BlackRock execs hit with investor lawsuit over alleged climate collusion

By Mike Scarcella

WASHINGTON, Feb 10 (Reuters) - Financial services company BlackRock BLK.N and some of its corporate leaders are facing an investor lawsuit that accuses them of mounting an illegal campaign to curb coal production across the United States.

The lawsuit, filed by a shareholder on Monday in federal court in Texas, claims BlackRock leaders used the asset management firm’s sizable holdings in major coal companies to pressure them into cutting production.

BlackRock’s influence helped to push coal producers to scale back output from 2019 to 2022, even as demand and prices rose, the lawsuit said.

BlackRock did not immediately respond to a request for comment. An attorney for plaintiff Joseph Crognale declined to comment.

The case was filed as a so-called derivative lawsuit on the company's behalf. The defendants include Laurence Fink, BlackRock's chairman and chief executive, and Martin Small, the company’s chief financial officer.

“The anticompetitive effects of BlackRock’s output suppression scheme imposed severe harms on American consumers, the competitive coal market, and ultimately BlackRock’s own stockholders,” the lawsuit said.

BlackRock allegedly misled investors by marketing some of its funds as unrelated to environmental or social objectives while still using the shares held in those funds to support a climate‑related agenda.

The lawsuit said BlackRock’s directors approved and oversaw the alleged scheme despite the antitrust risks and in breach of their fiduciary duties to shareholders.

Their conduct “has exposed the company to massive antitrust liability and financial exposure,” according to the lawsuit.

A judge last year declined to dismiss most of an earlier lawsuit filed by Texas and 12 other Republican-led states that claimed BlackRock and other fund managers violated antitrust law through climate activism that reduced coal production and boosted energy prices.

BlackRock and the other fund managers denied any wrongdoing in the states' lawsuit, calling the claims "half-baked and untested."

The investor lawsuit seeks unspecified monetary damages on behalf of BlackRock, changes to the company’s governance practices, and repayment from directors and officers who allegedly benefited.

The case is Joseph Crognale v. Laurence Fink et al., U.S. District Court for the Eastern District of Texas, No. 6:26-cv-00085.

For plaintiff: Gregory Nespole of Levi & Korsinsky and Brian Robbins of Robbins LLP

For defendant: No appearance yet

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