Private Prison Giants GEO And CCA Accused of “False and Misleading Statements”

The companies are under fire for hiding the truth about its business from investors.

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Update, 8/29/2016, 2:38 p.m. EST: On Friday, August 26, a similar shareholder lawsuit was filed by investors in GEO Group, the United States’ largest private prison company. It alleges that the company failed to disclose risks of losing its federal contract due to a lack of adequate safety standards.

A shareholder class-action lawsuit was filed Wednesday against Corrections Corporation of America, a private prison company that was the subject of a recent Mother Jones investigation. Last week, the Department of Justice announced it would work to end its private prison contracts.

The shareholders allege that CCA and its executive officers made false or misleading statements that put the business in jeopardy, charging that CCA failed to disclose to its investors that “facilities lacked adequate safety and security standards and were less efficient at offering correctional services than the Federal Bureau of Prisons” and that “consequently, the U.S. Department of Justice (‘DOJ’) was unlikely to renew and/or extend its contracts.”

The complaint notes Deputy Attorney Sally Yates’s announcement on August 18 that the DOJ would work to stop contracting with private prisons. That decision came a week after the DOJ inspector general released a report showing lacking safety and security in private prisons, and seven weeks after a Mother Jones investigation drew national attention to CCA’s operation of a facility in Louisiana. On the day of the DOJ announcement, CCA’s stock value fell more than 35 percent.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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