Iran bought millions of dollars in military stocks before the war? Media reveals US defense secretary's "insider trading."

The agent of U.S. Secretary of Defense Pete Hegseth attempted to make large-scale investments in major defense companies weeks before the U.S. and Israel launched attacks on Iran.

According to the latest report by the Financial Times, three informed sources revealed that in February this year, just before the U.S. took military action against Iran, Hegseth’s agent at Morgan Stanley contacted asset management giant BlackRock to discuss investing millions of dollars in its Defense Industrials Active ETF (IDEF Fund).

Insiders said that, due to the involvement of a prominent potential client, this inquiry caused alarm within BlackRock. Currently, BlackRock, Morgan Stanley, and the Pentagon have all declined to comment. Although the deal ultimately fell through, the fact that the Secretary of Defense’s account attempted to heavily invest in defense stocks while planning a large-scale military operation is bound to stir controversy.

Investment failed: Platform restrictions led to unexpected "hedging"

The multi-million dollar investment ultimately did not go through. The reason was that this ETF, launched only last May, was not yet open for purchase by Morgan Stanley’s clients at that time.

Although ETFs are designed to be traded as easily as stocks, since there are over 14,000 ETFs in the market, most major brokerage and trading platforms only offer a portion of them.

It remains unclear whether Hegseth’s agent subsequently found another defense-focused alternative fund to invest in.

Interestingly, the failed deal actually helped Hegseth avoid short-term losses. The Nasdaq-listed IDEF fund rose 28% over the past year but did not climb due to the Middle East war; in fact, it fell nearly 13% over the last month.

Conflict of Interest Focus: Heavy weighting in Pentagon contractors

BlackRock’s information shows that the $3.2 billion IDEF fund aims to “seek growth opportunities by investing in companies that may benefit from increased government defense and security spending amid geopolitical fragmentation and intensified economic competition.”

The fund’s largest holdings include defense enterprise groups such as RTX, Lockheed Martin, and Northrop Grumman. Notably, the largest client of these companies is the U.S. Department of Defense. Data integration specialist Palantir is also among its top holdings.

Hegseth is one of the main architects of the war against Iran. He is also one of the most outspoken advocates of action against Iran in the Trump administration, often boasting about U.S. military strength. U.S. President Donald Trump once stated that this former Fox News television personality was the first in his national security circle to push for war.

Financial status exposed: High salary and frequent trades

Hegseth’s financial situation has also come to light through disclosure forms he submitted for Senate confirmation hearings.

During his tenure at Fox News (2022 to 2024), Hegseth earned a salary of $4.6 million. In addition, he received advances totaling nearly $500,000 for two books, with royalties for each ranging from $100,000 to $1 million. His speech income was also close to $900,000.

The latest financial disclosure released in June 2025 shows that the Secretary of Defense sold shares of 29 different companies, each transaction ranging from $1,001 to $50,000.

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