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Vanguard settles with Texas in key case on ESG investing

Fund manager Vanguard Group is to pay $29.5m to settle a lawsuit by 13 Republican state attorneys general who claimed the firm and rivals violated antitrust law through climate activism. Reuters notes that the suit in the U.S. District Court in the Eastern District of Texas has been closely watched as a test of how far Republicans from energy-producing states would push Wall Street firms they accused of overemphasizing environmental matters. Kansas Attorney General Kris Kobach, one of the plaintiffs, said Vanguard "agreed to strict passivity commitments" which prohibit the firm from dictating the strategy of companies in which it invests or to push shareholder proposals related to environmental or social concerns. Vanguard decided to settle the litigation to avoid the potential for tens of millions of dollars in legal fees and to get rid of the “distraction”, said sources.

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