CoreCivic, Inc. (CXW), formerly the Corrections Corporation of America, officials engaged in a scheme to defraud investors.
Investors filed a securities class action complaint against CoreCivic (formerly “Corrections Corporation of America” or “CCA”) for alleged violations of the Securities Exchange Act of 1934. The complaint alleges that CoreCivic officials engaged in a scheme to defraud investors by falsely representing that the outsourcing of correctional services to CCA resulted in improved correctional services for government agencies, including the Federal Bureau of Prisons (“BOP”), and that CCA’s facilities were operated in accordance with applicable policies and procedures. In reality, the BOP had uncovered and notified CCA of numerous violations of BOP policies, including understaffing and underqualified staff and failure to provide adequate health care to its inmates. On December 18, 2017, the Honorable Aleta A. Trauger of the U.S. District Court for the Middle District of Tennessee, Nashville Division, denied CoreCivic’s motion to dismiss in Grae v. Corrections Corporation of America.