A Morgan Stanley broker acting for the US Secretary of State contacted BlackRock in February to invest in an ETF specializing in defense sector stocks, a few weeks before the outbreak of the war with Iran. The Pentagon denounces a “false allegation.”
A broker acting for Pete Hegseth, the US Secretary of Defense, tried to place several million dollars in a BlackRock fund invested in large military sector companies just before the start of the war against Iran on February 28, according to the Financial Times, citing three sources. This request, made on behalf of a very high-ranking political figure, was internally reported at BlackRock.
The publication of this information comes as market movements are being closely scrutinized. Suspicions of insider trading swirl around the White House after unusual transactions, suggesting that some individuals with privileged information on ongoing military operations have profited from it.
In a statement, the Pentagon denies. BlackRock and Morgan Stanley did not comment.
“This allegation is completely false and fabricated. Neither Secretary Hegseth nor any of his representatives contacted BlackRock about such an investment,” said a spokesperson for the Department of Defense.
Specifically, this Morgan Stanley bank broker contacted BlackRock in February to invest in the ETF Defense Industrials Active, whose main assets are Lockheed Martin (the manufacturer of US fighter jets), Palantir, or Northrop Grumman. This investment project could not be completed. The placement in question was not yet available to Morgan Stanley clients, as specified by the Financial Times.
The British newspaper does not know if Pete Hegseth was able to invest in this ETF through another means. It would likely have been a bad investment since the fund in question dropped by almost 13% last month.
A series of suspicious transactions
On Monday, March 23, between 6:49 and 6:50 (New York time), a handful of traders took massive (580 million dollars) and unusual positions on the oil market just minutes before a surprise announcement by Donald Trump at 7:04 precipitated a drop in prices.
Other suspicious transactions were identified on the Polymarket platform, which allows betting on current events, a few hours before the US attack on Iran. Some were from newly created accounts that only focused on the Iranian issue, according to a previous Financial Times investigation.
A veteran of the wars in Iraq and Afghanistan, Pete Hegseth was a commentator for the conservative TV channel Fox News before being appointed US Secretary of Defense upon Donald Trump’s return to power, despite opposition from many American lawmakers, including members of the Republican Party. He has been one of the most vocal supporters of an offensive against Iran and has a major influence on operations.
A few weeks after taking the helm at the Pentagon, a journalist from The Atlantic media was mistakenly added to a conversation among top national security officials on the Signal messaging app. It revealed that Pete Hegseth was sharing classified defense information on private channels, risking compromising sensitive information and endangering American personnel.
