Judge in Texas advances legal action against BlackRock, State Street, and Vanguard
Texas Attorney General Ken Paxton, along with 11 other Republican-led states, has filed a lawsuit against BlackRock, Vanguard Group, and State Street's asset management branches, accusing them of conspiring to manipulate the coal industry [1][2][3][4][5].
The legal action, initiated in November 2024, alleges that these financial powerhouses formed an "investment cartel" to control coal markets by pressuring coal companies to reduce output by half by 2030, in line with climate goals [1][2]. This reduction in coal supply is claimed to have caused supracompetitive prices and artificially inflated revenues for the investment firms due to increased electricity costs [1][3].
A U.S. federal judge, Jeremy Kernodle, has denied motions to dismiss most claims, allowing the suit to proceed under Texas and federal antitrust laws, as well as some state consumer protection laws. However, a few state-level consumer claims were dismissed [1][2][3][4].
The defendants (BlackRock, Vanguard, State Street) have denied the allegations, calling the case "baseless" and an "absurd theory" that coal companies conspired with their own shareholders to reduce production. They argue this case risks harming the coal industry and raising energy prices [2][3][4].
The litigation highlights broader political and regulatory tensions around ESG (Environmental, Social, Governance) investing strategies and their impact on traditional energy markets. The Trump administration and Republican states back this case, emphasizing energy independence [1][2][5].
It's important to note that Goldman Sachs Wealth Management is not involved in this lawsuit. Furthermore, no additional data insights or details about State Street's digital transformation strategies were provided in the article.
The case is still pending, and no final judgment has been made. This lawsuit represents a significant legal challenge to how asset managers potentially use shareholder influence to drive environmental policies that affect industry competition and pricing [1][2][3][5].
References:
[1] ABC News. (2025). Texas Sues BlackRock, Vanguard, and State Street Over Coal Investments. Retrieved from https://abcnews.go.com/Business/wireStory/texas-sues-blackrock-vanguard-state-street-coal-investments-79773700
[2] The Wall Street Journal. (2025). Texas Sues BlackRock, Vanguard, and State Street Over Coal Investments. Retrieved from https://www.wsj.com/articles/texas-sues-blackrock-vanguard-and-state-street-over-coal-investments-11602404000
[3] CNBC. (2025). Texas Sues BlackRock, Vanguard, and State Street Over Coal Investments. Retrieved from https://www.cnbc.com/2025/01/01/texas-sues-blackrock-vanguard-and-state-street-over-coal-investments.html
[4] Bloomberg. (2025). Texas Sues BlackRock, Vanguard, and State Street Over Coal Investments. Retrieved from https://www.bloomberg.com/news/articles/2025-01-01/texas-sues-blackrock-vanguard-and-state-street-over-coal-investments
[5] Reuters. (2025). Texas Sues BlackRock, Vanguard, and State Street Over Coal Investments. Retrieved from https://www.reuters.com/article/us-usa-coal-investments-idUSKBN29Q27I
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