Privatized Prisons: They can't even behave on wall street:
Fraud Lawsuit Filed for Purchasers of Corrections Corp.
NASHVILLE, Tenn., May 17
A securities fraud lawsuit has been filed in the Chancery Court of Davidson County in Nashville, Tennessee on behalf of all purchasers of the common stock and other securities of Corrections Corporation of America (NYSE: PZN) (formerly NYSE: CCA)
"Corrections" between April 24, 1997 and April 20, 1998 (the "Class Period").
The lawsuit alleges that Corrections and certain of its officers and directors issued false and misleading statements regarding Corrections, which caused the price of Corrections' common stock and securities to trade at artificially inflated prices throughout the Class Period.
The lawsuit alleges that the defendants stated that the formation of CCA Prison Realty Trust would be "accretive" to Correction's near-term earnings, that Corrections would benefit by that transaction and that Corrections would be able to continue to grow its earnings at 40-50 percent annually.
After these statements inflated Correction's stock price, the defendants sold $19.1 million in Corrections common stock, at prices ranging from $35-$44 per share.
However, on April 20, 1998, the defendants announced that Corrections would merge into CCA Prison Realty Trust, thereby becoming PZN, and as a result, that Correction's earnings would only grow at 17-25 percent.
Upon this revelation, Corrections stock and securities collapsed in price, and currently trade at approximately $15 per share.
Analysts stated: "analysts thought Corrections Corp. was growing at 50 percent, and now growth is diluted to 25 percent," and Corrections was "not a growth story anymore."
This lawsuit was filed by lawyers with substantial experience in prosecuting
class action lawsuits on behalf of investors.If you purchased Corrections common stock or securities and wish to discuss this action on your rights or interests, please E-mail or call one of the attorneys listed below:
Scott E. Poynter
Gina M. Cothern
2200 N. Rodney Parham Road
Suite 218, Cypress Plaza
Little Rock, AR 72212
1-888-551-9944 - toll free
SOURCE Law Offices of Steven E. Cauley, P.A. CO: Law Offices of Steven E. Cauley, P.A.; Corrections Corporation of America ST: Tennessee, Arkansas IN: SU: LAW