Istanbul October 5 2022: A Turkish court has ruled that five suspects accused of stock-market fraud be jailed pending their trial, state-run Anadolu Agency reported.
The five people, who were detained over the weekend, are accused of artificially elevating the prices of banking shares through trades worth 30 billion liras ($1.6 billion) in spot and futures equity markets over three months, Anadolu said Tuesday, citing an investigation document prepared by the prosecutor.
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The court in Istanbul also ruled that three other suspects be released on probation, with two banned from leaving Turkey. There hasn’t been any comment from those held or lawyers representing them.
Turkey began rounding up the people accused of fraud on Sunday and issued detention warrants for 10, two of whom remain at large. The arrests came after banking shares slumped 39% between Sept. 13 and Sept. 29, erasing about $14 billion in market value and leading to liquidity problems for some brokerages.
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Suspects had executed the trades in an organized manner and created a false impression of strong interest in banking shares, according to the prosecutor’s document.
The selloff followed an unprecedented rally in equity prices, during which the Borsa Istanbul Banks Index surged about 150% between mid-July and its peak on Sept. 12. That was accompanied by increased levels of trading in futures and leveraged markets.
Turkey’s banking index was trading 2.1% lower on Wednesday after rising 10% over the past three days through Tuesday.