Texas is suing investment firms over alleged antitrust violations

AUSTIN (KXAN) — Texas is suing three major investment firms, saying the companies violated antitrust laws causing people to pay more for electricity. The lawsuit claims this happened through climate activism, which in turn reduced coal production and caused energy prices to skyrocket.

Texas is one of 10 states suing Black Rock, Vanguard and State Street.

“This is a federal antitrust case. These things are complicated,” said Randy Erben, a law professor at the University of Texas.

Paxton joined 10 other attorneys general to sue three of the world’s largest investors. The lawsuit alleges that by controlling the supply of coal, they caused fuel prices to rise.

“The accusation is that they pushed a green energy policy that would reduce coal production,” Erben explained.

The lawsuit also alleges that “these firms deceived thousands of investors in non-environmental, social and governance funds in order to maximize their profits.”

“You have three very strong investment houses that are very well represented by very good lawyers,” Erben said.

Erben also points out that it will take a long time for this to be heard in court.

“It will likely take several years to find a final solution unless they reach an agreement,” he said.

In a statement, Black Rock said, in part: “The allegation that Black Rock invested money in companies with the aim of harming those companies is baseless and defies common sense.” This lawsuit undermines Texas’ pro-business reputation and deters Investing in companies that consumers trust.”

A statement from State Street said the lawsuit was “baseless and we look forward to presenting the facts at trial.”

“State Street acts in the long-term financial interests of investors with a focus on increasing shareholder value. “As long-term investors, we have a shared interest in the long-term success of our portfolio companies,” the statement reads in part.

A slow-moving process that could still be years away from resolution.

“Will this change the average consumer’s electricity bill overnight? Probably not. All that matters is the resolution of this case,” said Erben.

KXAN has also reached out to Vanguard for comment. The company has not responded. This story will be updated if a response is received.

You can read the full lawsuit here.