❓WHAT HAPPENED: Texas Attorney General Ken Paxton (R) announced that the Vanguard Group has agreed to a “first-of-its-kind settlement”—effectively ending its defense in a multi-state antitrust lawsuit targeting the company along with BlackRock and State Street, alleging coordinated environmental, social, and governance (ESG)-driven market manipulation.
👤WHO WAS INVOLVED: Ken Paxton, Vanguard Group, BlackRock, State Street, corporate shareholders, asset management clients, and the U.S. Department of Justice (DOJ) Antitrust Division.
📍WHEN & WHERE: The settlement was announced on February 26, 2026.
💬KEY QUOTE: “While Vanguard has taken appropriate action to resolve this case, BlackRock and State Street have continued to ignore state laws, engage in anticompetitive schemes that hurt American energy, and undermine those who use their services to invest.” — Ken Paxton
🎯IMPACT: The decision by Vanguard to settle the case likely signals significant trouble for the asset management company’s former co-defendants, and, according to Paxton’s office, could mark a final ruling that “fundamentally resets the precedent for the conduct of large institutional investors.”
Texas Attorney General Ken Paxton (R) announced that the Vanguard Group has agreed to a “first-of-its-kind settlement”—effectively ending its defense in a multi-state antitrust lawsuit targeting the company along with BlackRock and State Street, alleging coordinated environmental, social, and governance (ESG)-driven market manipulation. The decision by Vanguard to settle the case likely signals significant trouble for the asset management company’s former co-defendants, and, according to Paxton’s office, could mark a final ruling that “fundamentally resets the precedent for the conduct of large institutional investors.”
“I am glad to see that Vanguard has chosen to protect investors and become the industry leader when it comes to empowering investors with proxy voting choice. This sets a new standard for institutional investors that every company should follow,” Paxton said, adding, “While Vanguard has taken appropriate action to resolve this case, BlackRock and State Street have continued to ignore state laws, engage in anticompetitive schemes that hurt American energy, and undermine those who use their services to invest.”
The antitrust litigation centers around allegations that “a BlackRock-led cartel that sought to drive up the price of coal under the guise of ‘green energy,'” and that “BlackRock’s efforts produced massive profits for itself and its co-conspirators and raised the prices of electricity on consumers throughout the United States.” The Texas Attorney General’s office further asserts that “To further profit on the back of Americans, BlackRock also deceived thousands of its investors who elected to invest in non-ESG funds.”
Importantly, as part of its settlement, Vanguard has agreed to no longer pursue an ESG agenda over profit motive for its clients. According to the Texas Attorney General, “Vanguard will not use its shareholdings to (a) direct its portfolio companies’ business strategies, (b) threaten its portfolio companies that it will withdraw from its holdings unless they agree to act (or not act) in some manner, or (c) nominate directors or shareholder proposals to its portfolio companies.” In addition, the company will pay $29.5 million in fines.
Notably, Paxton’s legal action against three asset management companies—with BlackRock as the primary defendant—was backed by the Trump administration’s Department of Justice (DOJ) Antitrust Division and former Assistant Attorney General Gail Slater. However, following Slater’s ouster after a push by Republican lobbyist Mike Davis, who represented several clients under scrutiny for anticompetitive conduct, it is unclear where the department stands on Paxton’s litigation.
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