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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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America will move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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