Shareholders suing private prison operator CoreCivic have won class action status for a lawsuit claiming the company inflated stock prices by misrepresenting the quality and value of its services.
CoreCivic’s public statements to shareholders have said the Nashville, Tennessee-based company provides a high quality service at a lower cost than government-run facilities. The securities fraud suit claims CoreCivic executives knew those statements were false.
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In a filing with the Securities and Exchange Commission, CoreCivic has said the suit is “entirely without merit.”
On Tuesday, U.S. District Judge Aleta Trauger agreed to class action status for the suit. Her ruling relied in part on CoreCivic internal communications showing executives knew of serious problems with at least some of their facilities.
The plaintiffs are led by Amalgamated Bank, which says it lost $1.2 million.
