Before the United States launched military strikes against Iran, Defense Secretary Pete Hegseth's broker at Morgan Stanley contacted BlackRock about making a "multimillion-dollar investment" in BlackRock's Defense Industrials Active ETF — a fund that tracks weapons and military contractors, according to Reuters, citing a Financial Times report. The trade didn't go through because the fund wasn't yet available to Morgan Stanley clients.
The Financial Times didn't report how much discretion the broker had to act independently or whether Hegseth knew about the inquiry. Pentagon spokesman Sean Parnell called the story "entirely false and fabricated" and demanded a retraction. BlackRock declined to comment, and Morgan Stanley didn't respond.
Hegseth already has a history of mishandling sensitive military information. Earlier this year, he shared operational details about the Yemen bombing campaign in a Signal group chat that accidentally included a journalist. He was later removed from strategic decision-making on Iran by Trump himself.
The broker inquiry isn't the only suspiciously timed trade to surface in connection with Trump administration decisions. Earlier this month, unusual activity in prediction markets ahead of tariff announcements prompted calls for a federal investigation.
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