Pete Hegseth was pushing hardest for the Iran war, and his broker allegedly tried to invest millions in defense contractors before it started

The Pentagon is demanding an immediate retraction of a report claiming that Secretary of Defense Pete Hegseth’s broker tried to make a multimillion-dollar investment in defense companies just before the war with Iran began. The report says a wealth manager working for Hegseth reached out to BlackRock about a large investment in a defense fund in the weeks before the first US strike on Iran on February 28.

Hegseth’s broker was reportedly looking to put millions into BlackRock’s iShares Defense Industrials Active ETF, also known as IDEF. BlackRock launched this fund in May 2025, and it mainly invests in global defense, aerospace, and security companies. Many of the companies in the fund count the Department of Defense as one of their top customers.

Sources cited by a financial publication said the inquiry was made on behalf of a “high-profile potential client” and was “flagged internally at BlackRock.” However, the investment never went through because the fund was too new and not yet available to Morgan Stanley’s clients at the time, the Financial Times reported.

The Pentagon called the report completely false, but BlackRock and Morgan Stanley have stayed silent

Pentagon spokesman Sean Parnell quickly pushed back against the claims, posting a statement on social media demanding an “immediate” retraction. He called the allegation “entirely false and fabricated” and described it as “yet another baseless, dishonest smear designed to mislead the public.”

Parnell added that Hegseth and his department “remain unwavering in their commitment to the highest standards of ethics and strict adherence to all applicable laws and regulations.” Despite the Pentagon’s strong response, BlackRock, Morgan Stanley, and Hegseth himself have not made any direct comments on the matter. This comes at a time when Hegseth’s decisions at the Pentagon have already been drawing serious public scrutiny.

This report also comes as financial trades made just before major policy decisions by the Trump administration have faced growing scrutiny. On March 23, President Trump publicly credited Hegseth for pushing for military action against Iran, saying, “And Pete, I think you were the first one to speak up.” 

“And you said, ‘Let’s do it, because you can’t let them have a nuclear weapon,’” he said. “So, we are now having really good discussions. They started last night, uh, little bit the night before that. And uh, I think they’re, you know, I think they’re very good. They want peace to– they’ve agreed they will not have a nuclear weapon, you know etc., etc., but we’ll see. You have to get it done. But I would say there’s a very good chance.”

Before becoming Secretary of Defense, Hegseth earned $4.6 million over two years working at a major news network, plus an additional $1 million from speaking engagements. This shows he had the financial means to consider a large investment of the kind described in the report. Those interested in how Hegseth’s Iran stance has shifted will find that his position on the conflict has continued to evolve.

As for the IDEF fund itself, it has risen more than 25 percent over the past year, but has actually fallen nearly 13 percent since the US and its allies launched strikes on Iran on February 28. This means that even if the investment had gone through, Hegseth would not have made money on it in the month since the war started. The claims in the report remain unconfirmed by independent sources.