Turkey: Insider Trading In Turkey

Last Updated: 15 February 2010
Article by M. Volkan Dülger

The base of the stock market business relies on the law of supply and demand. The application of this law of supply and demand is based on the natural buy or sell behaviors of the investors. In order to provide a natural buy or sell environment, none of the investors should have any access to the confidential information of the companies registered in stock market. Insider trading is the use of confidential information about a business gained through employment in a company or a stock brokerage, to buy and/or sell stocks and bonds based on the private knowledge and to provide benefit or prevent loss for oneself or for the third parties in this way.1

Insider trading had not been determined as a crime until the occurrence of certain events in the history. First attempts to overcome insider trading activities have been in England in 17th century. In 1696 the Board of Trade took some precautions over the stock transactions. However most effective actions taken on the uprising danger came in the United States. The United States government put the Securities and Exchange Act into action and established the Securities and Exchange Commission to provide the enforcement of it.

In order to understand the insider trading phenomenon better we may take the biggest amounted case in the history as an instance. Dennis Levine was an investment banker in the United States. Due to his position in the investment system he could have the intelligence about the companies to be purchased by bigger companies. Depending on this intelligence, he bought the purchased companies stocks at lower prices before the purchase and sold them later at higher prices after the purchase took place. In this way he raised 12,6 million dollars. Consequently he was sentenced with prison because of his illegal actions.2

With an amendment on the Turkish Capital Market Law, Insider trading was defined as a crime under Turkish law for the fist time. Article 47/1-a of the Turkish Capital Market Law reads "Insider trading is the use of the information, which may affect the value of investment instruments and that is not serviced to public yet; in order to make profit or prevent loss for oneself or for the third parties and by this way damaging the equality of opportunity of the investors". According to this article, to define an activity as an insider trading crime;

  1. The information subject to the criminal activity should not be known by the public yet and this information should have the power to increase or decrease the value of the investment instrument. In this respect this information may be related to stock issuers (their loss or profit, reserves funds, projects, integrating with other corporations...etc.), capital market or the country's political decisions, as well.
  2. Person, who has this information, should make his decision of buying or selling his/her investment instruments according to the information and by this way he/she is to make benefit for herself/himself or the third parties.
  3. The use of information has to cause damage on the equality of the opportunity of the investors and by this way the offender should make profit or prevent loss.

People who are to breach this law may be;

  1. Managers, auditors, members or the executive officers of the board of directors and other employers of the issuers, capital market associations or other enterprises affiliated to or dominating above.
  2. Officials who may have aforementioned information as a result of the implementation of their duties.
  3. People who may have this kind of information directly or indirectly as a result of their contacts with the above.

Insider trading is sometimes considered like one of the most popular kind of crimes concerning capital markets which is defined as 'Manipulation'. However there are certain differences between these two crimes. Firstly; manipulation results with a change on the value of the investment instrument, whereas insider trading just uses information about the value and never affects the value itself. Secondly, for the occurrence of the manipulation crime, existence of the intention is sufficient. However in the latter occurrence of the offense depends on the presence of a concrete benefit on the assets of the offender. The last difference is about the information object to the crimes. Manipulator uses false information with the intent of creating an artificial market environment, while insider trader is concerned with the true intelligence.

The hardest point of the insider trading crime is the provability. Even though there are sample cases in other countries, there are not so many examples in Turkey. The Capital Markets Board, which is in charge for the supervision of the capital markets in order to prevent illegal activities in the market, made 406 criminal complaints since 2002. Merely 4 of these were about the insider trading.3 Considering the increasing numbers of investors in Turkish Stock Markets, it is hard to conclude that insider trading is not very much committed in Turkey. To our opinion it is obvious that there are some loopholes or there is a lack of effective supervision of the Board over the markets.

In an era which makes us witness to breathtaking developments on information technologies, it gets easier for a malicious person to have the information he needs to breach the law. In this respect to overcome the rising problem of unequal market conditions for the investors and especially the insider trading activities, there should be more strict regulations and sanctions. Moreover these sanctions are to be applied in fast processing judicial bodies.


1. http://dictionary.law.com/Default.aspx?selected=983; 25.01.2010

2. http://www.borsamania.net/forum/index.php?topic=9081.0; 25.01.2010

3. http://borsamagdurlari.blogcu.com/Bilgilendirme+Notlari, 28.01.2010

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions