Stockholm (NordsIP) – In the latest effort ot undermine sustainable investments and the fight against climate change, the attorney generals from eleven states in the USA filed a lawsuit against BlackRock, Vanguard and State Street. The eleven State Attorneys General represent the states of Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, Nebraska, Texas, West Virginia and Wyoming. The lawsuit was filed in the United States District Court for the Eastern District of Texas, Tyles Division.
The Office of Ken Paxton, Attorney General for the State of Texas, accuses the three asset managers, of “conspiring to artificially constrict the market for coal through anticompetitive trade practices.”
“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. As demand for the electricity Americans need to heat their homes and power their businesses has gone up, the supply of the coal used to generate that electricity has been artificially depressed—and the price has skyrocketed. Defendants 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,” the introduction to the lawsuit reads.
According to the lawsuit, the actions of the three asset managers “pose a substantial threat to competition”, that they “agreed to a strategy to reduce [coal] output” and that they “used the stock they acquierd to reduce competition in the relevant coal markets”. Moreover, the lawsuit argues that the asset managers’ participation in Climate Action 100+ and in the Net Zero Asset Managers Initiative is “compelling evidence of the defendants’ collusion “to seek coordinated reductions in coal production”. The lawsuit claims that the pressure applied by these three asset managers “on the coal companies’ management resulted in output reduction and climate disclosures”, that their “acquisition of the stock substantially lessened competition” and that they used their shares in a way that “resulted in coal production being reduced in response to rising prices, resulting in cartel-level revenues and profits”.
“Texas will not tolerate the illegal weaponization of the financial find industry in service of a destructive, politicized ‘environmental’ agenda. BlackRock, Vanguard, and State Street formed a cartel to rig the coal market, artificially reduce the energy supply, and raise prices,” said Attorney General Paxton. “Their conspiracy has harmed American energy production and hurt consumers. This is a stunning violation of State and federal law,” the press release from the Attorney General for the State of Texas concludes.
