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 the Corrections Corporation of America’s operation of a facility in Louisiana. On the day of the DOJ announcement, CCA’s stock value fell more than 35 percent.


Politics | Mother Jones