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

Turkish investors are facing significant losses as the stock market scandal unfolds. According to the Istanbul Public Prosecutor's Office, approximately 455,000 investors have been impacted by the major market manipulation scandal, which saw the benchmark BIST 100 index plummet by 6% in one day and lose about 12% within several trading days.

This unprecedented event led to the resignation of an AKP politician, Fatma Betul Sayan Kaya, who faced allegations regarding stock transactions involving her and her husband. Over 45 people have been arrested, and more than 45 funds, including those managed by Pusula Portfoy and Tera, are set to be liquidated. The liquidation process, initially extended from three to six months, aims to prevent selling at fire-sale prices, though the actual duration remains uncertain due to market conditions.

Independent financial advisor Aysel Gundogdu warns that investors may not fully recover their losses, especially in the case of hedge funds and equity funds holding worthless junk stocks. The crisis, according to her, goes beyond a simple liquidity crisis, pointing to structural failures in management and oversight. Politicians are now under scrutiny, with opposition leader Selcuk Ozdag planning to bring the issue to Parliament for a parliamentary investigation.