A broker for Defense Secretary Pete Hegseth reportedly attempted to invest in major defense funds in the weeks before the war in Iran began.
Three people familiar with the matter spoke to the Financial Times, claiming Hegseth’s Morgan Stanley broker contacted BlackRock in February to make a multi-million dollar investment in the group’s Defense Industrials Active fund. The fund includes billions in holdings from defense corporations like Northrop Grumman and Lockheed Martin. Hegseth’s broker was unable to invest in the defense fund because the product was unavailable to Morgan Stanley clients.
Later that month, President Donald Trump launched strikes against Iran with Israel. Hegseth was one of the strongest supporters of the attacks. It’s unknown whether Hegseth was able to invest in other defense companies or similar funds. BlackRock and Morgan Stanley declined to comment to Financial Times. Department of Defense representatives denied the allegations.
“This allegation is entirely false and fabricated,” chief Pentagon spokesperson Sean Parnell said in a statement after the Financial Times report was released. “Neither Secretary Hegseth nor any of his representatives approached BlackRock about any such investment.”
Parnell demanded Financial Times retract the report, but did not provide direct evidence that the report was false.
“Secretary Hegseth and the Department of War remain unwavering in their commitment to the highest standards of ethics and strict adherence to all applicable laws and regulations,” he wrote.
This report comes amongst other concerns that insiders within the Trump administration are profiting off of unreleased information in futures trading on platforms like Polymarket. Over half a billion dollars flooded the oil futures markets in the minutes before President Trump announced he would pause attacks on Iranian oil fields March 23.
“All federal employees are subject to government ethics guidelines that prohibit the use of nonpublic information for financial benefit,” White House spokesman Kush Desai said.
