American Airlines will have to pay for taking investors’ funds and putting them into little-to-no-profit, Marxist ESG investments.
An expert witness for the pilots testified that BlackRock’s May 2021 proxy vote at ExxonMobil, which focused on ESG priorities, devalued energy stocks and caused the airline’s 401(k) plan to suffer more than $15 million in losses, an estimate American called “deeply flawed.”
According to a Texas federal judge, American Air violated federal law by pursuing [Marxist] Environmental, Social, and Corporate Governance goals with 401Ks.
It is the most significant victory so far against these socialist investments.
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The airline breached its fiduciary duty of loyalty—but not its fiduciary duty of prudence—in allowing its $26 billion retirement plan to be influenced by corporate goals unrelated to workers’ best financial interests, Judge Reed O’Connor of the US District Court for the Northern District of Texas said after a four-day, non-jury trial.
So, the judge felt they meant well but had no right to do it.
According to Bloomberg Law, the 2023 lawsuit says the airline wrongly offered 401(k) funds managed by companies that pursue ESG policy goals through proxy voting and shareholder activism, which is the latest battle in the broader debate over socially conscious investing.
Social conscious investing is socialist. Go Capitalism. If people want to invest in something that won’t bring profit, they should do it, but not in this way.
According to O’Connor, the American pilots proved that the airline’s activities—which included hiring BlackRock Inc. to manage billions of dollars in plan assets despite its “ESG-oriented investing and proxy voting activism”—violated the Employee Retirement Income Security Act’s directive to act loyally and in the best interests of plan participants, Bloomberg Law reported.
“ERISA does not permit a fiduciary to pursue a non-pecuniary interest no matter how noble it might view the aim,” O’Connor said, asserting that ESG investments “often underperform traditional investments by approximately 10%.”
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