Texas Files Lawsuit Against Major Investors for Market Manipulation in Coal Industry
Eleven states, spearheaded by Texas, have taken legal action against the three largest institutional investors globally. The lawsuit accuses BlackRock, Inc., State Street Corporation, and Vanguard Group, Inc. of colluding to purchase stocks of coal companies, manipulating the market, stifling competition, and violating antitrust laws at both federal and state levels.
The legal complaint, lodged in the U.S. District Court for the Eastern District of Texas Tyler Division, seeks a trial by jury. The defendants, managing a whopping $26 trillion in combined assets, have been accused of acquiring significant holdings in nearly every major publicly traded coal producer in the United States. This strategy allegedly granted them the power to influence the operational policies of these coal companies.
Texas Attorney General Ken Paxton emphasized the companies’ ownership percentages in various coal producers and asserted that, under the Biden administration, the free market’s pricing signals to coal producers have been replaced by directives from Larry Fink, BlackRock’s chairman and CEO, and other asset managers. This shift has led to a manipulation of coal supply, an increase in prices, and consequent financial burden on American consumers in the form of higher utility bills.
The lawsuit contends that the companies used their shares as a tool to drive a green energy agenda, including plans to reduce coal production substantially by the year 2030. This initiative saw publicly traded coal producers scaling back their output, resulting in a surge in energy prices. The legal battle also accuses the defendants of deceiving investors who opted for non-ESG (Environmental, Social, and Governance) funds to maximize their profits, despite adopting ESG strategies behind investors’ backs.
The lawsuit alleges violations of the Clayton Act and the Sherman Antitrust Act of 1890, along with state antitrust laws in Texas, Montana, and West Virginia. It also points fingers at BlackRock for purportedly breaching the Texas Business and Commerce Code through fraudulent actions.
The legal action requests the court to declare the defendants’ actions as violations of federal and state laws, impose injunctions, prevent repetitions of such behavior, and demand payment of civil fines. Attorney General Paxton, joined by counterparts from Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, West Virginia, and Wyoming, is leading the charge with legal representation from The Buzbee Law Firm and Cooper & Kirk.
So far, the accused companies have not issued a formal response to the lawsuit. This legal action follows Texas leading a previous lawsuit against the Biden administration over an ESG policy that could negatively impact the retirement savings of millions of Americans. Additionally, Texas has blacklisted numerous companies, including BlackRock, for promoting ESG and anti-oil and natural gas policies.
