Morgan Stanley’s investment bank broker contacted BlackRock in February regarding an investment in the “Defense Industrials Active” fund, according to the Financial Times. Pentagon’s chief spokesperson, Sean Parnell, denied these reports.
A few weeks before the American-Israeli attack, the broker for US Defense Secretary Pete Hegseth allegedly tried to invest in major defense sector companies, according to the Financial Times citing three sources. Some see this attempt as a possible case of insider trading.
Pete Hegseth’s broker at Morgan Stanley’s investment bank contacted BlackRock in February about a multi-million dollar investment. It involved the ETF, “Defense Industrials Active,” a fund that includes major military industrial companies.
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“These allegations are entirely false”
However, the transaction did not go through due to technical compliance constraints within the bank. Pentagon’s chief spokesperson, Sean Parnell, strongly denied these allegations on X network, calling them “entirely false and fabricated,” and demanded a retraction from the British newspaper. He added: “Neither Secretary Hegseth nor any of his representatives approached BlackRock for such an investment.” At this point, the White House has not issued any official statements on this financial aspect. BlackRock, the company concerned by these reports, declined to comment. Furthermore, the article does not specify the extent to which the broker had authority to invest on behalf of Pete Hegseth, or whether the latter was informed of these actions.
More broadly, this revelation comes in a climate of increased vigilance around financial markets and prediction platforms, as major political decisions from the US administration approach. Several incidents have already shown unusually well-timed bets ahead of certain announcements, raising expert questions about potential information leaks. Indeed, a few days before the conflict, millions of dollars were wagered on attacks by the United States and Israel on Iran. The bet “Will the United States strike Iran by [date]?” became one of the largest in Polymarket’s history, with $529 million at stake, before being closed following the initial strikes.
