Texas Judge Rules Against Dismissing Lawsuit Against BlackRock, Vanguard, and State Street Over Alleged Coal Industry Manipulation Scheme.

A Texas federal court has ruled against dismissing a lawsuit against BlackRock, Vanguard Group, and State Street, alleging they engaged in anti-competitive behavior to manipulate the coal industry. The lawsuit claims the firms pressured coal companies to cut production, driving up electricity costs and increasing profits for the investment firms. The judge determined that most of the claims warrant further examination in court.

A Texas federal court has ruled against dismissing a lawsuit against BlackRock, Vanguard Group, and State Street, alleging they engaged in anti-competitive behavior to manipulate the coal industry. The lawsuit, brought by Republican attorneys general from Texas and several other states, claims the firms pressured coal companies to cut production, driving up electricity costs and increasing profits for the investment firms. The judge determined that most of the claims warrant further examination in court [1].

The lawsuit centers on the asset managers' involvement in climate-focused investment coalitions, which the plaintiffs argue functioned as a de facto cartel. The states allege that these firms leveraged their significant holdings to drive down coal output, thereby restricting competition in the energy sector. The case could reshape how major financial firms engage with environmental policy through their investments [1].

BlackRock, Vanguard, and State Street have denied the allegations, with BlackRock dismissing the lawsuit as "absurd" and stating that the claims are "not supported by the facts." State Street has warned that the case promotes a "new and dangerous antitrust theory" and could create unwarranted risk for both investors and energy markets. Vanguard has expressed disappointment in the ruling but emphasized its intent to "vigorously defend" against the allegations [1].

The legal action, spearheaded by Texas Attorney General Ken Paxton, accuses the asset managers of acting in concert to shape U.S. energy policy through coordinated investment strategies. Paxton heralded the judge’s ruling as a major development. In a statement, he accused the firms of forming "an investment cartel to illegally control national energy markets" [1].

As the case moves forward, it could have far-reaching implications for how asset managers align investment portfolios with environmental and social goals. The lawsuit touches on the growing tension between sustainable investing and regulatory scrutiny, particularly in Republican-led states critical of ESG (Environmental, Social, and Governance) strategies [1].

References:
[1] https://www.pymnts.com/cpi-posts/judge-allows-antitrust-suit-against-blackrock-vanguard-and-state-street-to-proceed/
[2] https://nypost.com/2025/08/01/business/larry-finks-blackrock-loses-bid-to-dismiss-texas-climate-collusion-claims/