Turkey's stock market scandal affects nearly half a million investors. Police have made several arrests and an AKP politician has resigned.

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 ( AKP ) has resigned.

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.

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