Istanbul Stock Exchange CEO Arrested Amid Market Manipulation Probe
Istanbul stock exchange CEO Korkmaz Enes Ergun was arrested amid a bribery and market manipulation probe following a major liquidity crisis involving Pusula funds.
The CEO of the Turkish stock exchange, Korkmaz Enes Ergun, was arrested on Saturday as part of an expanding corruption and market manipulation investigation. Turkish authorities are probing suspicions of criminal organization membership and bribery, focusing on whether stock prices on the Istanbul bourse were artificially inflated through specific investment funds.
The investigation follows a sudden liquidity crisis on September 17, when Pusula Portfoy, one of the country's major fund management firms, announced it could not meet investor redemption deadlines. The default triggered a sharp sell-off on the BIST 100 index, forcing temporary trading halts. The index plummeted by 5.54% to close at approximately 13,122 points, marking an 11% weekly decline.
According to reports in Turkey, approximately 129 billion liras, equivalent to about $2.7 billion, were withdrawn from Pusula funds starting in late August. In response to the turmoil, the Turkish Capital Markets Board liquidated 131 investment funds and referred the case to the Istanbul Public Prosecutor's Office. Investigators are examining potential market manipulation and money laundering activities.
Korkmaz Enes Ergun has served as the exchange's CEO since March 2021 after a 29-year career at the institution. Alongside Ergun, authorities have detained a total of 99 individuals as part of the sweeping financial probe. Investigators are currently reviewing the suspects' assets and financial transfers while regulatory bodies face scrutiny over past alerts regarding suspicious fund activities.
