Russian President Vladimir Putin shakes hands with Turkish President Tayyip Erdogan. Photo: Reuters / Sergei Karpukhin

Turkey’s stock market is down 1.58% in local currency terms during the past month, after a spectacular run-up that put it among the very top performers among emerging markets.

Nearly half the fall was due to one sock, Turkiye Halk Bank. On September 7, US prosecutors charged top executives of Halk Bank along with a former Turkish economic minister with conspiracy to evade US sanctions on Iran. Former Halk Bank CEO Suleyman Aslan and former economy minister Mehmet Zafer Caglayan are among the defendants.

The Turkish government is outraged. Justice Minister Abdulhamit Gul denounced the charges as a “fabrication” of the “terror group” led by exiled Turkish imam Fetullah Gulen, whose extradition Turkey has long demanded. President Erdogan himself warned that the action against the former economy minister is an act “against Turkey.”

It may not be coincidence that charges were filed during the same week that Turkey announced the purchase of Russia’s advanced S-400 air defense system, an action highly inconsistent with Turkey’s membership in NATO. Turkey has found common cause with Iran over the Kurdish problem–both countries have a Kurdish minority that might break away–in alliance with Russia.