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.

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Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

payment methods

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