‘BlackRock, Vanguard, and State Street formed a cartel to rig the coal market,’ Texas Attorney General Ken Paxton alleged.
Eleven state attorneys general, led by Texas Attorney General Ken Paxton, have filed an anti-trust suit against the world’s three largest asset managers—BlackRock, Vanguard, and State Street.
The suit alleges that the asset managers, which together control nearly $25 trillion in third-party investors’ money, have acted in unison against the coal industry in pursuit of climate-related CO2 reduction goals.
“BlackRock, Vanguard, and State Street formed a cartel to rig the coal market, artificially reduce the energy supply, and raise prices,” Paxton said in a Nov. 27 statement. “Their conspiracy has harmed American energy production and hurt consumers.”
According to a 2020 study by the American Liberties Project, the “Big Three” asset managers, taken together, are the largest shareholders in 88 percent of the companies listed in the S&P 500 index. This gives them tremendous power when it comes to corporate proxy voting on behalf of investors in their funds, and they have sparked controversy in recent years over what critics say is their leveraging of this power to achieve environmental and social goals.
BlackRock is the largest of the three, with approximately $11 trillion under its management. By comparison, America’s entire GDP was $27 trillion at the end of 2023, according to the World Bank.
The text of the lawsuit alleges that “for the past four years, America’s coal producers have been responding not to the price signals of the free market but to the commands of Larry Fink, BlackRock’s Chairman and CEO, and his fellow asset managers.”
Consequently, the supply of coal used to generate electricity has been “artificially depressed—and the price has skyrocketed,” the attorneys general said.
“Defendants [BlackRock, Vanguard, and State Street] have reaped the rewards of higher returns, higher fees, and higher profits, while American consumers have paid the price in higher utility bills and higher costs,” they alleged.
In response, BlackRock spokesperson Alexander Williams stated that his company has invested billions into Texas energy and that “the suggestion that BlackRock has invested money in companies with the goal of harming those companies is baseless and defies common sense.”
