The cheese is no longer in the mousetrap

We are experiencing and debating a major fund scandal estimated to be worth 20 billion dollars. Who is guilty, who is the fraudster, and who walked away with how much money? These are matters for the prosecutor's office and the courts.

Those who speculate, those who commit fraud, and those who gain unfair profits through influence peddling must be punished, and the ill-gotten wealth must be recovered down to the last penny. I am not even debating this.

I believe the other two pillars of the incident must also be thoroughly discussed: the public institutions tasked with monitoring and auditing, and investor behavior...

What happens to savers in Turkey is usually explained by citing the Banker Crisis of the 1980s. But the story goes back even further.

In the late 1960s, Hastaş collected money from tens of thousands of small savers with the slogan "People's Sector." Problems emerged in the 1970s. The need for a law to regulate the capital market became a serious issue. But Turkey could not pass this law for about a decade.

In 1977, following a parliamentary question, the Ministry of Trade admitted to the Grand National Assembly of Turkey (TBMM) that it was not "monitoring" the extent to which the company was achieving its founding purpose. Hastaş had reached 55 thousand partners. The necessary Capital Markets Law was passed in 1981, came into effect at the beginning of 1982, and the liquidation of Hastaş was requested.

But before the ink on the law had even dried, the Banker Crisis erupted.

Bankers were buying banks' certificates of deposit and selling them to the public at much higher interest rates, using them as collateral. Banks were uncomfortable with this. A Banks Association meeting was held at the Altınyunus Hotel in Çeşme, İzmir. I also covered that meeting. Bankers were banned from selling bank certificates of deposit. When the inflow of new money into the system was cut off, the bankers went bankrupt, and the savings of hundreds of thousands of people were lost.

Years passed. Neither the state nor the investors learned their lesson... Titan emerged. Pyramid schemes emerged. Crypto scams emerged. Çiftlik Bank emerged.

THE LESSON INVESTORS MUST LEARN

Just three years ago, the Seçil Erzan incident broke out. In those days, I wrote an article in 12 Punto titled "The distance is short, the cheese is big." In the report prepared by DenizBank's own inspectors, there was a very striking statement regarding the football players who invested money in the fund:

“Believing in a promise of 253 percent return in dollar terms in 46 days, and furthermore, handing over the money in cash and through third parties, is behavior not expected from any person of average intelligence.”

They wrote it politely: The bank inspectors were bluntly calling those who lost their money “morons.” Do you lament losing your money, or being humiliated in public by bank inspectors?

In that article, I reminded readers of a simple life rule we learned from the Tom & Jerry cartoons of our childhood:

If the distance is short and the cheese is big, there is definitely a trap at the end of it.

Unchecked greed for profit creates a perfect market for fraudsters.

Human behavior does not change much. Some people make a lot of money. Others see it and come along. The gains of those who enter first appear to those who follow as proof that the system is sound.

Then another emotion kicks in:

“Everyone is winning, why shouldn't I? I'm not stupid. Even if the system collapses, I'll get out in time.”

But when everyone tries to get out at the same time, the door becomes too narrow.

Moreover, market experts had already brought the speculative movements in the funds where problems arose to light and issued warnings a year ago. Those who invest in high-risk hedge funds and equity funds must also bear the responsibility for the risks they take.

THE STATE DOES NOT LEARN ITS LESSON EITHER

But it is not just the investor who does not learn a lesson. The state does not learn either.

Today's incident has a very important difference from the Seçil Erzan incident. In the Seçil Erzan incident, people were carrying millions of dollars in bags, handing them over in cash, and taking them outside the banking system. They were faced with a promise of returns that defied logic and imagination.

For that incident, we can say, “The cheese was in the mousetrap.”

Today, however, the cheese is no longer inside the mousetrap. So where is it?

Could the cheese have entered the capital market that is supposed to be regulated?

You are not facing a Ponzi scheme set up on the street. There are portfolio management companies. There are investment funds. There are companies traded on Borsa Istanbul. All of them are authorized. There are public institutions tasked with granting them operating licenses, monitoring, and auditing them.

The investor naturally thinks:

“This place is being audited.”

Now, besides asking the investor “How did you get fooled?”, we also need to ask the public authorities tasked with monitoring and auditing:

What were you doing?

Moreover, the danger was not unknown. According to statements by Treasury and Finance Minister Mehmet Şimşek and the Capital Markets Board (SPK), it was observed in the last quarter of 2025 that some funds were causing price movements in stocks with low free float that could not be explained by the companies' economic realities. Mehmet Şimşek had clearly said, “We know, we will take the necessary measures.” The issue was taken to the Financial Stability Committee on December 2, 2025. A working group was established within the SPK the next day.

This means the state had seen the danger. But the comprehensive Investment Funds Guide, which was the result of the process that began in December 2025, was only published nine months later, on August 28, 2026. A few weeks later, the crisis erupted.

Now it is our right to ask:

If you saw the danger, why couldn't you prevent it in nine months?

Did the bureaucracy work slowly? Was the audit mechanism insufficient? Did you encounter resistance from interest groups? Or were other obstacles placed in front of the authorized persons and institutions that wanted to take measures?

We do not know. But we must learn, and we must share what we learn with the entire global public. Because another great danger that goes beyond fraud is at the door:

Confidence in the Turkish capital market.

Moreover, alarm bells from abroad had already started ringing. MSCI raised concerns among international investors regarding the free float rates of some companies in Turkey and the positions of some funds in these stocks. It began to remove some fund shares from the free float calculation. And it set a date for Turkey: November 2026.

MSCI announced that if sufficient, concrete, and reliable progress is not seen in the Turkish market by the index review in November, it could initiate a consultation process regarding how Turkey and Turkish stocks will be evaluated. The Economist also raised the possibility of Turkey being downgraded from the emerging markets league. Even the fact that this has started to be discussed in international financial circles is an alarm in itself.

Foreign investors do not just look at the balance sheets of Turkish companies. They also look at the transparency of the market, whether prices are truly formed in the market, whether the rules are applied to everyone, and whether the market to which they entrust their money is truly audited.

The economic management goes to London and New York, holds meetings with international investors. They are trying to attract foreign funds to Borsa Istanbul.

Is it just the economic management? President Erdoğan, accompanied by Treasury and Finance Minister Mehmet Şimşek, receives Larry Fink, CEO of BlackRock, the world's largest asset management company, at Dolmabahçe and invites him to invest in Turkey.

Then someone comes along and destroys the reputation of Turkish capital markets and the public institutions tasked with the oversight and audit of these markets.

President Erdoğan said, “Whoever is responsible will be held accountable before the law.” Chief Advisor to the President Oktay Saral also stated, “No matter where it leads, no matter who it touches, the facts must be revealed with all clarity.”

These words are important. Because our problem is not limited to just punishing the criminals. It is also about restoring confidence in Turkey's capital markets.

If some people have not only victimized investors for the sake of lining their own pockets but have also endangered international confidence in Turkey's capital markets, the damage they have done to the country could be much greater.

Especially if Turkey faces the danger of being downgraded from emerging market status to frontier market status—or in my terms, the third league—as a result of this...

This is no longer just called fraud. It goes as far as treason against Turkey.

For over sixty years, we have been living through different versions of the same story. You put the fraudster in jail, a new one appears. You seize the speculator's assets, someone else comes along. You tell the investor, “Beware of the big cheese,” they forget a few years later. But if the state's audit institutions do not learn from the past either, we will experience the same things again in the future.

We used to say, “Free cheese is only found in a mousetrap.”

Now we are looking for the answer to another question:

What if the free cheese is not in the mousetrap, but inside the capital market that is supposed to be regulated?

Eliminating this suspicion is the duty of the state, not the investor.