According to multiple sources, a broker for U.S. Defense Secretary Pete Hegseth allegedly attempted to invest in major defense funds ahead of the war in Iran. The Financial Times, citing three people familiar with the matter, reported that Hegseth's Morgan Stanley broker contacted BlackRock in February to make a multi-million dollar investment in its Defense Industrials Active fund.
Key Takeaways
A report claims Pete Hegseth's broker attempted to invest in defense funds before Iran war. The Pentagon denies allegations.
- Financial Times reports broker contacted BlackRock for investment
- Investment did not go through due to fund availability
- Pentagon calls report false and demands retraction
- Defense Industrials Active ETF fell 13% since Iran strikes began
The Pentagon has strongly denied these allegations. Chief Pentagon spokesperson Sean Parnell called the report "entirely false and fabricated" and demanded a retraction from the Financial Times. The Department of Defense representatives stated that neither Hegseth nor any of his representatives approached BlackRock about such an investment.
The Defense Industrials Active fund, which includes holdings from defense corporations like Northrop Grumman and Lockheed Martin, was reportedly unavailable to Morgan Stanley clients at the time. It is unclear whether Hegseth's broker pursued other defense-related investments. The fund has since fallen nearly 13% since the U.S. and Israel launched strikes on Iran on February 28.
This report comes amidst broader scrutiny of insider trading within the Trump administration, with concerns that figures with insider knowledge may be profiting from well-timed trades in financial and prediction markets. The Financial Times stands by its reporting and has included a Pentagon spokesperson's response in the article.
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