Taking percentage of profit without informing the investor

salam u alaikm
i gave money to a broker who promised me 5% return on my investment. He would take the money and “invest” it in a company. He had a personal relationship with this company and explained the company would not directly with anyone else except through him. He acted as a broker. Later it transpired the company had agreed with him 6.5% for any investments - he was keeping the 1.5% and giving 5% to the investors.He neither managed the money nor invested his own. He would take 1.5% every month of the profit

  1. was the onus on him to make clear his cut or should the investor have asked what his fees were as a broker (this information was hidden at the start of the investment and was found out after a year when an investor asked him)
  2. is it permissible for him to take this 1.5% of the profit, when neither the capital was his nor was there any risk. The only service he did was send out whatsapp messages informing people of this investment opportunity and set out standing orders to pay investors their return.

thank you


May Allah bless you.

Its difficult to give you a definite answer. But from what you have explained certain points are not clear:

  • you made an arrangement with him to invest your money, did you agree on a compensation for him to do act as a broker?
  • did you agree that there should be no involvement of a third party?