A broker for US Defense Secretary Pete Hegseth attempted to make a big investment in major defense companies in the weeks leading up to the US-Israeli attack on Iran, the Financial Times reported on Monday, citing three people familiar with the matter.

Chief Pentagon spokesman Sean Parnell said on X that the story was "entirely false and fabricated" and demanded a retraction.

The FT report said Hegseth's Morgan Stanley broker contacted BlackRock in February about making a multimillion-dollar investment in the asset manager's Defense Industrials Active ETF, shortly before the US launched military action against Tehran.

According to the FT report, the investment discussed by Hegseth’s broker ultimately did not go ahead because the fund, which launched in May last year, was not yet available for Morgan Stanley clients to buy.

The FT report did not say how much discretion the broker had to make investments on Hegseth's behalf, or whether Hegseth knew what the broker was doing.

"Neither Secretary Hegseth nor any of his representatives approached BlackRock about any such investment," Parnell said.

BlackRock declined to comment on the report, while Morgan Stanley did not immediately respond to Reuters' request for comment.

The report on the investment attempt comes amid broader scrutiny of trades in financial and prediction markets ahead of US President Donald Trump's major policy decisions.

Some of these decisions have been preceded by well-timed bets, prompting some experts to question whether information had leaked ahead of time.