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GEO faces lawsuits over Justice Department's plan to end private-prisons

GEO Group, a private-prison corporation, faces lawsuits after the Department of Justice (DOJ) decided to end the use of private-prisons, reported the Sun Sentinel. 

Multiple shareholders lawsuits have been filed against GEO Group, alleging violations of securities laws. The lawsuits are are on behalf of investors who purchased stock between March 2012 and August 12th of the same year. These lawsuits are the newest of a growing list of shareholders who allege that GEO made false or misleading statements and failed to disclose that GEO's facilities lacked proper security and safety standards and that they were less efficient than Bureau of Prison run facilities. The lawsuits also claim that GEO did not inform shareholders that the DOJ was unlikely to renew private-prison contracts. 

 

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The Department of Homeland Security (DHS) will evaluate whether the agency should continue contracting with private corporations to run their immigrant detention facilities. According to Fortune, shares in both Corrections Corporations of America (CCA) and GEO Group both dropped after the announcement.
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