After DOJ Decision, Shareholders Go After Private Prisons
Law firm Kessler Topaz Meltzer & Check, LLP has filed two class actions on behalf of shareholders. The first was against The GEO Group, Inc. which provides government-outsourced services, including the management of correctional and detention facilities in the United States and internationally. Kessler Topaz filed the lawsuit on behalf of purchasers of GEO Group securities between March 1, 2012 and August 17, 2016. Kessler Topaz also filed a class action on behalf of shareholders of Corrections Corporation of America. Equity shares of GEO Group and Corrections Corporation of America plummeted after U.S. Deputy Attorney General Sally Yates, on August 18, 2016, announced the U.S. Department of Justice (DOJ) decision to end the use of private prisons for federal inmates. Yates mandated DOJ officials to either not renew contracts for private prisons or substantially reduce the scope of the contract – effectively ending the use of private prisons in the federal space. Privately-operated federal prisons house a very small percentage of the overall inmate population – in this case about 22,000 inmates. Most inmates are housed in state prisons. Public pensions like the California Public Employees’ Retirement System (CalPERS) hold shares in Geo Group.
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