They sell thrift and virtue in tidy brochures – low fees, index purity, a co-op model that sounds like someone’s gran folded into a corporate charter. Walk the corridors of Vanguard’s polished campus and you’ll smell nothing but antiseptic carpets and the faint whiff of passive arrogance. Underneath that beige, though, is a top-heavy machine built on scale, opacity and a single, unforgiving metric – growth. And when institutions grow so huge that their every twitch tilts markets, the niceties of ethics become optional extras.

Buy the myth – then pull the plug

Vanguard prides itself on being different. They say they’re owned by their funds, which are owned by investors – innocence as governance. But when that structure met real capitalism it produced a bastard child called “pretend stewardship”. The company’s first-ever acquisition – a tiny direct-indexing platform called JustInvest – has blown up into a courtroom soap opera. Founders allege Vanguard lured them in with promises, structured the deal so most pay would depend on hitting targets, then quietly moved the goalposts – blocking access, choking revenue and engineering the very shortfall that stripped the founders’ payoff. If true, it’s not just corporate roughhousing – it’s calculated, contract-level sharp practice. The giant buys the small and then treats the founders like an afterthought. Charming.

Green claims, greenwash and a courtroom thump

Talk of “ethically conscious” funds is supposed to let retail investors sleep at night. Vanguard once sold that sleep in Australia – until a federal judge pulled the duvet off. Regulators found the fund’s ESG-exclusion claims were misleading; a record A $12.9m penalty followed. That’s not just a slap on the wrist. It’s a public whack from a court that says the marketing lied. Nice green sticker, shame about the contents.

The quiet vote that never happens

Here’s the thing about passive power – if you own everything, you decide nothing. Vanguard sits, hands folded, while companies that should be pushed on climate, human rights and pay practices roll on. Independent analysis shows Vanguard backed almost none of the social and environmental shareholder proposals in 2024. In the fights that actually matter – the battles that could bend corporate behaviour – the world’s third-largest asset manager voted timid. That silence has teeth; it is consent.

Your pension, their profit – and Beijing

Want to fund the modern PLA or Chinese surveillance firms by accident? You might already be doing it through global index funds. Congressional investigators and independent researchers have shown major US asset managers – Vanguard included – funnelling billions into firms tied to China’s military-industrial complex and surveillance apparatus. Whether through negligence or the relentless pursuit of index completeness, the dollars flow into companies doing things many of us would find morally repugnant. Your life savings, quietly underwriting tech used in repression – cosy.

Accounts, hacks and the brittle face of security

Vanguard will tell you security is a priority. Then, quietly, they will tell you they locked down accounts after “suspicious activity” using credentials grabbed from other breaches. Customers got account-lock notices; some reported impersonation scams and attempted takeovers. No evidence of mass theft, maybe – but the message is the same: when credential stuffing is an industry problem, the giant’s promise to protect retail investors looks threadbare.

Too big to care – and too big to change

There’s another scandal that doesn’t fit well in headlines – systemic scale. When a firm controls trillions, their votes, their algorithms and their products shape whole markets. Academics and regulators warn about “common ownership” – the idea that index giants, by owning stakes across competitors, can blunt competition and reduce accountability. It’s not sexy, but it’s lethal. The quiet, structural rot of influence buys a thousand small complicities – and in aggregate, it becomes a wrecking ball.

Final cut – Vanguard and Cummins

Look, it’s not just abstract theory. Vanguard is one of the largest shareholders in Cummins (CMI) – holding a position that matters. Worse – instead of flinching after the criticism in our June 20 exposé, “Guard Us From Vanguard”, Vanguard quietly doubled down. Between the quarter ending 31 Mar 2025 and the quarter ending 30 Jun 2025 they increased their Cummins holding from 17,283,469 shares to 17,628,149 shares – a buy of 344,680 shares, roughly +2%. Translation – the headlines annoyed nobody on the trading desk; they bought more. While PR wrings its hands and issues cautious statements, the portfolio does the heavy lifting for the machine.

If you still park your pension with them after this, congratulations – you’re happy funding pollution, repression and corporate dickery while sleeping like a fucking baby. Enjoy being part of the problem.

Lee Thompson – Founder, The Cummins Accountability Project

Shareholder Spotlight : Vanguard Part II – How Your Pension Backs Ugly Business