Investment Cartels? Who Really Rules? 🤬

Unveiling Financial Titans: The Texas Ruling, ESG, and Delaware’s Local Struggles

By Shane Shipman (& Grok not fully polished)| August 16, 2025

A recent federal court ruling in Texas has sent shockwaves through the financial world, spotlighting the immense power of asset management giants BlackRock, Vanguard, and State Street. The decision, which allows a lawsuit accusing these firms of forming an "investment cartel" to manipulate U.S. coal markets, has fueled debates about Environmental, Social, and Governance (ESG) investing and its broader economic impacts. For some, this ruling validates long-held suspicions of a coordinated effort to control markets under the guise of sustainability. For others, it’s a politically charged attack on legitimate investment strategies. But what does this mean for local communities, like those in Delaware, where similar concerns about corporate influence are bubbling up? This thought piece dives into the Texas ruling, its implications for ESG, and its eerie parallels to local issues in Delaware, urging readers to question the balance of power in our economy.

The Texas Ruling: A Crack in the Financial Facade?

On August 1, 2025, U.S. District Judge Jeremy Kernodle denied motions to dismiss most claims in a lawsuit filed by Texas Attorney General Ken Paxton, joined by 10 other Republican-led states, against BlackRock, Vanguard, and State Street. The lawsuit alleges these firms violated the Clayton Antitrust Act by using their significant shareholdings in U.S. coal producers—like Peabody Energy (30.43% owned) and Arch Resources (34.19% owned)—to pressure them into cutting coal production by 50% by 2030. This, the states claim, was done through participation in climate initiatives like the Net Zero Asset Managers Initiative (NZAM) and Climate Action 100+, reducing coal supply, inflating energy prices, and generating "cartel-level profits" for the firms.

The ruling is a procedural win, not a final verdict. It allows the case to proceed to discovery, where evidence will be gathered to test the states’ claims. Judge Kernodle noted "enough circumstantial evidence" to suggest the firms agreed to pressure coal companies, citing their public commitments to climate goals. However, he cautioned that the states "lack direct evidence of a conspiracy" and may struggle to prove their case, calling it a "close call." ESG Today reported BlackRock’s response, calling the lawsuit “absurd” and arguing that forcing divestment could harm coal companies and raise energy prices further. State Street labeled it “baseless,” and Vanguard expressed disappointment but vowed to fight.

What’s at Stake?

The Texas case is a lightning rod in the ongoing battle over ESG investing. Proponents argue ESG addresses critical risks like climate change, aligning investments with long-term sustainability. Critics, including Paxton, see it as a tool for pushing political agendas, harming traditional industries like coal and raising costs for consumers. The lawsuit’s outcome could reshape how asset managers wield shareholder power, potentially limiting ESG-driven activism or reinforcing their ability to pursue climate goals without antitrust scrutiny.

Social media platforms like X amplify the stakes, with users like @WallStreetApes and @karma44921039 framing the ruling as proof of a conspiracy to “shut down coal companies” and “force green energy mandates” while “jacking up prices.” These sentiments resonate with distrust in financial giants, but the lack of direct evidence tempers the narrative. The truth likely lies in a gray area: the firms’ actions may reflect market incentives or client demands, not a shadowy cartel.

Delaware’s Echoes: A Local Lens on Global Power

The Texas ruling resonates beyond coal markets, echoing concerns in places like Delaware, where residents are grappling with rapid development, rising costs, and perceived corporate overreach. Some locals, like those on X, draw parallels to the Big Three’s influence in their state, pointing to their stakes in companies tied to property reassessments, tax breaks, housing development, and utilities. Could the same financial titans accused of manipulating energy markets be shaping Delaware’s economic landscape?

The Delaware Connection

Delaware’s concerns center on several issues:

• Property Tax Reassessments: Tyler Technologies, a provider of software for local governments, has been linked to controversial property tax reassessments in Delaware, particularly in New Castle County. Critics argue these reassessments are unfair, with lawsuits filed over inaccuracies. BlackRock, Vanguard, and State Street likely hold shares in Tyler (as they do in most public companies), raising questions about their influence.
• Corporate Tax Breaks: Companies like Amazon and Costco, major players in Delaware’s economy, benefit from tax incentives. The Big Three’s significant stakes in these firms fuel suspicions that they’re orchestrating favorable policies, though evidence of direct manipulation is scarce.
• Housing and Land Development: Delaware’s rapid residential growth, driven by builders like Ryan Homes (owned by NVR, Inc.), has sparked affordability concerns. The Big Three’s ownership in NVR suggests potential influence, but proving they’re deliberately making housing unaffordable requires more than shareholdings.
• Utility Monopolies: Chesapeake Utilities and Artesian Resources, key players in Delaware’s utility sector, are also partially owned by the Big Three. Locals worry about overdevelopment and monopolistic practices, but linking these to a coordinated strategy needs substantiation.

A post on X by @newstart_2024 explicitly ties the Texas ruling to Delaware, claiming the Big Three’s actions mirror local issues with “corrupt reassessments” and land grabs. While compelling, this narrative relies on circumstantial connections, much like the Texas lawsuit.

Is There a Conspiracy?

The idea of an “investment cartel” controlling Delaware’s economy is tantalizing but demands scrutiny. The Big Three’s ownership in companies like Tyler, NVR, or Chesapeake is likely a byproduct of their index fund strategies, which involve holding stakes in nearly all major U.S. firms. For example, Vanguard’s S&P 500 ETF (VOO) naturally includes these companies. Proving they’re using this ownership to manipulate local markets requires evidence of specific actions, like proxy voting to influence reassessments or development policies.

Delaware’s challenges—housing costs, utility rates, tax policies—reflect broader trends in growing states. Local government decisions, like zoning laws or economic incentives, may play a larger role than distant asset managers. Still, the Texas ruling raises valid questions about how much power the Big Three wield and whether their ESG commitments ripple into local economies in unintended ways.

ESG: Hero or Villain?

At the heart of both the Texas lawsuit and Delaware’s concerns is ESG investing. Supporters argue it’s a necessary response to climate risks, with investors like BlackRock responding to client demands for sustainable portfolios. Critics, including Texas AG Paxton, view it as a politicized tool that prioritizes ideology over economic realities, harming industries like coal and raising costs for consumers.

“The antitrust laws don’t permit a blind eye to an illegal deal just because the parties commit to some unrelated social benefit.” — Texas v. BlackRock Complaint Harvard Law School Forum

The Texas case tests whether ESG-driven shareholder activism can violate antitrust laws. If the states prove the Big Three colluded to reduce coal output, it could chill ESG initiatives, forcing firms to prioritize financial returns over environmental goals. Conversely, if the firms prevail, it may embolden ESG investing, though political backlash could persist.

In Delaware, the ESG lens is less clear but equally provocative. Could the Big Three’s push for sustainability influence local utilities to prioritize green energy, raising rates? Are their investments in developers like NVR driving unsustainable growth? These questions demand evidence, but they highlight the tension between global financial strategies and local impacts.

Broader Implications: Power, Accountability, and the Future

The Texas ruling and Delaware’s concerns point to a larger issue: the concentration of financial power. BlackRock, Vanguard, and State Street manage trillions in assets, giving them unparalleled influence over corporate America. Their index fund model, while efficient, raises questions about “common ownership”—where a few firms hold significant stakes in competing companies, potentially softening competition.

Economists like Einer Elhauge have argued that common ownership can lead to anticompetitive outcomes, even without explicit collusion. The Texas lawsuit tests this theory, and its outcome could set precedents for regulating institutional investors. In Delaware, residents might ask: are these firms’ stakes in local companies creating similar distortions, like inflated housing costs or utility monopolies?

Questions to Ponder

• Are the Big Three’s ESG commitments driven by client demand or a top-down agenda? Check their proxy voting records (SEC Form N-PX) for clues.
• Could Delaware’s issues—reassessments, tax breaks, development—stem from local policies rather than a coordinated financial conspiracy?
• If the Texas lawsuit succeeds, how might it affect ESG investing nationwide? Could it limit the Big Three’s influence or harm industries like coal?
• Is the backlash against ESG a defense of free markets or a political reaction to changing economic priorities?

Call to Action

Dig deeper. Review local government records on reassessments, tax incentives, and zoning. Investigate the Big Three’s voting records in companies like Tyler Technologies or NVR. Share your findings with your community to spark discussion and demand accountability.

Conclusion: A Call for Vigilance

The Texas ruling is a wake-up call, exposing the potential for financial giants to shape markets in ways that affect everyday Americans. In Delaware, similar concerns about corporate influence resonate, from reassessments to housing costs. While the “investment cartel” narrative is compelling, it’s not yet proven—neither in Texas nor Delaware. The truth likely lies in a complex interplay of market incentives, shareholder power, and local policies.

As citizens, we must remain vigilant, questioning the influence of firms like BlackRock, Vanguard, and State Street while demanding evidence to support or refute claims of conspiracy. The Texas case is a step toward accountability, but it’s only the beginning. In Delaware, the fight is local—engage with your community, scrutinize public records, and hold both corporations and governments accountable. The power of these financial titans is real, but so is the power of informed citizens.

What do you think? Are the Big Three orchestrating a grand scheme, or are they simply navigating a changing economic landscape? Share your thoughts in the comments and join the conversation.