Texas Leads Antitrust Suit Against Asset Managers

Texas, alongside 10 other Republican-led states, has filed a high-profile antitrust lawsuit against BlackRock, Vanguard, and State Street, alleging that the asset managers conspired to reduce coal production and inflate electricity prices. The lawsuit accuses these firms of using their substantial stockholdings and influence in coal companies to advance climate-focused agendas, thereby artificially constraining the coal supply and driving up energy costs. The states claim that the firms have violated federal and state antitrust laws, as their actions have resulted in cartel-level profits and harmed consumers by increasing energy prices. Texas Attorney General Ken Paxton emphasized that such 'illegal weaponization' of the financial industry for political ends will not be tolerated, suggesting that competitive markets, not external asset managers, should dictate electricity prices. BlackRock has dismissed the lawsuit's claims as baseless, asserting that their investments are client-focused and regularly reviewed by regulators. This lawsuit highlights ongoing tensions over the role of environmental, social, and governance (ESG) considerations in investment strategies.