From: Rabbi Moshe Sofer
To: Frankfurt am Main
An agent appointed to lend charity endowment funds to non-Jews instead misappropriated the funds for his own use. The Chasam Sofer rules that the agent cannot be compelled to pay the lost interest (mevatel kiso shel chaveiro), the treasurer may not reappoint this unreliable agent, and recommends the Heter Maharam (heter iska) as the proper mechanism for investing charity and orphans' funds going forward, critiquing the penalty-clause approach of the Knesses HaGedolah as inadequate.
Source: Shu"t Chasam Sofer CM §48