Jerusalem – A few months ago, FXCM, a foreign currency exchange (forex) business, began to target the Hareidi market. As part of their marketing platform, they approached HaRav Shmuel Eliezer Stern for a “heter iska”, a halachic document that states that profits made by Jewish investors in a Jewish owned company are not interest, which is prohibited by Jewish law, but are shared profits from return on investment.
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Upon receiving this “heter iska” from the Rav, articles were published in various Hareidi papers praising FXCM and using the Rav’s name and his association with Rav Vosner’s Beit Din as a banner to turn the “heter iska” into a “hechsher” (kosher seal of approval) for FXCM’s business The notion that a “heter iska” is a seal of approval for a business is “very far from the truth.”among potential Hareidi clients.
However, the Rav wishes it to be clear that the articles in these papers took the Rav’s granting a “heter iska” out of context.
The Rav explained that he only gave a “heter iska”, and therefore only looked to see if profits were interest or a return on investment; he did not advocate the business in any way. And while articles published in Hareidi news sources called this heter iska a “first step of the business’s actions towards the Hareidi sector,” the Rav, upon being approached about the subject, said that this was not his intention and that the notion that a “heter iska” is a seal of approval for a business is “very far from the truth.”
More recently, the truth about forex is beginning to come to light. A few weeks ago, Arutz Sheva published an op-ed that I wrote called “Beware of FXCM and Forex Dealers.” The article explains the dangers of the forex market, how forex dealers misrepresent risk, abuse leverage and present information in a way that encourages customers to trade greater sums more regularly and amplify risk. Around a week after the article was published, I was contacted by an Arutz Sheva reader and friend of HaRav Stern who asked that I speak to the Rav personally in order to clear the issue
In the conversation with HaRav Stern, the Rav explained that he did not know of the tremendous risk of FXCM and the foreign currency exchange markets. He said that he was shocked that his granting a “heter iska” was used as any sort of advocacy in articles written in praise of FXCM. Furthermore, the Rav resented that his association with Rav Vosner’s Beit Din was mentioned in the articles; the Rav gave the “heter iska” entirely on his own. Finally, the Rav said that upon his friend reading him the article from Arutz Sheva, he contacted FXCM and told them that they may no longer use his name in order to advocate their business.
The Rav made it clear that if the intention of any business is to cause another to gamble, take chances with extraordinary risk of losing money in order to try to turn a profit then it is against the hashkafah (worldview) of the Torah.
The responsibility to stay away from scams like forex rests on the consumer. There is no such thing as a get rich quick scheme. King Solomon wrote that, “He who runs to get rich quick will not go unpunished. (Mishlei 28:20).” This does not mean that God will strike down every man that tries to win the lottery; it means that a person who thinks he is going to get fast money without any catch is just missing the catch. The next time you pass the lottery stand, come across a forex site, or hear about a get-rich quick MLM, stay away; they are more likely to take your money that give you any.
(Mr. Degani is an American immigrant to Israel with an MBA who has developed a system to help people manage a budget suitable for leading a moderate lifestyle.The author’s blog is at http://shomershekalim.wordpress.com.)
Note: Mr. Degani wrote this article at the request and with the approval of HaRav (Rabbi) Stern
I don’t care if he used a heter iska or poskind that foreign currency is made with treifus indgredients or any other bubba meisa that was credible as long as it will keep most of the chareidi community from losing thier money in foreign currency trading. The Chareidi community has a target on its back with their lack of sophistication on the most basic investment and risk management tools are incredibly trusting and gullible to these scams.
There are so many real scams to be wary of, we read about them every day. I can not believe online FX trading is now a new scapegooat, pretty soon, all futures, options, and stocks will be banned
Ken Grossman, I support you
Good luck on this one, you will need it!!
Danny Gordon
if you pay a higher fee for the letter, you can do it with a Sheenooy….gevaldick
Thank you danny for all of your sopport.
Forex is extremely risky and should only be traded by experienced traders.
The article touched on, but did not really address the main issue. Chareidim in E”Y, as a general statement, are not educated enough to do these things. While I’m sure that a few are, most are not.
Smart investing is one of the ways that our communities could and should be making money. However, because nobody is willing to learn about it, it ends up being opportunity lost. Because of this lack of education, it is better they stick to small, direct investments in “blue chip” companies with little risk.
It really is a shame that a profession like day-trading or investment is out of reach for most. It is an honest way to make money that rewards hard work.
The stock market is also gambleing.
And don’t say that its not!
Its just a cover for buissness.
see how many people are addicted to it
“he contacted FXCM and told them that they may no longer use his name in order to advocate their business.”
The title of the article is incorrect and misleading based on this quote. The article doesn’t say he removed the Heter Iska, It says they can’t use his name to advocate the business. There is a huge difference.
Ken Grossman is a real ehrlicha yid who is a huge baal tzedaka and constant baal chesed. His company is very reputable and not at all what the author is implicating.
The author clearly has an agenda here. Don’t believe everything you read.
Buying a house is also gambling as there is a risk that the value will go down. Is this assur as well?
Look at some of the wealthy chasssidish rebbes with all their investments. Are they gambling?
People have the right to make their own financial decisions.
To all friends,
I am a personal friend and aquiantance of Ken (Akiva) Grossman, one of the partners in FXCM. Akiva is one of the most amazing people that i have known. The amount of time that he is makdish for limud hatorah is admired by all the people that know him. He is mechabed talmidei chachomim in an outstanding way and is machnia himself to gedolei roshei hayeshiva. This article is taken way out of proportion and as i have heard from Akiva himself many times before, if you don’t know what your doing, don’t get involved. It is true that on the whole, chareidi people are not knowledgable in this area, but there are some very sophisticated people in Israel and all FXCM has done was to make it possible for them to get involved in a way that would be 100 percent kosher. Many people have invested and have been very matzliach. I continue to wish Akiva lots of hatzlacha in all that he does.
your friend,
itchy
it looks like the typical naive israeli who lost a lot of money on forex trying to blame someone else how about buying a house in beit shemesh a few years ago was that a gamble too? the truth is that any type of investment is a risk and forex is no different but because its so easy to trade forex now days people look at it as a gamble if you play the game the right way there is ways to make money just look at goldman sachs and ubs etc that were all profitable
Why would a trading company need a Heter Iska?
Anybody who talks anyone into doing this is “over” on Lifnei Eever Lo Teetain Michshol.
If you have to be talked into it with a seminar or whatnot, that is a sign that you are too naive to be doing this kind of thing, and will eventually lose your pants.
If it so easy to make money trading, then the seminar-givers wouldn’t be wasting their time giving seminars, they’d be trading.
But they know better, so they prey on the unsophisticated and uninformed.
I don’t know Grossman, and I don’t know if he trades, gives seminars, or simply provides a forum for trading, but anyone who convinces people to do this for a living is doing a huge “Avla”.
They are taking advantage of desperate, uninformed people and suckering them in.
The only way a person should do this business is with proper training, apprenticing by an existing firm, and under the watchful eye of an experienced professional.
To compare a single inexperienced trader to Goldman Sachs or UBC is not merely foolish, it is a sign that the poster has a stake in this kind of business in some way.
What kind of nonsense is this? How can a rabbi “remove” a heter iska? A heter iska is a document; either a place has one or it doesn’t. No rabbi “grants” it, and no rabbi can “remove” it.