Attorney General Ken Paxton has initiated legal action against BlackRock, State Street Corporation, and Vanguard Group. The lawsuit accuses these major institutional investors of conspiring to manipulate the coal market through anticompetitive practices, which allegedly increased energy costs for consumers.
The lawsuit claims that over several years, these asset managers acquired significant stockholdings in key publicly held coal producers in the United States. This acquisition allegedly allowed them to influence coal company policies. In 2021, the firms reportedly used their collective influence to push for a reduction in coal output by more than half by 2030 as part of their commitment to "green energy" goals.
BlackRock, Vanguard, and State Street are said to have utilized initiatives like Climate Action 100 and the Net Zero Asset Managers Initiative to coordinate efforts in reducing thermal coal output. This move purportedly led to increased electricity costs nationwide.
The lawsuit also alleges that these firms misled investors who chose non-ESG funds aimed at maximizing profits but were still subjected to ESG strategies contrary to what was represented. By constricting supply deliberately, prices rose, allowing these companies to achieve significant revenue gains.
According to Attorney General Paxton, this conspiracy violated federal laws designed to prevent major shareholders from engaging in anticompetitive activities. Additionally, it is claimed that Texas antitrust and deceptive trade practices laws were breached.
"Texas will not tolerate the illegal weaponization of the financial industry in service of a destructive, politicized ‘environmental’ agenda," stated Attorney General Paxton. "BlackRock, Vanguard, and State Street formed a cartel to rig the coal market, artificially reduce the energy supply, and raise prices."
A coalition of ten other states has joined Attorney General Paxton in this lawsuit. The Buzbee Law Firm and Cooper & Kirk are acting as outside counsel for this case.
To read the filing, click here.