Capital Markets Offenses

Capital markets offenses are serious economic offenses, such as insider trading and market manipulation, regulated under Capital Markets Law No. 6362, aiming to protect investors.

Capital Markets Offenses consist of crimes defined in Capital Markets Law No. 6362.

These offenses include Insider Trading as defined in Article 106 of the relevant law, Market Manipulation as defined in Article 107, Unlawful Public Offering and Unauthorized Capital Market Activities as defined in Article 109, Breach of Trust and Forgery as defined in Article 110, Failure to Provide Information and Documents, Obstruction of Audit as defined in Article 111, Irregularities in Legal Books, Accounting Records, and Financial Statements and Reports as defined in Article 112, and Violation of Confidentiality Obligation as defined in Article 113.

Among these offenses, the offense of Insider Trading is regulated under Article 106 of the law, and is defined as giving a buy or sell order for, or changing or canceling an order given for, relevant capital market instruments, directly or indirectly, based on information concerning capital market instruments or issuers, which is capable of affecting the prices, values, or investors' decisions regarding those capital market instruments, and which has not yet been disclosed to the public, thereby securing a benefit for oneself or another. The perpetrators of the offense are specified as managers of issuers or their affiliated or dominant partnerships; persons who possess such information due to their shareholding in issuers or their affiliated or dominant partnerships; persons who possess such information due to the performance of their business, profession, or duty; persons who obtain such information by committing an offense; and persons who know, or ought to know if proven, that the information they possess is of the nature specified in the legal provision. The prescribed penalty for the offense is imprisonment from three to five years or a judicial fine, and it has been ruled that if a judicial fine is imposed for this offense, the penalty to be given shall not be less than twice the benefit obtained.

The offense of Market Manipulation is regulated under Article 107 of the law, and is defined as making purchases or sales, placing, canceling, or modifying orders, or executing account transactions with the aim of creating a false or misleading impression regarding the prices, price changes, supply, and demand of capital market instruments. It has been ruled that the perpetrators of the offense shall be punished with imprisonment from three to five years and a judicial fine from five thousand to ten thousand days, and furthermore, the amount of the judicial fine to be imposed for this offense shall not be less than the benefit obtained through the commission of the offense. In the second paragraph of the legal provision, it has been ruled that perpetrators who provide false, incorrect, or misleading information, spread rumors, report news, make comments, or prepare reports, or disseminate them, with the aim of influencing the prices, values, or investors' decisions regarding capital market instruments, and thereby secure a benefit, shall be punished with imprisonment from three to five years and a judicial fine up to five thousand days.

The situation of effective remorse is also regulated in the context of the Market Manipulation Offense, and the first paragraph of the legal provision regulates the reductions that the perpetrator who commits the offense will benefit from if they show effective remorse by paying to the Treasury an amount equal to twice the benefit obtained or caused to be obtained, which shall not be less than five hundred thousand Turkish Liras. If an amount equal to twice the benefit obtained is paid to the Treasury before the investigation commences, no penalty shall be imposed on them. If the payment is made during the investigation phase, the penalty to be imposed shall be reduced by half; if it is paid until a judgment is rendered during the prosecution phase, the penalty shall be reduced by one-third.

Cases not considered insider trading and market manipulation are specified in Article 108 of the CML. Accordingly; transactions carried out by the Central Bank of the Republic of Turkey (CBRT) or another authorized official institution, or persons acting on their behalf, for the purpose of implementing monetary, exchange rate, public debt management policies, or ensuring financial stability; share buy-back programs implemented in accordance with Board regulations, employee share ownership programs, or other share allocations to employees of the issuer or its affiliated company; and the acts of buying or selling capital market instruments, or placing or canceling orders, exclusively for the purpose of supporting the market price of these instruments for a predetermined period, provided that they are executed in accordance with the Board's regulations on price stabilization transactions and market making within the scope of this Law, are situations not considered insider trading and market manipulation.

In cases where the offenses of Insider Trading and Market Manipulation are committed for the benefit of a legal entity, specific security measures applicable to legal entities shall be imposed on the relevant legal entity.

The offense of Unlawful Public Offering and Unauthorized Capital Market Activities is specified in Article 109 of the CML, and according to the first paragraph, it has been ruled that those who make a public offering of capital market instruments without fulfilling the obligation to publish an approved prospectus, or those who sell capital market instruments without an approved issuance document, shall be punished with imprisonment from two to five years and a judicial fine from five thousand to ten thousand days, and in the second paragraph of the same provision, it has been ruled that those who engage in unauthorized activities in the capital market shall be punished with imprisonment from two to five years and a judicial fine from five thousand to ten thousand days. If the perpetrators specified in the second paragraph also commit the offense defined in the first paragraph within the scope of committing this offense, they shall only be penalized for the offense defined in this paragraph, but the penalty to be imposed shall be increased by half.

The offense of Breach of Trust and Forgery is regulated in detail under Article 100 of the CML. Firstly, it is stated that the acts specified in this article constitute the aggravated form of the offense of breach of trust; however, in this case, the penalty to be imposed according to the second paragraph of Article 155 of Law No. 5237 shall not be less than three years. This offense is defined as selling, using, pledging, concealing, or denying capital market instruments, cash, and all other kinds of valuable assets deposited or delivered, whether physically or by registration, to an investment institution, a fund board within the scope of Article 58, and collateral managers within the scope of Article 59, for one's own or another's benefit, due to capital market activities, or in the capacity of a trustee, or for management, or as collateral, or under any other name whatsoever; applying prices, fees, and charges that are clearly different from comparable entities with another enterprise or person with whom it is directly or indirectly related in terms of management, audit, or capital, and reducing the profits or assets of publicly held companies by engaging in disguised transactions; or reducing their profits or assets, or preventing the increase of their profits or assets, by engaging in transactions such as making agreements or commercial practices containing different prices, fees, charges, or conditions, or generating transaction volume, contrary to comparability, market practices, and the principles of prudence and honesty in commercial life, with real or legal persons with whom publicly held companies and collective investment institutions, and their subsidiaries and affiliates, are directly or indirectly related in terms of management, audit, or capital. In the second paragraph of the relevant legal provision, it has been ruled that perpetrators who corrupt, destroy, alter, or render inaccessible the records kept within an Investment Institution, Fund Board, and Collateral Managers shall be punished with imprisonment from two to five years and a judicial fine from five thousand to ten thousand days; however, the legal consequences attached to conviction under the provisions of Law No. 5237 regarding the offense of forgery of documents shall also apply to those convicted of this offense. It has been ruled that if a person who commits the offense of breach of trust falling within the scope of subparagraphs (b) and (c) of the first paragraph of the legal provision shows effective remorse by paying to the Treasury an amount equal to twice the payment specified in the fourth paragraph of Article 21 of the Law, in addition to that payment: no penalty shall be imposed on them if paid before the investigation commences; the penalty to be imposed shall be reduced by half if paid during the investigation phase; and the penalty to be imposed shall be reduced by one-third if paid until a judgment is rendered during the prosecution phase.

The offense of Failure to Provide Information and Documents, Obstruction of Audit is regulated under Article 111 of the CML, and it has been ruled that a perpetrator who fails to provide, or provides not in the requested manner, information, documents, and records, including those kept in electronic form, requested by the Board or those assigned under this Law, shall be punished with imprisonment from one to three years. A perpetrator who obstructs the performance of duties by persons assigned by the Board or under this Law shall be punished with imprisonment from six months to two years. If force or threat is used against the assigned persons during this obstruction, a penalty shall also be imposed according to the relevant articles of Law No. 5237.

The offense of Irregularities in Legal Books, Accounting Records, and Financial Statements and Reports is regulated under Article 112, and it has been ruled that those who intentionally fail to keep the books and records they are legally obliged to keep in accordance with proper procedure, or who fail to retain the books and documents they are obliged to retain for the statutory period, shall be punished with imprisonment from six months to two years and a judicial fine up to five thousand days. In the second paragraph of the law, it has been ruled that those who intentionally prepare financial statements and reports that do not reflect the truth, open false accounts, commit all kinds of accounting fraud in records, prepare false or misleading independent audit and valuation reports, and the responsible board members or responsible managers of issuers who facilitate their preparation, shall be punished according to the relevant provisions of Law No. 5237. However, for a penalty to be imposed for the offense of forgery of a private document, the condition that the forged document must have been used is not require __DIR__ . '/../../footer.php'; ?>