In February, the personal broker for US Defense Secretary Pete Hegseth called BlackRock with a question: could he buy a multimillion-dollar stake in a defense-industry fund for his client?

Weeks later, the United States joined Israel in launching military strikes on Iran.

The Fund and the Timeline

BlackRock’s Defense Industrials Active ETF launched in May 2025. Its top holdings include RTX, Lockheed Martin, Northrop Grumman, and Palantir — companies whose biggest customer is the Pentagon, and whose share prices respond directly to the prospect of war.

According to the Financial Times, citing three people familiar with the matter, Hegseth’s broker at Morgan Stanley contacted BlackRock in February about investing millions in the fund. The inquiry was flagged internally at BlackRock.

The trade never executed. The ETF was not yet available for purchase through Morgan Stanley’s platform, the FT reported. BlackRock declined to comment, while Morgan Stanley and the Pentagon did not immediately respond to requests for comment from Reuters.

On February 28, US and Israeli forces killed Iranian Supreme Leader Ayatollah Ali Khamenei.

The FT report does not say whether Hegseth knew about the broker’s inquiry, or how much discretion the broker had to act on his behalf. That gap matters. But so does the sequence of dates.

What Insider-Trading Law Says

Federal ethics rules bar government employees from profiting from nonpublic information. Whether Hegseth’s broker crossed that line depends on what Hegseth knew, what he communicated, and whether the broker acted on direction or instinct.

“It looks deeply suspicious,” said Andrew Verstein, an insider-trading expert at UCLA School of Law, speaking about well-timed trades around Trump policy moves generally. He said the patterns were consistent with what “you would expect to see if there were informed trading by government officials and their friends.”

Aitan Goelman, a former CFTC enforcement director and federal prosecutor, said such trades would normally draw scrutiny. But the legal landscape is uneven. Insider trading bans in commodities and derivatives markets are relatively recent, and case law is thin.

White House spokesman Kush Desai said that “any implication that Administration officials are engaged in such activity without evidence is baseless and irresponsible.”

One Thread in a Larger Pattern

The Hegseth broker story is not an isolated data point. A Reuters review found at least four instances of well-timed trades ahead of major Trump administration decisions on tariffs, Venezuela, and Iran.

On February 28 — the day of the Khamenei strike — analytics firm Bubblemaps identified six Polymarket accounts that earned a combined $1.2 million from bets placed in the hours before the attack. The week of March 23, unidentified traders placed a $500 million oil-futures bet on the New York Mercantile Exchange minutes before Trump announced he was delaying strikes on Iranian energy assets, sending crude prices sharply lower, Reuters reported.

David Rosenfeld, former co-head of enforcement at the SEC’s New York office, said the size and binary nature of such bets suggested advance knowledge. “Those do raise a lot more suspicion that somebody has some specific inside information,” he said.

Regulatory capacity to investigate is limited. The SEC’s enforcement chief recently resigned. The CFTC has lost all enforcement attorneys in its Chicago office, according to Barron’s. Steve Sosnick, chief strategist at Interactive Brokers, said the patchwork of regulators would require “a high level of coordination” to investigate the trades. “We have seen no evidence that this is occurring,” he told Reuters.

The Trade That Didn’t Happen

None of this proves Pete Hegseth told his broker to buy defense stocks before a war he was helping plan. It doesn’t disprove it, either. What the timeline shows is that the defense secretary’s personal financial representative sought exposure to the weapons industry at precisely the moment his boss was preparing to generate demand for those weapons.

The trade failed — but only because of a logistical hurdle. Not because anyone asked whether it should happen at all.

Sources