Does the SEC Care Whether Hegseth Is Killing Iranians To Get Rich?

Senator Elizabeth Warren has requested an insider-trading probe of the defense secretary.

Last month, I considered whether Defense Secretary Pete Hegseth used what he knew about the imminence of the Iran war to expand his stock portfolio with a little blood money (“Is Pete Hegseth Killing Iranians To Get Rich?”). That was the thrust of a shocking Financial Times report, based on three anonymous sources, that said Hegseth’s Morgan Stanley broker approached Black Rock in February about making a “multimillion-dollar investment in the asset manager’s Defense Industrials Active ETF.” An ETF, or Exchange-Traded Fund, is a financial instrument comprised of multiple stocks and/or bonds that are bundled together and sold as a single stock. 

According to the FT, Hegseth’s broker’s request was flagged internally at Black Rock, presumably because it so obviously threatened to trigger an insider-trading investigation. (I’m guessing the FT’s three sources all worked at Black Rock.) Ultimately, Black Rock denied the request on the technicality that its Defense Industrials Active ETF was not yet available to Morgan Stanley clients. Whether Hegseth found some other way to profit from the Iran war remains an open question. (A Pentagon spokesperson called the FT report “entirely false and fabricated” and denied that Hegseth or any Hegseth representative approached Black Rock.)

This is a matter that demands immediate investigation by the Securities and Exchange Commission, and this morning Senator Elizabeth Warren, Democrat of Massachusetts, sent SEC chair Paul Atkins a letter requesting him to do just that.

It says a lot about our current scandal-rich environment that the FT story hasn’t dominated the news these past three weeks. But congressional Democrats certainly didn’t forget it. The day after the story broke, the House Committee on Government and Oversight Reform’s ranking member, Rep. Robert Garcia of California, and the ranking member of its Subcommittee on Military and Foreign Affairs, Rep. Suhas Subramanyam of Virginia, sent Hegseth a letter instructing him to preserve “all documents, records, and communications” on his financial transactions back to November 1, 2024. Regrettably, no investigation by their committee is likely, because its chair, James Comer of Kentucky, is perhaps the most shamelessly partisan hack in the entire Republican House majority. As I write, Comer is trying to justify Pam Bondi’s evading a committee subpoena in its Jeffrey Epstein investigation despite the fact he previously voted to hold the Clintons in contempt for defying committee subpoenas in the same investigation. 

Two days after the FT story broke, Senator Elizabeth Warren of Massachusetts and three other Democratic members of........

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