Largest investors in the world illegally conspired to manipulate energy markets, driving up consumer costs
For Immediate Release:
November 27, 2024
For press inquiries only, contact:
Amanda Priest (334) 322-5694
William Califf (334) 604-3230
(Montgomery, Ala.) – Alabama Attorney General Steve Marshall joined a multistate coalition suing BlackRock, State Street Corporation, and Vanguard Group, three of the largest institutional investors in the world, for conspiring to artificially depress output and increase the cost of coal through anticompetitive trade practices.
Over several years, the three asset managers acquired substantial stockholdings in every significant publicly held coal producer in the United States, thereby gaining the power to control the policies of the coal companies. Using their combined influence over the coal market, the investment cartel collectively announced in 2021 their commitment to weaponize their shares to pressure the coal companies to accommodate “green energy” goals. To achieve this, the investment companies pushed to reduce coal output by more than half by 2030.
“Americans think that when they entrust their hard-earned savings to Wall Street firms, those firms will seek profits, not radical environmental goals. But time and again, companies like BlackRock, State Street, and Vanguard invest as activists, not dispassionate fiduciaries,” stated Attorney General Marshall. “In this case, they found a way to line their own pockets while crippling the coal industry and raising energy prices for millions. This is greed masquerading as ‘environmental justice,’ and is precisely why we have antitrust laws.”
Blackrock, Vanguard, and State Street signed pledges like “Climate Action 100” and “Net Zero Asset Managers Initiative” to signal their mutual intent to reduce the output of thermal coal, which predictably increased the cost of electricity for Americans across the United States.
These firms also deceived thousands of investors who elected to invest in non-ESG funds to maximize their profits. Yet these funds pursued ESG strategies notwithstanding the defendants’ representations to the contrary.
Deliberately and artificially constricting supply increased prices and enabled the investment companies to produce extraordinary revenue gains. This conspiracy violated multiple federal laws that prevent a major shareholder, or a group of shareholders, from using their shares to lessen competition or engaging in other anticompetitive schemes. The companies also broke state antitrust and deceptive trade practices laws.
To read the filing, click here.
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