Defense Secretary Pete Hegseth sold off nearly two dozen stocks before President Donald Trump's tariff announcement sent the stock market into a tailspin, according to new disclosure reports.
Hegseth reported selling between $100,000 and $550,000 in stocks on March 24, nine days before "Liberation Day," and those 23 stocks included Amazon, Apple, Lowe's, Walmart and other companies that lost value after the tariff announcement – and ethics experts took notice, reported NOTUS.
“An appearance of wrongdoing, an appearance of insider trading, or the appearance that people are more focused on their stock portfolio than working on behalf of the American public is just as bad as if a violation actually occurred, because our system relies on the public being able to trust our leaders and trust in the system,” said Delaney Marsco, ethics director at Campaign Legal Center.
NOTUS has previously reported that numerous officials and lawmakers made advantageous stock trades ahead of Trump's announcement, but another ethics expert said Hegseth should have sold off his stocks before taking over as defense secretary.
“I don’t see anything in the stock sales or his ethics agreement that would suggest that he took advantage of information he received as a cabinet officer in executing the stock sales,” said John Pelissero, director of government ethics at the Markkula Center for Applied Ethics at Santa Clara University. “To remove the appearance of an ethical issue — that he made individual stock trades while serving as SECDEF and the information that comes with that position — he could have sold those stocks before becoming a cabinet officer.”
Hegseth sold five stocks, including defense contractors Northrop Grumman, Lockheed Martin and Honeywell, before he was confirmed as defense secretary in early February, according to the report, and the sold stocks were reported as assets owned by his wife in a financial report he submitted late last year as a nominee.
His signed ethics agreement did not list plans to divest from any specific stocks, and his ethics compliance certification responds to questions about stock divesture with "N/A."
“When high-level officials are engaging in stock trading, it is raising questions in the mind of the public as to, ‘What did they know in that cabinet meeting?’” said Cynthia Brown, senior ethics counsel at Citizens for Responsibility and Ethics in Washington. “Those are the concerns that come up when people who have the ability to influence policy at the highest levels, in ways that can affect the markets, are engaging in these kinds of trades during times where we know the markets are fluctuating significantly.”
However, an ethics expert said Hegseth's recently reported transactions could be an attempt to avoid the appearance of a conflict of interest and sell off stocks to his advantage before Trump crashed the markets with the tariff announcement.
“You might accelerate an implementation of a strategy if you have a notion that it might be better to move sooner rather than later,” said Revolving Door Project founder Jeff Hauser. “The direction may have been predetermined, the timing could have been influenced.”