A financial scandal involving roughly $17 billion in liquidated investment funds is now directly touching Erdogan's clos...

A financial scandal involving roughly $17 billion in liquidated investment funds is now directly touching Erdogan's closest advisers, with arrests, resignations, and frozen assets spreading through Turkey's political establishment. The crisis came to a head on September 16 when Turkish markets collapsed, exposing what authorities describe as a scheme where funds concentrated investments in low-liquidity, thinly traded stocks, artificially inflating their prices. One Tera Group fund reportedly posted returns of over 1,500% in a single year. Around 500,000 investors are estimated to have been affected, and authorities have ordered the liquidation of approximately 130 funds. Investors should not expect to recover the full inflated values shown in their portfolios. The political fallout has been swift. Fatma Betul Sayan Kaya, vice president of Erdogan's ruling AKP party and a former family minister, resigned Sunday after opposition accusations that she sold shares in Ozata Denizcilik, a naval shipbuilding company, just before the September 16 crash. Tera Group's brokerage arm reportedly controlled 95% of that company's shares at one point, and its market value had ballooned to $5 billion, surpassing some of Turkey's largest corporations. Two key arrests have followed. Emre Tezmen, president of Tera Group, was detained on charges of running a pyramid-like scheme. He also served on the board of Turkey's Central Securities Depository until his arrest. Muhammed Yariz, head of Pusula Portfolio and a former AKP figure, was also arrested. The connections to Erdogan's inner circle go further. One of the president's senior advisers served on the board of Tera Portfolio Management until January 2026. Another former presidential adviser remained on the board until the crisis broke. That adviser's brother, a former ambassador, also held board positions across multiple Tera Holding companies. Justice Minister Akin Gurlek announced Friday the freezing of assets belonging to 46 legal entities, 18 funds, and 42 individuals, with travel restrictions placed on 37 suspects. Erdogan, who met with his cabinet Monday and is convening an emergency session with economic advisers to...