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U.S. Secretary of Defense Pete Hegseth holds a briefing with Chairman of the Joint Chiefs of Staff General Dan Caine, amid the U.S.-Israeli war on Iran, at the Pentagon in Washington, D.C., U.S., March 19, 2026.
Evan Vucci | Reuters
A broker for U.S. Defense Secretary Pete Hegseth sought to make a large investment in major defense companies in the lead up to the Iran war, according to the Financial Times. The Pentagon has denied the report.
The Financial Times reported Tuesday that Hegseth's broker at banking giant Morgan Stanley contacted BlackRock in February about making a multimillion-dollar investment in its iShares Defense Industrials Active ETF.
The ETF, which has about $3.1 billion in assets, counts companies such as RTX Corp, — formerly known as Raytheon — Lockheed Martin and Northrop Grumman among its largest holdings, Blackrock data showed.
The Defense Industrials Active ETF has lost 12.4% in the past one month, about the time when the Iran war started, according to LSEG data.
The FT also said that the investment discussed by Hegseth's broker did not ultimately go ahead as the fund was not yet available for Morgan Stanley clients to buy at the time. It was also not known if the broker had found another defense-related investment.
Pentagon chief spokesperson Sean Parnell dismissed the FT report in a post on X, calling it "entirely false and fabricated," and demanding the FT retract the article.
Parnell said that neither Hegseth nor any of his representatives approached BlackRock about any such investment. "This is yet another baseless, dishonest smear designed to mislead the public," he added.
The U.S. war against Iran has stretched into its fifth week, and the conflict does not seem to show any sign of abating.
U.S. Marines have arrived in the region, with the Washington Post reporting that the Pentagon was "preparing for weeks of ground operations in Iran."
Trump on Monday had also said that the U.S. will "completely" obliterate Iran's electric generating plants, oil wells and Kharg Island if the strategically vital Strait of Hormuz is not "immediately" reopened and a peace deal is not reached "shortly."
