Pentagon Forcefully Rejects Allegations of Defence Secretary's Pre-War Investment Attempt
The Pentagon has issued a categorical denial of allegations that United States Defence Secretary Pete Hegseth attempted to orchestrate a substantial investment in major defence corporations in the weeks preceding the joint US-Israeli military offensive against Iran. These serious claims were originally published by the Financial Times, which cited three anonymous sources described as familiar with the matter.
Spokesman Labels Report as 'Entirely False and Fabricated'
Chief Pentagon spokesman Sean Parnell delivered a robust rebuttal, taking to the social media platform X to declare the story 'entirely false and fabricated'. Parnell demanded an immediate retraction from the publication. He stated unequivocally, 'Neither Secretary Hegseth nor any of his representatives approached BlackRock about any such investment.'
The detailed FT report alleged that Hegseth's broker at Morgan Stanley contacted the investment giant BlackRock in February. The contact reportedly concerned a multimillion-dollar investment into BlackRock's Defence Industrials Active ETF, a fund focused on defence industry stocks. This contact allegedly occurred shortly before the United States initiated military action against Tehran.
Reported Investment Did Not Proceed, Scrutiny on Market Timing Grows
According to the FT's account, the discussed investment ultimately did not proceed. The fund in question, which launched in May of the previous year, was reportedly not yet available for purchase by Morgan Stanley's clients at the time. The report did not clarify the level of discretion the broker possessed to make investments on Hegseth's behalf, nor did it confirm whether the Defence Secretary was aware of the broker's actions.
BlackRock declined to comment on the allegations when approached, while Morgan Stanley did not provide an immediate response to requests for comment from Reuters. This report emerges against a backdrop of heightened scrutiny regarding trades in financial and prediction markets that precede major US policy announcements. Experts have previously raised questions about potential information leaks, noting well-timed bets ahead of significant decisions by the Trump administration.
Regional Conflict Intensifies as Oil Prices Surge
The allegations surface amidst escalating violence in the region. A likely US strike hit the central Iranian city of Isfahan early Tuesday, producing a massive fireball. Isfahan is a significant site, home to facilities previously targeted and a likely storage location for Iran's highly enriched uranium. In retaliation, Tehran struck a fully loaded Kuwaiti oil tanker in the Persian Gulf.
These attacks underscore the intensity of the monthlong war launched by the US and Israel against Iran on February 28. The conflict has severely disrupted global energy markets. Iran's maintained chokehold on the Strait of Hormuz, a vital waterway for a fifth of the world's peacetime oil shipments, has driven prices upward. Combined with attacks on Gulf energy infrastructure, this has sent oil prices skyrocketing, roiling world markets.
Spot prices for Brent crude, the international benchmark, hovered around $107 per barrel in early trading, representing an increase of more than 45% since the war's inception. US President Donald Trump, who has publicly insisted on progress in diplomatic ceasefire talks, shared a video of the Isfahan attack showing fiery explosions lighting the night sky.
Casualties Mount and International Diplomacy Stirs
The human cost of the conflict continues to rise. Israel reported another four soldiers killed in its ongoing invasion of Lebanon, alongside two United Nations peacekeepers. These casualties prompted the UN Security Council to schedule an emergency session for later Tuesday.
In response to growing anger from Gulf Arab states, Iranian Foreign Minister Abbas Araghchi insisted on Tuesday that Tehran's military actions are solely targeting US forces. Meanwhile, several nations have reportedly encouraged Washington to continue the war until Iran's military capabilities are comprehensively destroyed.
