Halkbank Case in U.S. Delayed to March 11 as Shares Tumble in Istanbul

A key court conference in the U.S. criminal case against Türkiye’s state-owned lender Halkbank has been postponed from March 3 to March 11 following a joint request by the prosecution and the defense. The development comes months after the U.S. Supreme Court allowed the case to proceed. The delay rattled markets in Türkiye, with Halkbank shares plunging and triggering a circuit breaker on Borsa Istanbul.

U.S. court postpones key conference in Halkbank sanctions case

A federal court conference in the long-running U.S. criminal case against Türkiye’s state-owned lender Halkbank has been postponed to March 11 from its original March 3 date, according to a filing in Manhattan federal court.

The adjournment was requested jointly by both the U.S. government and Halkbank’s legal team. Court documents did not specify the reason for the delay.

The conference is widely viewed as a procedural step that will help determine the next phase of the case, which accuses the bank of participating in a scheme to evade U.S. sanctions on Iran.

The postponement comes roughly five months after the U.S. Supreme Court declined to review an earlier federal appeals court decision that allowed the prosecution to move forward.

Market reaction: Halkbank shares slide, circuit breaker triggered

News of the delay added to pressure on Halkbank shares in Türkiye’s financial markets.

During trading on Borsa Istanbul, HALKB shares fell sharply and triggered a circuit breaker after declining 5.65% intraday.

In a filing to the Public Disclosure Platform (KAP), the exchange announced that trading in the stock was temporarily halted and shifted to a single-price auction process.

The statement said:

“Trading in HALKB.E was temporarily suspended during continuous trading and single-price order collection began. Trading will resume at 17:25:15 following the order matching process.”

Halkbank shares are currently down ca 6%.

Long-standing dispute between Ankara and Washington

The Halkbank case has been a persistent source of tension in U.S.–Türkiye relations for several years.

Turkish President Recep Tayyip Erdoğan has repeatedly criticized the prosecution, describing it as an “unlawful and ugly step.”

U.S. prosecutors originally filed charges against Halkbank in 2019 during President Donald Trump’s first administration. The case itself is unrelated to the current geopolitical tensions in the Middle East.

Prosecutors allege that the bank helped Iran circumvent U.S. sanctions through a complex network of financial transactions.

According to the indictment, Halkbank:

• Used money service providers and front companies in Iran, Türkiye and the United Arab Emirates

• Secretly transferred around $20 billion in restricted funds

• Converted Iranian oil revenues into gold and cash

• Created fraudulent food shipment documents to justify transfers linked to oil proceeds

Halkbank has pleaded not guilty to charges of bank fraud, money laundering and conspiracy.

Legal battle over sovereign immunity

The case has generated a prolonged legal dispute over whether a foreign state-owned bank can claim immunity from U.S. criminal prosecution.

In 2023, the U.S. Supreme Court temporarily set aside the prosecution, although it agreed that congressional protections shielding foreign states from civil lawsuits do not automatically apply to criminal cases.

The Supreme Court then instructed the Second U.S. Circuit Court of Appeals to reconsider whether centuries-old common law principles on sovereign immunity might protect Halkbank.

In October 2024, the appeals court concluded that no such immunity applied, clearing the way for the prosecution to continue.

Halkbank subsequently filed another appeal with the Supreme Court. The Trump administration argued in court filings that state-owned companies should not be shielded from criminal prosecution under common law immunity doctrines.

Possibility of settlement discussions

The latest delay has fueled speculation that negotiations could be underway behind the scenes.

Legal analysts say the March 11 conference could serve as a procedural reset to determine whether the case will proceed toward a full trial or move toward a potential settlement.

Reports circulating in late 2025 suggested that Turkish officials had raised the possibility of a $100 million settlement proposal during high-level discussions in Washington.

No formal agreement has been announced.

Markets watching next court steps closely

The Halkbank case is closely monitored by investors because of its potential implications for both the bank and broader U.S.–Türkiye relations.

The upcoming March 11 conference could clarify the direction of the case, including whether:

• The prosecution moves toward a full federal trial

• Settlement negotiations gain momentum

• Additional procedural disputes emerge

For now, the postponement underscores the complexity of a case that has been unfolding in U.S. courts for more than six years.

Source: Reuters, Investing

Author: PA Turkey Editorial Desk