Dei'ah veDibur - Information & Insight

A Window into the Chareidi World

21 Sivan 5767 - June 7, 2007 | Mordecai Plaut, director Published Weekly










Produced and housed by
Shema Yisrael Torah Network
Shema Yisrael Torah Network











The Need for Halachic Supervision Over Stock Market Investments

By M. Green

While investing used to be only for people in the know, today many in the chareidi public — from simple Jews to men of means — are investing money or have provident funds (kupot gemel) or self-improvement funds (karnot hishtalmut) their employers have opened for them.

Most salaried employees in Israel have either such mutual funds or provident funds. The managers of the funds try their best to maximize investors' profits by investing in stocks and/or bonds, which can lead to halachic stumbling-blocks.

When it comes to company shares, there is no guarantee the companies keep Shabbos. Merely by acquiring shares through the fund manager, any direct or indirect purchaser essentially becomes a partner in the company, making him one of the owners of a company that desecrates Shabbos.

The halachic discussion on the question of whether a share owner is considered a partner in the company became more pressing when the 1999 Stock Market Law was legislated and the Securities Exchange Commission demanded that all shares traded on the stock market carry equal rights, giving every shareowner:

1) The right to vote at general gatherings, which determine how the company is operated;

2) The right to appoint a board chairman, with the board of directors managing the company and authorized to dismiss the board chairman;

3) The right to examine all of the company's management processes.

These rights granted to shareowners would seem to indicate that from a halachic standpoint they really own a percentage of the company and if it desecrates Shabbos they are partners in a company that desecrates Shabbos and benefit from profits derived through chilul Shabbos.

HaRav Aryeh Dvir, head of the Machon Kalkoloh Al Pi Halochoh at the Beis Medrash Lehalochoh Behisyashvus warns that many people are unknowingly loaning money at interest by purchasing company bonds from companies that have no heter isko.

"The public should also demand close, constant supervision of every investment fund to insure the investments are made according to halochoh," says HaRav Dvir.

Since the average investor could never keep track of the investments and insure they are kosher there is a need for an investment management company that would only offer investments that have been thoroughly checked.

There are at least two Israeli fund groups today that claim halachic supervision. One is the Hilat Shoham group, including Shoham P Shekel Plus and Shoham P Gmisha, managed by Menora Funds manager. The other one could not be determined by press time.


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