The Financial Times has just revealed that an intermediary acting on behalf of the American Secretary of Defense, Pete Hegseth, attempted to invest capital in the military-industrial sector. This move took place shortly before the American-Israeli offensive against Tehran, raising suspicions of insider trading.
Pentagon spokesman Sean Parnell labelled these allegations as “completely false and fabricated”. He demands an immediate retraction from the British newspaper. The Secretary of Defense denies any contact with BlackRock through his representatives.
The attempt was focused on BlackRock’s Defense Industrials Active ETF. This fund, launched in May 2025, comprises the major military-industrial stocks. The investment didn’t go through due to technical compliance issues at Morgan Stanley.
This incident occurs amidst increased scrutiny of financial transactions preceding Donald Trump’s decisions. Several well-synchronized capital movements were observed before major political announcements. Experts question potential leaks of privileged information at the state level.
BlackRock declined to comment on these reports. Morgan Stanley also did not respond to Reuters’ inquiries. Uncertainty remains regarding the level of information the broker had to act on behalf of Pete Hegseth.
US regulations impose strict restrictions on cabinet members’ investments. A direct investment in a sector related to ministerial responsibilities poses a major ethical risk.
The Financial Times article does not specify if the Secretary of Defense was aware of his broker’s actions. Rumors of information leaks now affect the credibility of military decisions. The White House has not yet issued an official statement on this financial aspect.
Prediction markets showed 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 top officials.
The Trump administration faces criticism on handling conflicts of interest. The links between business circles and national security officials are under scrutiny by Congress. This new controversy could weaken the Secretary of Defense’s position during upcoming budget hearings.
Sean Parnell’s denial underlines the tension between the Pentagon and the financial press. The spokesperson emphasizes the complete lack of basis for the FT investigation. Checking the communication logs between Morgan Stanley and BlackRock will be crucial for the investigation’s progress.
The outcome of this controversy depends on the transparency of the Secretary’s account records. So far, no tangible evidence of a valid purchase order has been produced. The defense sector, however, remains under close stock market surveillance due to the instability in the Middle East.
