Texas Lawsuit: Major Investors Accused of Market Manipulation in Coal Industry
Eleven states, with Texas at the helm, are taking legal action against the world’s three largest institutional investors. The lawsuit, filed in U.S. District Court for the Eastern District of Texas Tyler Division, accuses BlackRock, Inc., State Street Corporation, and Vanguard Group, Inc. of colluding to purchase stocks of coal companies in what is believed to be a bid to manipulate the market, stifle competition, and breach federal and state antitrust laws.
Combined, these three giants manage over $26 trillion in assets. The lawsuit hinges on claims that they amassed significant holdings in major publicly traded coal producers in the United States, thereby gaining undue influence over the companies’ policies.
Texas Attorney General Ken Paxton emphasized the defendants’ ownership in companies like Peabody Energy, NACCO Industries, and Vistra Energy, and their ability to dictate coal production practices. Allegations suggest that these actions drove up energy costs for consumers, all to further their green energy agenda.
Under the recent administration, the lawsuit asserts that energy prices surged due to redirected coal production strategies influenced by these institutional investors. The defendants are accused of wielding their shares to push for environmental initiatives, which in turn impacted electricity prices across America.
By leveraging initiatives like the Climate Action 100 and Net Zero Asset Managers Initiative, these companies allegedly collaborated to slash thermal coal production, leading to substantial increases in electricity costs. Moreover, they supposedly misled investors who opted for non-ESG funds, diverting them towards ESG strategies against their wishes.
Claiming that these actions violated various antitrust laws, the lawsuit is demanding injunctive relief, civil fines, and a court order to bar such practices in the future. Texas Attorney General Paxton strongly condemned these alleged tactics as a threat to American energy independence and consumer welfare.
Moreover, Texas has been actively involving itself in environmental and energy matters, notably listing several companies, including Blackrock, on its divestment list due to their alignment with ESG and anti-oil and natural gas policies.
Joining the state of Texas in the lawsuit are attorneys general from Alabama, Arkansas, Indiana, Iowa, and others. While the accused companies have not yet responded to the allegations, the legal battle is just beginning.
