Montana AG settles with Vanguard for $29.5M over coal market practices

AG: Montana News

Filed February 27th, 2026

Detected March 18th, 2026

Summary

Montana Attorney General Austin Knudsen announced a $29.5 million settlement with The Vanguard Group for alleged anticompetitive practices in the coal market. Vanguard agreed not to use its shareholdings to direct portfolio companies' business strategies or threaten them over ESG goals.

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What changed

Montana Attorney General Austin Knudsen has reached a $29.5 million settlement with The Vanguard Group, Inc. concerning allegations of conspiring to artificially constrict the coal market through anticompetitive trade practices. The lawsuit, initially filed in 2024 against Vanguard, BlackRock, and State Street, alleged that these asset managers used their stockholdings to control coal companies and pressure them to reduce output to meet ESG goals, thereby raising coal and electricity prices. This settlement specifically prohibits Vanguard from using its shareholdings to direct portfolio companies' business strategies, threatening divestment unless companies comply with certain actions, or nominating directors/shareholder proposals aimed at ESG compliance. Vanguard will also offer proxy voting to investors in funds representing at least 50% of its U.S. equity fund assets.

This settlement requires Vanguard to cease using its influence to prioritize ESG goals over client profitability and pay $29.5 million to the states involved. While the litigation against BlackRock and State Street continues, Vanguard's agreement sets a precedent for how asset managers can engage with their portfolio companies regarding environmental policies. Regulated entities, particularly fund managers and financial advisers, should review their engagement and proxy voting policies to ensure compliance with fiduciary responsibilities and avoid anticompetitive practices. The settlement funds are held in escrow, and the specific distribution plan is pending.

What to do next

Review investment and proxy voting policies to ensure they prioritize client profitability over ESG goals where legally required.
Ensure no use of shareholdings to direct portfolio companies' business strategies or threaten them regarding ESG compliance.
Monitor ongoing litigation against BlackRock and State Street for potential further industry impact.

Penalties

$29.5 million paid to the states

Source document (simplified)

Published On: February 27, 2026 Categories: Holding Businesses Accountable, Press Release HELENA – Montana Attorney General Austin Knudsen today announced a landmark settlement agreement with The Vanguard Group, Inc. (“Vanguard”) for conspiring to artificially constrict the coal market through anticompetitive trade practices.

In 2024, Attorney General Knudsen filed a lawsuit against asset managers Vanguard, BlackRock, and State Street Corporation for how they were using their substantial stockholdings in every significant publicly held coal producer in the United States to control the policies of the coal companies, which raised the price of coal and electricity prices in the U.S. The investment cartel’s main objective was to reduce coal output by more than half by 2030 by weaponizing its shares to pressure the coal companies to meet “green energy” goals. Today’s settlement agreement guarantees Vanguard will avoid prioritizing environmental, social, and governance (ESG) goals over its client’s profitability, which is the group’s fiduciary responsibility. The litigation against BlackRock and State Street remains ongoing.

“Vanguard came to the correct conclusion in agreeing to this settlement and honoring its fiduciary responsibility to its clients instead of pushing a woke anti-energy agenda. BlackRock and State Street should follow suit,” Attorney General Knudsen said. “Coal is a huge part of Montana’s economy and our daily lives as we rely on it to power our homes. As Attorney General, I will continue to do everything in my power to ensure America’s energy dominance and that companies are following the law.”

As part of the settlement, 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. Vanguard has also agreed to pay $29.5 million to the states. The money will be held in an escrow account until a later date.

Additionally, Vanguard will offer proxy voting to investors in funds accounting for at least 50% percent of assets invested in U.S. equity funds it advises. This will ensure that Vanguard’s clients can make their voices known on portfolio companies’ business, including whether they want to maximize profitability over ESG or other goals.

Attorneys general from Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Nebraska, Texas, and Wyoming are also part of the lawsuit and settlement agreement.