Unlicensed Forex from Abroad: Court of Cassation 2024/8652

The company is incorporated in England and says it operates under the rules there; it has no office in Türkiye, and customers send their money directly to an account abroad. The defence of many schemes that collect money with promises of investment sounds like this. If a person reaches people living in Türkiye, signs portfolio management contracts with them and transfers the money to the overseas accounts of a foreign company, is that person liable under Turkish criminal law for not having obtained permission from the Capital Markets Board (SPK)? Or does the activity being based abroad remove that liability?

In its decision of 14.10.2024, Docket No. (E.) 2024/768, Decision No. (K.) 2024/8652, the 7th Criminal Chamber of the Court of Cassation (Yargıtay) unanimously upheld the conviction for violating Capital Markets Law No. 6362 of a defendant who was found to have collected money from the market by carrying out portfolio management activity without SPK permission.

📄 The account in the indictment

According to the text of the decision, the following facts were established in the investigation:

On the basis of these findings, a public prosecution was brought for violating Law No. 6362 against the defendant together with another defendant who falls outside the scope of this review. This is not the first time the case has reached the Court of Cassation: the chamber's decision states that the judgment under appeal is a judgment rendered after reversal. The criminal court of first instance's decision, Docket No. 2022/226 E., Decision No. 2023/551 K., is this new judgment given after the reversal.

🇬🇧 The "our activity is in England" defence

The defendant did not accept the charge. The main lines of his defence are as follows:

This defence raises the question of where the activity was legally carried out. Even in the defendant's own statement it is accepted that the customers were in Türkiye. According to the text of the decision, the customers reached the defendant "in various ways", the contracts were made with the defendant, and the defendant explained to these people that they could put their investments to work. The fact that the money's final stop was an account abroad does not remove the stages of finding the customer, persuading them and concluding the contract.

The chamber did not write a long reasoning discussing the defence separately; however, based on the whole case, it found lawful the first instance court's conclusion that the defendant carried out portfolio management activity without SPK permission and collected money from the market. This result reflects the position that the existence of a foreign company, or its incorporation abroad, does not take activity directed at people in Türkiye outside the obligation to obtain SPK permission.

📊 How did the expert describe the activity?

The expert report obtained during the proceedings clarified the technical side of the dispute. According to the report:

The importance of the report is that it relies on the content of the activity, not its name. Forming a portfolio from money collected from customers and trading on the currency market with that portfolio was assessed as falling within portfolio management, which is listed among the investment services regulated by Law No. 6362. For the administrative sanction side of directing investors to foreign forex companies, see the article on referral to a foreign forex company.

🏛️ The chamber's reasoning for upholding

The defendant and his defence counsel appealed, arguing that the decision was contrary to procedure and the law. In its reasoning, the 7th Criminal Chamber of the Court of Cassation emphasised the following points:

On this reasoning, the grounds of appeal of the defendant and his counsel were rejected and the judgment was unanimously upheld in line with the Notice of the Chief Public Prosecutor's Office. The phrase in the reasoning, "entered into force later and contains more favourable provisions", shows that the act began under the earlier law and that the court compared the two laws and applied the one more favourable to the defendant.

📘 The permission system in Law No. 6362

The permission system on which the decision rests emerges from reading several articles of Law No. 6362 together:

In this case the defendant's defence rested on the claim that the activity complied with the regulations of a foreign country. However, the permission the Law requires is that of the Capital Markets Board; the chamber also based its assessment on the absence of SPK permission. For the assessment of a different decision on the liability of a person who contributes by collecting money for an unauthorised forex activity, see the article on aiding unauthorised forexTR.

🆕 A separate offence for crypto asset service providers

The decision examined concerns forex and portfolio management. Similar "platform based abroad" defences are also common today in the crypto asset field. Article 109/A, added to Law No. 6362 by Article 12 of Law No. 7518 dated 26.06.2024, regulates unauthorised crypto asset service provision as a separate offence:

This provision introduced a special rule for the crypto asset field alongside the general offence of unauthorised activity in Article 109/2. Article 109/A was not applied in the decision examined; the judgment concerns an act from before its addition and forex/portfolio management. Even so, the decision's approach of treating the absence of SPK permission as decisive for activity directed at people in Türkiye is also worth noting for discussions in the crypto field.

🙋 Frequently Asked Questions

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