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A report alleging that a broker for U.S. Defense Secretary Pete Hegseth attempted to invest in defence companies ahead of military action against Iran has drawn scrutiny, even as the Pentagon rejected the claims as false and fabricated.
Alleged Investment Attempt Before Military Action
According to a Financial Times report published on March 30, 2026, a broker acting for Mr. Hegseth sought to make a significant investment in major defence companies in the weeks leading up to the U.S.-Israeli attack on Iran. The report cited three people familiar with the matter.
It said the broker at Morgan Stanley contacted BlackRock in February regarding a multimillion-dollar investment in the asset manager’s Defence Industrials Active ETF. The outreach came shortly before the United States launched military action against Tehran.
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Pentagon Rejects Report as Incorrect
The Pentagon said the report was inaccurate and called for a retraction. “This allegation is entirely false and fabricated,” chief Pentagon spokesman Sean Parnell said on X.
The report also noted that the proposed investment did not proceed, as the fund, launched in May last year, was not yet available for Morgan Stanley clients to purchase.
Scrutiny Over Market Activity
The development comes amid broader scrutiny of trades in financial and prediction markets ahead of major policy decisions by U.S. President Donald Trump.
Some of these decisions were preceded by well-timed bets, prompting experts to question whether information may have been leaked in advance. The report did not clarify how much discretion the broker had in making investment decisions on Mr. Hegseth’s behalf, or whether he was aware of the broker’s actions.
