• Unanimous Agreement of Muslim Scholars
All Muslim scholars without exception are agreed that dishonesty, fraud and deception are strictly forbidden, whether these are done by word or deed, by concealing the price of the sale object or telling lies, and whether this involves transactions or giving advice and counselling. See Sunan At-Tirmidhee along with Tuhfat Al-Ahwadhee, 4/544; Ibn Hazm, Al-Muhallaa, 9/73; Az-Zawaajir, 1/236; and Al-Mawsoo’ah Al-Fiqhiyah Al-Kuwaytiyah, 31/219.
Ibn Battaal said,
“Scholars are all agreed that a person who practises najash is a sinner.” Fath Al-Baaree, 4/447; Ibn Al-Humaam, Fath Al-Qadeer, 5/239; and Takmilat Al-Majmoo’, 12/115.
There is no doubt that the manipulative practices carried out by some cunning stock traders in the financial market constitute the worst form of fraud and deception.
Abdullaah ibn Abee Awfaa (may Allah be pleased with him), the noted companion, narrated that the Prophet (صَلَّى اللَّه عَلَيْهِ وَسَلَّمَ) said,
“A naajish (i.e. one who serves as an agent to bid up the price in an auction) is a cursed taker of usury.” Fath Al-Baaree, 4/446.
“Najash is not permissible as it is a form of deception.” Ibid.
Shaddaad ibn Rushd said,
“Whoever considers deception and fraud in sales and other transactions to be permissible is a non believer who deserves to be killed as punishment. He is to be asked to repent [of this sin]. If he refuses, then he is to be killed.” Haashiyat Ibn ‘Aabideen, 4/98. See also Az-Zawaajir, 1/236.
Imaam Ibn Al-Qayyim (rahimahullaah) also writes,
“The greater part of a [Muslim] leader’s office and even its basis is to fight confidence tricksters because they do a great deal of harm to the welfare of the [Muslim] community and their harm has far-reaching effects, which is hard to avoid. The [Muslim] leader should therefore not neglect his duty towards them. He must punish them and their likes severely and not alleviate their punishment; for their evil is great and their harm is far-reaching.” At-Turuq Al-Hukmiyyah, pp. 202-203. Dar Al-Bayaan edition.
The Prophet (صَلَّى اللَّه عَلَيْهِ وَسَلَّمَ) personally undertook to disapprove of the deceptive practices of some manipulators. As he once passed by a heap of eatables (corn) and thrust his hand in that heap, his fingers were moistened. He said to the owner of that heap of eatables (corn), “What is this?” He replied, “Messenger of Allah, these have been drenched by rainfall.” The Prophet (صَلَّى اللَّه عَلَيْهِ وَسَلَّمَ) then remarked, “Why did you not place this (i.e. the drenched part of the heap) over other eatables so that the people could see it? He who deceives is not of me (i.e. is not my follower).” Reported by Muslim in his Saheeh, Book of Faith, 1/99.
The fact that he thrust his hand in the heap of food on display provides abundant evidence that he used to monitor the market activities and even did what he could to stop any deceptive practices.
When he noticed that some unacceptable practices became apparent in the market, he appointed ‘Umar ibn Al-Khattaab (may Allah be pleased with him) to supervise the marketplace in Madeenah and Sa’eed ibn Al-‘Aas to supervise the marketplace of Makkah. In fact, after he passed away, the rightly-guided caliphs who came after him followed in his footsteps by undertaking the religious duty of enjoining good and forbidding evil. At other times, they appointed others to do the job. Ibn ‘Abd Al-Barr, Al-Istee’aab, 2/621; ‘Ali ibn Burhanud-deen Al-Halabee, As-Seerah Al-Halabiyah, 3/42445. See also Al-Kattaanee, At-Taraateeb Al-Idaariyah, 1/287.
These and other incidents plainly show that Islam strives hard to put an end to any form of manipulative acts and practices so that markets become stable and flourishing and thus receive Allah‟s blessings.
In fact, even though spying is strictly forbidden in Islam, some scholars have allowed it in the context of finding out about traders who resort to fraud and deception in their dealings with others.
One such scholar said, “A person who is in charge of enjoining good and forbidding evil must frequent the markets and even spy on traders and closely monitor their practices. If he finds someone who engages in practices which are not allowed by the Islamic Law (Sharee’ah), he must subject his to discretionary correction and even ask him to leave the market[Ibn Bassaam Ash-Shaafi‟ee, Nihaayat Ar-Rutbah Fee talab Al-Hisbah, p. 74] in order to rid it of deception and fraud. Deception and its Detrimental Effects on Contracts (in Arabic), p. 60.