that need to be examined in law are the use of information not disclosed to the public, participation in a manipulative trading scheme, and knowingly dealing with assets derived from crime. The conditions of each are different. Nor does being a former minister or a party official confer any privilege in respect of private investment transactions of this kind. The constitutional arrangement for the trial of ministers before the Supreme Criminal Tribunal (Yüce Divan) is limited to offences relating to their office and does not extend to private transactions after leaving office. A party post, for its part, is not a procedural immunity. It is not possible to explain with certainty, without seeing the file, why a particular step has not yet been taken. The order in which the evidence is gathered, the legal conditions of the measures and the investigation strategy may play a part. These, however, are possible explanations; they cannot be presented as if they were the actual reasons.

B. Equal Standards and the Perception of Impunity

If persons facing similar allegations are seen to be dealt with at different speeds and to a different extent, and no objective legal reason for this can be discerned, the perception of impunity and political privilege grows stronger. This perception weakens not only society’s sense of justice but also the general preventive function of the criminal norm. To the extent that people believe that the same act does not produce the same consequence for everyone, they lose their reason for complying with the norm.

The yardstick here must be not political identity but a comparable level of evidence and risk. Treating persons in the same situation differently on account of their political connections is incompatible with the rule of law. By contrast, the absence of police custody or pre-trial detention is not in itself proof of privilege, because these measures have their own conditions. What will secure public confidence is not the detention of everyone, but the gathering of evidence independently of political connections, the application of the same standards and the disclosure of the process to the public to the extent compatible with the confidentiality of the investigation. Just as the presumption of innocence is no obstacle to an effective investigation, so public anger cannot be a ground for conviction in advance.

CONCLUSION

The events referred to in public as the “fund scandal” bring into play a cluster of offences ranging from market manipulation to aggravated fraud and from breach of trust to laundering. Each of these offences, however, has its own elements and its own conditions of proof. Unless investment loss is distinguished from crime, fund size from loss, the amount withdrawn from gain, and the scope of the investigation from the scope of liability, the legal foundation of the investigation is weakened.

The debate on effective remorse calls for the same rigour. The payment under SerPK Art. 107(3) is made to the Treasury and produces effects only in respect of trade-based market manipulation. The voluntary restitution accounts opened in the name of the TMSF, while a useful instrument in favour of investors, do not take the place of that provision unless the law is amended. Clarifying this distinction now will prevent the loss of rights in future for suspects and investors alike.

The success of this investigation cannot be measured by the numbers of persons taken into custody and detained alone. The pattern of trading must be uncovered, the real decision-makers identified, the proceeds of crime preserved, investors’ losses made good to the greatest extent possible and the shortcomings in the supervisory chain disclosed. If the trial remains confined to a few visible managers, the money cannot be brought back and the problems that allow the same structure to be set up again persist, even heavy penalties will not constitute an adequate response.

The law’s answer to these events must secure three things together. The personal liability of those who committed offences must be established, the property rights of investors must be protected, and political or economic power must be prevented from turning into a privilege in the face of the investigation. If any one of these three is lacking, the value of the other two will also be diminished.