Overview
- Financial Times reported that a Morgan Stanley broker, said to be acting for Defense Secretary Pete Hegseth, asked BlackRock in February about putting millions into its iShares Defense Industrials Active ETF.
- Pentagon spokesperson Sean Parnell, who posted a denial Monday, called the story “entirely false and fabricated” and demanded an immediate retraction.
- The proposed purchase did not happen because the ETF was not available on Morgan Stanley’s platform at the time, a common issue since brokerages do not list every fund on the market.
- The FT relied on three unnamed sources, did not establish whether Hegseth knew of the inquiry, and there is no public evidence he profited or that insider trading occurred.
- BlackRock’s IDEF is a roughly $3.1–$3.2 billion fund holding major contractors such as RTX, Lockheed Martin, Northrop Grumman, and Palantir, and it has fallen about 12–13% since the war began, even as the episode feeds wider focus on pre-decision trading and prediction markets.