The Financial Times has just revealed that an intermediary acting on behalf of US Defense Secretary, Pete Hegseth, attempted to invest in the military industrial sector. This move took place shortly before the American-Israeli offensive against Tehran, raising suspicions of insider trading.
Pentagon spokesperson, Sean Parnell, has dismissed these allegations as “completely false and fabricated”. He demands an immediate retraction from the British newspaper. The Defense Secretary denies any contact with BlackRock through his representatives.
The attempt was related to BlackRock’s Defense Industrials Active ETF. This fund, launched in May 2025, includes the major military industrial stocks. The investment did not go through due to technical compliance issues at Morgan Stanley.
This incident is part of increased surveillance of financial transactions preceding Donald Trump’s decisions. Several well-timed capital movements were observed before major political announcements. Experts question possible leaks of privileged information at the highest level of government.
BlackRock has declined to comment on these reports. Morgan Stanley has also not responded to Reuters’ inquiries. Uncertainty remains about the level of information the broker had to act on behalf of Pete Hegseth.
US regulatory framework imposes strict restrictions on cabinet members’ investments. Direct investment in a sector related to ministerial responsibilities poses a major ethical risk.
The Financial Times article does not specify if the Defense Secretary was aware of his broker’s actions. Rumors of information leaks now cast doubt on military decisions’ credibility. The White House has not yet issued an official statement on this financial aspect.
Prediction markets showed signs of unusual activity before the attack. These platforms allow betting on the outcome of geopolitical events. The Hegseth affair could accelerate the implementation of new compliance rules for senior officials.
The Trump administration faces a wave of criticism over conflict of interest management. The ties between business circles and national security officials are under scrutiny by Congress. This new controversy could weaken the Defense Secretary’s position during the upcoming budget hearings.
Sean Parnell’s denial on X highlights the tension between the Pentagon and the financial press. The spokesperson emphasizes the complete lack of basis for the FT investigation. Verifying communication logs between Morgan Stanley and BlackRock will be crucial for the investigation’s progression.
The outcome of this controversy will depend on the transparency of the Secretary’s account statements. For now, no concrete evidence of a valid purchase order has been produced. However, the defense sector remains under close stock market surveillance due to instability in the Middle East.
