Key facts
- Turkish authorities arrested Tera Yatirim Holding Chairman Emre Tezmen and four others.
- The probe involves a 'Ponzi-like scheme' affecting over 450,000 investors.
- Funds worth approximately $18 billion are being liquidated.
- Tera's fund management subsidiary failed to make payments on September 16.
- Investors face a wait of up to six months for their holdings to be sold.
- Authorities have frozen assets linked to executives at several financial firms.
Turkish authorities have arrested Emre Tezmen, chairman of Tera Yatirim Holding, along with four other individuals, as part of an investigation into a "Ponzi-like scheme" that has impacted over 450,000 investors. The brokerage firm is at the center of a scandal involving funds worth approximately $18 billion that are now undergoing liquidation.
The crisis began when some funds, including those managed by Tera Portföy and Pusula Portföy, encountered difficulties in meeting investor withdrawal requests. These funds held substantial stakes in shares that were illiquid and difficult to sell quickly without significantly impacting their prices. Tera's fund management subsidiary officially reported payment failures on September 16, with Pusula Portföy also experiencing delays.
Tezmen, initially detained on September 19, was formally arrested early Wednesday. Other arrested individuals include Tera board members Kerem Alkin and Emre Alkin, Tera Portföy general manager Alper Öztürk, and Pusula Finans Holding chairman Serdar Turhan. Turkish broadcasters reported that Kerem Alkin is a former ambassador to the OECD, and Emre Alkin is an economist and television commentator.
Authorities have frozen assets linked to executives at several financial firms and imposed transaction restrictions on them, their spouses, and close relatives, according to state news agency Anadolu. Prosecutors are also seeking records of money and crypto transfers abroad since 2024 to investigate potential asset movements overseas.
The scheme's structure involved funds heavily investing in shares of their own parent company or related firms with small public floats and low daily trading volumes. This created a feedback loop where the fund's own buying activity artificially inflated stock prices, boosting reported net asset values and attracting new investors through social media. Fresh capital was then used to purchase more of these illiquid stocks, further perpetuating the cycle. Critics, including MSCI, had previously warned about "coordinated trading behavior" in June concerning fund holdings in smaller Turkish companies, and S&P Dow Jones had placed Turkey under review.