Insider trading

QUESTION:

Is insider trading permitted?

ANSWER:

Insider trading is not permitted in terms of South African law. By engaging in ‘insider trading’, one may be fined or imprisoned according to the law. It is not permissible for a Muslim to bring humiliation upon oneself and the Ummah by engaging in ‘Insider Trading’; hence, we advise abstention.

However, there is no issue for directors and people who have inside information about the company to purchase and sell shares whenever they wish in terms of Shariah. They cannot be restricted, irrespective of whether they have inside information about the company or not.

ALLAH TA’ALA ALONE KNOWS BEST!

ANSWERED BY:

Mufti Mohammed Desai

Date: 20 Shawwal / 30 April 2024