Overview
- Democratic senators sent Pete Hegseth a letter seeking answers on a report that his Morgan Stanley broker tried to buy a BlackRock defense fund before U.S. strikes on Iran, with a response due by April 15.
- The Pentagon called the Financial Times story entirely false and demanded a retraction, while ABC News says it has not independently confirmed the report and BlackRock and Morgan Stanley declined to comment.
- The Financial Times reported the broker asked BlackRock about a multimillion-dollar purchase of its Defense Industrials Active ETF, and that the trade did not proceed because the fund was not yet available on Morgan Stanley’s platform.
- Defense Department rules and Hegseth’s ethics agreement bar him from owning stock in the largest Pentagon contractors, many of which are in the ETF, and federal guidance warns that single‑sector funds can create conflicts for senior officials.
- House Democrats opened a parallel review and requested records, and any confirmed trades by executive branch officials would also face a 45‑day disclosure requirement, leaving the allegations unresolved pending documents and answers.