The Pentagon is denying a potentially volatile report about Pete Hegseth's finances. The Financial Times on Monday reported that a broker for the defense chief tried to make a multi-million-dollar investment in major defense companies just ahead of the Iran war. Hegseth's broker at Morgan Stanley reached out to BlackRock about making an investment in its Defense Industrials Active ETF in the weeks leading up to the war, according to the FT story. The investment never went through because the year-old ETF wasn't yet available to Morgan Stanley customers, says the story, adding that the request had been flagged internally at BlackRock.
Pentagon spokesperson Sean Parnell called the report "entirely false and fabricated" in a post on X and demanded a retraction, notes CNBC. He said that neither Hegseth nor any of his representatives approached BlackRock about any such investment. "This is yet another baseless, dishonest smear designed to mislead the public." The fund, which holds major contractors such as RTX, Lockheed Martin, Northrop Grumman, and Palantir, is up 28% over the past year but has dropped nearly 13% in the past month.
Even without a completed trade, the timing is likely to draw scrutiny from ethics watchdogs and Wall Street analysts already poring over market activity before major Trump administration moves, according to the FT. The story didn't specify how much leeway the broker had to act on Hegseth's behalf, per Reuters.
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