What is the legitimate Shariah position of an investor who collected funds for trade, then it became clear to him that his partner embezzled the funds and paid fictitious profits to the investors from the original capital? What are the rights of the investors over him, and would repaying the funds to them in this situation be considered riba (usury)?

Issues of disputes are not within the purview of a fatwa as much as they are within the judiciary, which hears the parties and the details of the claims. The questioner mentioned that he set a percentage for himself from the profits of money he collected from his friends and relatives and gave it to his partner to invest. However, the questioner did not clarify whether this was with the permission of the money owners, or the type of this percentage (partnership, agency, brokerage), and from where it would be taken (the partner's share, the capital owners' share, or from the total profits). Therefore, the matter requires judicial ruling, arbitration, or direct consultation with scholars.

In general, if the money owners gave the money to the questioner for speculative investment (mudarabah), and then the questioner gave it to another speculator, this is not permissible unless with explicit or implicit permission from the capital owners. Otherwise, the money is guaranteed by the questioner if it is lost or incurs a loss. However, if the questioner was merely an intermediary, he does not guarantee the money, but he is not allowed to take a percentage unless those who pay it from their share are aware.

The affected parties must account for the fictitious profits that the partner gave them from their original capital and demand from him only what completes their capital. Moreover, the hand of the speculator (mudarib) is a hand of trust (amanah), and he does not guarantee losses unless there is transgression or negligence. Any loss that occurs without transgression or negligence is borne by the capital owners, and the speculator only loses his effort.