Turkey's 2026 Fund Scandal: What Happened, Who Is Investigated, What Investors Get Back

Turkey's 2026 investment fund scandal began on 17 September 2026. That day the Capital Markets Board (SPK) closed every TEFAS-traded fund run by seven portfolio managers to trading: Tera, Pusula, Hedef, Atlas, A1, Pardus and Bulls. It ordered 130 of those funds liquidated, a figure later revised to 131. According to the SPK and Central Registry (MKK) records, 455,758 individual investors hold units in them. Turkish press reports put the funds' size at roughly 826 billion lira, and Reuters put it at more than $20 billion. In parallel, Istanbul prosecutors are running a criminal investigation into alleged market fraud and money laundering. By 12 October President Recep Tayyip Erdoğan said 282 people faced legal action and 84 had been remanded in custody. No one has been convicted. Everyone named in this article is presumed innocent, and the allegations below are attributed to the officials or parties who made them.

What exactly is the scandal?

The funds at the centre are ordinary Turkish mutual funds sold through TEFAS, the national fund-trading platform. They include money market funds and lightly regulated hedge funds (serbest fon). In the year to August 2026, Tera Portföy's assets rose more than tenfold to $14.3 billion and Pusula Portföy's rose 13-fold to $13.2 billion. Tera's TLY hedge fund is the largest of the liquidated funds. Reuters says it returned 747% between January and July 2025, when it had fewer than 200 investors. Its cumulative gain then passed 15,000% after it opened to the wider public, and by September 2026 it had 102,616 investors and about $5 billion in assets.

Prosecutors suspect that money raised by the funds was used to push up the prices of thinly traded listed shares, including shares of companies tied to the fund managers' own groups. According to their reported testimony, prosecutors asked Tera board members Emre and Kerem Alkin how Tera Yatırım's market value grew from about 1.4 billion lira to 280 billion in one year. Tera chairman Emre Tezmen has rejected the allegation that fund money was steered into group shares and said he did not know which stocks the funds traded. The SPK's own complaints name trading in Tera Finansal Yatırımlar Holding (TRHOL), Katılımevim (KTLEV), Destek Holding, Hedef Holding and Özata Denizcilik shares as suspected market fraud.

How did it unravel in September 2026?

The Justice Ministry says the investigation formally began on 19 August, when prosecutors asked the SPK for documents. In late August the SPK tightened limits on how much of a single company a fund may hold. Enterprise AM, citing Bloomberg, ties this to an MSCI warning about coordinated fund trading. On 15 September Pusula Portföy told KAP, Turkey's public disclosure platform, that it had defaulted on redemption payments in some funds. The next day Borsa İstanbul's BIST 100 index fell more than 6%, and a circuit breaker halted trading at 16:04. On 17 September Finance Minister Mehmet Şimşek chaired the Financial Stability Committee, which blamed the turmoil on credit and liquidity problems in a limited number of funds and said there was no structural risk to the market. The SPK then shut the seven managers' funds, ordered the liquidations and temporarily cut the minimum margin-trading equity ratio from 35% to 20%.

Who is under investigation, and what do they say?

The case is run by the Istanbul Chief Prosecutor's terrorism-financing and money-laundering bureau. Pusula Portföy chairman Muhammed Yarız was the first person remanded in custody, on 17 September, and 48 people were put under travel bans the same day. On 22 September a court remanded Tezmen, Pusula Holding chairman Serdar Turhan, former Tera Portföy general manager Alper Öztürk, and Tera board members Emre and Kerem Alkin. Tera Portföy chairman Erdin Özel and Tera Yatırım CEO Emir Münir Sarpyener followed on 30 September. Prosecutors say $15 million and €25 million were transferred from Turhan's and Yarız's accounts to Switzerland. They also seized two private jets and a yacht valued at about 1.8 billion lira. The SPK has filed criminal complaints against 37 people over TRHOL trading.

The case reached politics on 26 September. Opposition YENİ Parti spokesman Zeynel Emre alleged that former minister Fatma Betül Sayan Kaya had turned about 63 million lira of Özata Denizcilik shares into 1.34 billion lira, and that her husband İlyas Kaya made similar gains. She resigned as AK Party deputy chair the same day, was expelled from the party on 7 October, and testified as a suspect with her husband. According to reports of that testimony, the couple denied acting on any tip-off. Prosecutors froze their assets. The couple also paid about 2.2 billion lira into a refund account. Justice Minister Akın Gürlek said such repayments do not close a case. Former SPK chairman İbrahim Ömer Gönül, who led the board from April 2022 to April 2026, testified as a suspect on 30 September. On 4 October prosecutors asked the Finance Ministry for permission to investigate him for misconduct in office, and Şimşek assigned the ministry's inspection board to make a preliminary review. The SPK has denied a report that it ignored 130 warnings from Borsa İstanbul. Family Minister Mahinur Özdemir Göktaş called an opposition claim about her family a case of mistaken identity and filed criminal complaints against three YENİ Parti MPs. On 9 October journalists Şaban Sevinç and Mustafa Balcı were remanded on charges of publicly spreading misleading information about the probe. İsmail Saymaz and Murat Ağırel were later placed under house arrest. Opposition figures condemned the arrests.

What will investors get back?

The SPK appointed Türkiye İş Bankası to liquidate Tera's funds and Ziraat Bankası to liquidate the others, and it extended the deadline from three months to six. On 30 September it approved interim payments of up to 1 million lira for each reconciled investor in the Tera, Pusula, Atlas and Hedef funds. Reuters reports that people with net investments below that amount are repaid in full. On 8 October Şimşek said the money of 43,000 investors had been transferred to banks after 17 funds were liquidated, with money market funds and small savers paid first. Vice President Cevdet Yılmaz chairs a Fund Coordination Council set up on 29 September. He has said no public money will be used and that the state never guaranteed these funds the way it guarantees deposits. Since 1 October, accounts opened in the name of the Savings Deposit Insurance Fund (TMSF) have let people return 'excessive gains' voluntarily. On 9 October Gürlek said 141 people and 73 companies had made 187.65 billion lira from three funds, many by exiting between 13 and 16 September, and their accounts were later frozen. An AK Party bill submitted on 9 October would set the 1-million-lira interim payment rule in law, index net investments to inflation and bar those found to have manipulated the funds from payouts. Economist İnan Mutlu warned that pro-rata payouts may return less than some investors put in.

What happens next?

Timeline and pending milestones. 19 August 2026: the prosecutor's inquiry begins. 15 September: Pusula reports redemption defaults. 16 September: BIST 100 falls more than 6% and trading is halted. 17 September: the SPK orders the liquidations. 29 September: the Fund Coordination Council is set up and the State Supervisory Council opens an audit. 1 October: the voluntary refund accounts open. 9 October: the liquidation bill is submitted to parliament. 14 October: the bill is due in the Plan and Budget Committee, according to press reports. 16 October: S&P's scheduled Turkey rating review. November: MSCI's market-classification review, according to Enterprise AM. By mid-March 2027: the six-month liquidation window ends. Still to come are indictments, any trial dates, a decision on whether Gönül can be investigated, final payout ratios for investors above 1 million lira, and how much of the 187.65 billion lira is actually returned.