Traditionally the capital markets became the one of the most popular investment tools in the world for the small investors and institutional investors thanks to technological progress, securitization, derivative financial instruments which are diversifying the capital market instruments. This popularity increases economically the importance of the capital markets. Such that, the price fluctuations in the capital market may influence positively or negatively the general economic tendency of the countries. As well the other markets, the capital markets have to be regulated with some rules. Because the investors who are operating in the stock exchange, need to be protected by law in order to bring into safety the capital market by averting the crimes which may be commited in the capital market and with a deterrent sanction system.
In this concept, the Turkish Capital Market Law No.6362 is regulating the capital market crimes between article 108 and 112 in Turkish Law system. In this context The statutory crimes are counted as Abuse of Information, Market Fraud, Irregular Public Offering and Unauthorized Capital Market Operations/Activities, Misappropriation and Counterfeiting, Hold Out On/ Audit Disrupting and Irregularity in the Commercial Books, Accounting Records and Financial Statements.
Herein report we will analyze Abuse of Information and Market Fraud Crimes.
The Abuse of Information Crime which is stated in article 106 of the Capital Market Law, is traditionally known as the Insider Trading action. For the materialization of the crime, the Law is looking for the existence of the information about an issuer company which may influence directly or indirectly the price, the value of the related capital market instruments or the decision of the investors and information which is not shared before with the public. It is regulated that in case of a manager or shareholder of the issuer company or subsidiary of the issuer company, the persons who know this information for the reason of business, profession or professing, persons who obtained this information to commit a crime or the persons who have to know the characteristics of the information use this information and afford an advantage for his self or for another person by ordering/ changing/cancelling the purchase and sale order, the material and the moral element of the crime will be constituted and the criminals will be sentenced or fined between two and five years and if they got some material advantage they will be subject of a judicial fine which is not less than two times of the amount.
Article 107 of the Capital Market Law is regulating Market Fraud Crime by dividing to Operational Manipulation and Manipulation of Information. Operational Manipulation is stated as the persons who purchase and sale/ order/change/cancel or who make account activities with the intention to create an incorrect or misleading impression relating to capital market price, price change and market forces, they will be sentenced between two and five years and they will be subject of a judicial fine between TRY- 100,000 and TRY-200,000 and if they got some material advantage the judicial fine may not be less than the advantage. As for Manipulation of Information, there is the statement that the persons who share, rumor, make news, comment or prepare an incorrect or misleading information for the purpose to influence the price, price change of the capital market instruments or the decision of the investors will be sentenced between two and five years the and will be fined until TRY-100,000 of judicial fine.
We have to emphasize that the action to have position in accordance with the future expectation/speculation is legal. However the action to head the prices and market in accordance with his requisitions/manipulation is crime.
In conclusion the capital market is a market which has to be inspected and controlled because his vital role for the economy. The way to increase the investors number is providing the necessary measures to protect them. Because this reasons the action which may result with loss of confidence has to be determined immediately and has to be punished resolutely.
