A Texas federal court has ruled against dismissing a lawsuit that implicates several of the world’s leading asset management firms in an alleged scheme to manipulate the coal industry.  

US District Judge Jeremy Kernodle has determined that most of the claims, which suggest that BlackRock, Vanguard Group, and State Street’s asset management branch engaged in anti-competitive behaviour, warrant further examination in court. 

In the ruling, Kernodle said the states “have identified enough circumstantial evidence to suggest that defendants agreed to collectively pressure coal companies to reduce the output of coal in the relevant markets and disclose future output information.” 

The legal action, spearheaded by Attorney General Paxton in November 2024, accused the asset managers of leveraging their substantial holdings to influence coal companies to cut production by 50% by the year 2030, aligning with certain environmental objectives.  

This purported collusion is said to have artificially constrained supply, driving up electricity costs and resulting in significant profit increases for the investment firms—allegations that the defendants had sought to dismiss. 

Paxton said: “BlackRock, State Street, and Vanguard—three of the most powerful financial corporations in the world—created an investment cartel to illegally control national energy markets and squeeze more money out of hardworking Americans.  

“Today’s victory represents a major step in holding them accountable. I will continue fighting to protect Texas and defend America’s energy independence from this unlawful conspiracy.” 

The Trump administration initiated legal action in May 2025.  

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