Eleven Republican states are suing financial entities BlackRock, Vanguard, and State Street for “illegally conspiring to manipulate energy markets,” Texas Attorney General Ken Paxton announced.
“Texas will not tolerate the illegal weaponization of the financial industry in service of a destructive, politicized ‘environmental’ agenda. BlackRock, Vanguard, and State Street formed a cartel to rig the coal market, artificially reduce the energy supply, and raise prices,” Paxton said. “Their conspiracy has harmed American energy production and hurt consumers. This is a stunning violation of State and federal law.”
Ten other states joined Paxton: Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia, and Wyoming.
According to the complaint, each financial entity has a significant stake in multiple coal companies. The lawsuit alleges that the firms have an “output-reduction syndicate” that led to “supra-competitive profits for themselves and their portfolios,” violating state antitrust laws and Section 1 of the Sherman Act.
“Defendants have publicly defended their anticompetitive scheme with appeals to environmental stewardship,” the filing adds.
The Republicans assert that BlackRock “actively deceiv[ed] investors about the nature of its funds. Rather than inform investors that it would use their shareholdings to advance climate goals, BlackRock consistently and uniformly represented its non-ESG funds would be dedicated solely to enhancing shareholder value.”
A press release for the lawsuit explains: “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. Using their combined influence over the coal market, the investment cartel collectively announced in 2021 their commitment to weaponize 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.”
“Blackrock, Vanguard, and State Street utilized 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,” the release continues.
