Pentagon Chief Bars Staff From Trading On Military Secrets

Defense Secretary Pete Hegseth issued a directive on October 20 banning military personnel from using nonpublic information to trade on financial platforms.

The memo, titled "Do Not Compromise Military Operations for Personal Financial Gain," was distributed to senior Pentagon leaders and Combatant Command heads. CBS News published the document on October 22. Hegseth stated that when service members or civilians execute transactions tied to military outcomes, "they create a signal" that hostile intelligence services can exploit.

The order applies to all financial platforms, including traditional betting services and prediction markets such as Polymarket and Kalshi. Personnel are prohibited from making any financial transaction informed by nonpublic information, whether that data is classified or unclassified. Hegseth argued that these markets allow adversaries to aggregate data to anticipate American movements, targets, and timing.

The directive follows a specific criminal case from April of this year. A US Army soldier was arrested and charged with using confidential information to generate $410,000 in profits on Polymarket. The soldier bet on the timing of the military's capture of Venezuelan President Nicolás Maduro.

Broader concerns emerged from an August report by the Anti-Corruption Data Collective. The group identified 152 suspicious wallets that placed longshot bets on military and defense markets. Those wallets won a combined total of $8 million. Hegseth cited these findings to justify the new restrictions on department personnel.

The memo emphasizes that operational security relies on the enemy not knowing what is coming next. Hegseth wrote that service members "deserve a Force that protects them" rather than one that exposes them for personal gain. The directive aims to prevent financial stakes from compromising operational judgment and troop safety.