(Sept 23): Turkiye arrested the brokerage founder at the centre of an investigation into imploded stock funds that have caused billions of dollars of investors’ money to evaporate.
Emre Tezmen, the chairman of brokerage Tera Yatirim Menkul Degerler AS, was detained on Sept 19 and arrested early Wednesday alongside Tera board members Kerem Alkin and Emre Alkin as well as another company executive, Alper Ozturk, Turkiye’s NTV news channel reported.
Kerem Alkin, who retired from Turkiye’s Foreign Ministry last year, served as the country’s ambassador and permanent representative to the OECD from 2021 to 2024. His brother Emre is a prominent economist and television commentator who regularly appears on national channels.
Pusula Finans Holding AS chairman Serdar Turhan has also been arrested as part of the same investigation, NTV said.
Authorities have frozen assets linked to executives at several financial firms and restricted asset-reducing transactions by certain executives, their spouses and close relatives, according to the state-run Anadolu Agency. Prosecutors also requested data on money and crypto transfers abroad since 2024 to determine whether assets were moved overseas, Anadolu said.
The funds in question attracted hundreds of thousands of retail investors and concentrated their holdings in illiquid, low-free-float stocks, in which a limited supply of tradable shares made prices easier to inflate.
In some cases, they used those assets as collateral for short-term loans that were then reinvested in the same stocks, according to finance experts who reviewed the transactions. Turkiye’s justice minister described the scheme as “Ponzi-like”.
On Wednesday, Bulls Yatirim Menkul Degerler said its chairman, Kemal Akkaya, who was also detained as part of a fund probe, was released after giving his testimony to the prosecutor. Akkaya told prosecutors Bulls Yatirim has no involvement in “Ponzi” or “chain scheme” fund structures, the statement said.
Tera is at the heart of the scandal. The company is a once-obscure brokerage and asset manager whose own stock had risen more than 50,000% at its peak just four years after its listing. The company announced on Sept 16 that it had defaulted on some redemption requests following mass outflows, sparking widespread investor panic that sent stocks tumbling.
In response, the regulatory Capital Markets Board ordered the liquidation of 131 funds run by seven firms, including Tera. There are 455,758 individuals in the funds, the board said on Wednesday.
The strain on funds had been building since August, when regulators tightened rules on stock funds with concentrated holdings in companies with limited free floats, forcing some managers to unwind positions.
The Borsa Istanbul All Shares Index has slumped 12% since the start of last week, with about 50 stocks in the benchmark losing 40% or more in that period.
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