Trading Ban Annulled: Social Media Stock Group, Council of State

Social media accounts giving share tips, sudden price movements and a group of investors profiting from them: this is a picture the Capital Markets Board has examined often in recent years. Whether everyone in the group can be made subject to the same measure is a separate question. In this decision the Board imposed a six-month trading ban on exchanges on an investor who had a TRY 1,000.00 money transfer with one of the posting accounts a year earlier and who traded the shares concerned; the regional administrative court annulled the ban, and the Council of State upheld that annulment.

By its decision of 22.04.2025, Docket No. E.2025/669, Decision No. K.2025/1674, the 13th Chamber of the Council of State rejected the Capital Markets Board's appeal and upheld, by majority and finally, the regional administrative court decision annulling the temporary trading ban.

🔎 The Board's review and the finding about the claimant

According to the text of the decision, the Board examined unusual price and volume movements in the share markets of two publicly traded companies, in the period 27.11.2023-20.12.2023 for one and 20.11.2023-20.12.2023 for the other. The review report found that, through two separate social media accounts, posts had been made that steered investors regarding these shares, encouraged their purchase and amounted to recommendations. The names of the companies and accounts and the identities of the account administrators are anonymised in the source text.

The finding about the claimant consists of two elements:

According to the summary of the first-instance decision, the claimant reached a trading volume of TRY 175,699,063 in one share market, and within the group which the claimant was considered to belong to, the claimant's benefit was determined as TRY 39,561.90. Relying on these findings, on the ground that there was reasonable suspicion that the acts listed in the second paragraph of Article 107 of Capital Markets Law No. 6362 had been committed, the Board decided, under the first paragraph of Article 101 of that Law and the first paragraph of Article 5 and the first paragraph of Article 6 of the Communiqué No. V-101.1 on Measures to Be Applied in Reviews of Insider Trading and Market Fraud, to impose a temporary trading ban on exchanges for 6 months on the claimant, starting from transactions dated 22.12.2023.

🏛️ The administrative court and the regional administrative court

The administrative court dismissed the case. According to its reasoning, the first paragraph of Article 101 treats reasonable suspicion that the acts listed in Articles 106 and 107 have been committed as sufficient for a temporary trading ban. In the court's view, the claimant's money transfer with the user of the account posting recommendations, and the benefit obtained from the claimant's trades in the shares, were capable of constituting reasonable suspicion.

The regional administrative court accepted the appeal, set aside the first-instance decision and annulled the Board's measure. The main links of its reasoning are as follows:

1. The first paragraph of Article 101 provides reasonable suspicion of the commission of the act defined in the second paragraph of Article 107 as the ground for a temporary trading ban.
2. Reasonable suspicion that other acts and transactions were carried out as participation in an act not defined in Article 107/2 cannot be regarded as "reasonable suspicion of the commission of the act defined in 107/2"; the opposite view would contradict the principle of legality.
3. In the case at hand, the Board made no finding or assessment giving rise to reasonable suspicion that the claimant had given false, incorrect or misleading information, spread rumours, made comments or disseminated them in order to influence investors, and had thereby gained a benefit.
4. If the claimant's acts fall within another provision of the Law that carries a sanction, it is clear that the Board may assess them and impose a sanction under that provision.

⚖️ The Council of State's decision and the dissenting opinion

In its appeal petition the Board argued that the acts were carried out as a whole by the group the claimant belonged to, that some persons made misleading posts while others obtained benefits, and that joint control was exercised over the acts in Article 107/2. The claimant submitted no defence, and the Council of State's Reporting Judge gave an opinion in favour of upholding.

The 13th Chamber of the Council of State stated that the decision under appeal complied with procedure and the law and that the grounds of appeal did not require reversal, and upheld the decision under Article 49 of Law No. 2577. The decision was given on 22.04.2025, finally and by majority.

The dissenting opinion takes a different approach. According to it, the offence in 107/2 shows no special feature as regards participation, and a trading ban may also be applied to those who take part in this offence as co-perpetrators, instigators or accomplices. The dissent also cites the definition of "persons acting in concert" in the Communiqué on Market-Disrupting Actions and states that, when the claimant's link with the social media account user, the share purchases, the money transfers and the benefit obtained are assessed together, reasonable suspicion exists and the regional administrative court decision should have been reversed.

🧩 The ground for the measure: which act, whose act?

The centre of gravity of the decision is the ground element of the administrative act. Under the first paragraph of Article 101 of Law No. 6362, the Board is authorised to take every necessary measure, including a temporary or permanent trading ban on exchanges in respect of the capital markets instruments concerned, against natural or legal persons, and officers of legal persons, where there is reasonable suspicion that they have committed the acts listed in Articles 104, 106 and 107. The addressee of the measure is the person for whom there is reasonable suspicion that they "committed" the act concerned.

The Board's act was expressly based on the second paragraph of Article 107. This paragraph punishes those who, in order to influence the prices or values of capital markets instruments or investors' decisions, give false, incorrect or misleading information, spread rumours, report news, make comments or prepare reports, or disseminate them, and thereby gain a benefit, with imprisonment from three to five years and a judicial fine of up to five thousand days. The first paragraph regulates a different act: trading, placing orders or carrying out account movements in order to create a false or misleading impression.

The regional administrative court's approach requires a finding that the claimant personally carried out one of the alternative acts in the second paragraph. Trading in the shares and having a money transfer with an account user is not, by itself, an act of giving information, commenting or disseminating. The Board's group-wholeness approach was seen as relying on a ground not defined in the Law; the majority did not follow the dissent's participation view.

One limit of the decision is also notable: the regional administrative court expressly stated that, if the claimant's acts fall under another sanction provision of the Law, the Board may act under that provision. The decision therefore does not contain a finding that the claimant's conduct was lawful; it rests only on the mismatch between the legal ground chosen and the facts established.

📊 On what findings is reasonable suspicion established?

According to the Communiqué definition cited in the dissent, reasonable suspicion is suspicion formed by taking into account trading patterns, account transfers, price-volume analyses, news and announcements, and indications supporting them. In this case, the concrete fact linking the claimant to the group was a single TRY 1,000.00 transfer made about a year before the review period. The regional administrative court did not dispute the existence of the transfer, but held that this fact and the trading transactions were not enough to establish reasonable suspicion of the act in 107/2. A different dispute, concerning the need to prove group membership with concrete evidence, is examined in the decision on proof of acting in concert in market-disrupting actionsTR on this site, in the context of an administrative fine. For a criminal case concerning trading against a social media recommendation, see the article on share trading against a recommendationTR.

A temporary trading ban is a measure that can be applied before a review is concluded. For a different case on the limits of the Board's power to impose measures in terms of non-retroactivity, the article is an SPK trading ban retroactiveTR on this site can be consulted.

🆕 Article 101 and the latest amendment

A third paragraph was added to Article 101 of Law No. 6362 by Article 10 of Law No. 7518 of 26.06.2024. Accordingly, within the reviews and inspections carried out under Articles 104, 106 and 107, a decision may be given to remove content and/or block access in relation to broadcasts made by the Board over the internet; the decision is sent to the Association of Access Providers for implementation.

This paragraph was adopted after 22.12.2023, the date the trading ban began, and the decision text does not mention this power. The amendment is not part of the reasoning of the decision; it is background information showing that the Board's tools in reviews arising from social media have expanded.

❓ Frequently asked questions

For detailed information and legal support, you can contact Savun Law & Consultancy. Contact details are on the contact page, and other case law is in the Precedent DecisionsTR archive.