Pete Hegseth's broker at Morgan Stanley approached BlackRock in February about investing millions in the Defense Industrials Active ETF before the US attack on Iran, according to sources familiar with the matter. The inquiry, flagged internally at BlackRock, came as Hegseth served as a chief architect of the military campaign against Tehran.

The Defense Industrials Active ETF, which holds major contractors like Lockheed Martin, RTX, and Northrop Grumman, was not yet available to Morgan Stanley clients when the inquiry occurred. While the investment never materialized, the timing raises questions about potential conflicts of interest. The $3.2 billion fund has returned 28% over the past year despite recent volatility.

Hegseth, who earned $4.6 million at Fox News from 2022-2024, has been a vocal advocate for military action against Iran. His financial disclosure showed stock sales in 29 companies worth up to $50,000 each. The aborted approach to BlackRock comes amid heightened scrutiny of financial trades made ahead of Trump administration decisions, particularly given Hegseth's prominent role in shaping US military strategy.