BlackRock, State Street Corporation, and Vanguard Group have been sued by Texas Attorney General Ken Paxton “for conspiring to artificially constrict the market for coal through anti-competitive trade practices”.
According to a statement from the attorney general’s office, a coalition of 10 other states have joined him in the lawsuit, filed on 27 November. Other plaintiffs include the attorney generals of Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia, and Wyoming.
“Over several years, the three asset managers acquired substantial stockholdings in every significant publicly held coal producer in the United States, thereby gaining the power to control the policies of the coal companies,” the statement said.
“Using their combined influence over the coal market, the investment cartel collectively announced in 2021 their commitment to weaponise their shares to pressure the coal companies to accommodate ‘green energy’ goals. To achieve this, the investment companies pushed to reduce coal output by more than half by 2030.”
The statement claims that Blackrock, Vanguard, and State Street utilised the Climate Action 100 and the Net Zero Asset Managers Initiative to “signal their mutual intent to reduce the output of thermal coal, which predictably increased the cost of electricity for Americans across the United States”.
It also states that BlackRock, State Street and Vanguard “deceived thousands of investors” who elected to invest in non-ESG funds.
“Yet these funds pursued ESG strategies notwithstanding the defendants’ representations to the contrary.
“Deliberately and artificially constricting supply increased prices and enabled the investment companies to produce extraordinary revenue gains. This conspiracy violated multiple federal laws that prevent a major shareholder, or a group of shareholders, from using their shares to lessen competition or engaging in other anti-competitive schemes.”
Moreover, the filing accuses the companies of breaking Texas antitrust and deceptive trade practices laws.
“Texas will not tolerate the illegal weaponisation of the financial industry in service of a destructive, politicised ‘environmental’ agenda. BlackRock, Vanguard, and State Street formed a cartel to rig the coal market, artificially reduce the energy supply, and raise prices,” Attorney General Paxton said.
“Their conspiracy has harmed American energy production and hurt consumers. This is a stunning violation of state and federal law.”
