Full opinion text
MEMORANDUM AND ORDER HARMON, District Judge. Pending before the Court in the above referenced, consolidated, putative class action brought on behalf of purchasers of BMC Software, Inc. stock between July 29, 1999 and July 5, 2000 (“the Class Period”) and alleging fraud in violation of the Securities Exchange Act of 1934 (“Exchange Act”), are two motions: (1) Defendants BMC Software, Inc. (“BMC”), Max . P. Watson, Jr. (“Watson”), William M. Austin (“Austin”), Richard P. Gardner (“Gardner”), Robert E. Beauchamp (“Beauchamp”), M. Brinkley Morse (“Morse”), Kevin M. Weiss (“Weiss”), Roy J. Wilson (“Wilson”), Wayne S. Morris (“Morris”), Theodore W. Van Duyn (“Van Duyn”), Kerin M. Klausmeyer (“Klausmeyer”), and Stephen B. Solcher’s (“Solcher’s”) motion to dismiss pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9 and the Private Securities Litigation Reform Act (“PSLRA”), 15 U.S.C. §§ 78u-4 et seq., (instrument # 72); and (2) Lead Plaintiffs Associated Trust Company, Piedra Capital, Ltd., James Farris, Thomas Griffith for the Society of the Divine Word, and Kosair Charities’ motion to strike exhibits pursuant to Federal Rule of Civil Procedure 12(f)(# 77). BMC is a public company headquartered in Houston, Texas selling high performance software tools and utilities for large companies’ information technology systems, including mainframe, distributed, and internet-based systems. Its stock trades on the NASDAQ National Market System. Allegations of Plaintiffs’ Consolidated Amended Complaint (# 50) Plaintiffs sue under §§ 10(b) and 20(a) of the Securities Act of 1934 and Rule 10b-5. They charge that Defendants made the following false and misleading statements: (1) that BMC’s existing software products were enjoying strong sales; (2) that following the acquisitions of Boole & Babbage and New Dimension Software earlier in 1999, integration was successful; (3) that there was strong demand for BMC’s mainframe MIPS software in spite of a slowdown in sales of IBM mainframe computers; and (4) that there was no significant lack of customer deferrals of orders or purchases due to Y2K concerns. These false and misleading statements allegedly artificially inflated the price of its stock to a Class Period high of $86-5/8 on January 3, 2000 and resulted in a 25%-30% growth for BMC during F00-F01 and the 3rd and 4th quarter F00 EPS of $.52 — $.55 and $.58 — $.64, respectively. Furthermore, the Consolidated Amended Complaint alleges that during the Class Period, BMC insiders and controlling shareholders sold 1,364,215 shares of their BMC stock at as high as $78.83 to recoup $75.4 million in illegal insider trading proceeds. On January 5, 2000, two days after BMC’s stock reached its highest price ever, BMC revealed that because of problems integrating BMC, Boole & Babbage and New Dimension sales forces, sales execution procedures in Europe and the United States, and weakness in demand for mainframe MIPS software products, its third quarter F00 results would be far worse than earlier predictions. That day BMC’s stock plummeted from $85-1/8 to $47, an almost 50% drop. When BMC reported a third quarter F00 EPS of just $.41 — a decline from its second quarter F00 and its year-earlier third quarter F99 EPS — BMC stock continued to fall to $35. Even after the disclosure on January 5, 2000, the amended complaint asserts, Defendants continued to issue false positive statements that BMC’s troubles were behind it, to reassure analysts that BMC’s mainframe business was “very strong” and “very profitable,” and that its future was rosy. On January 25, 2000, Watson stated, “During the third quarter, the company faced an unusual set of challenges — some of which we believe were unique to this quarter and therefore behind us.” BMC then surprised the market with a positive earnings report of $.49 per share for the quarter ending March 30, 2000, two cents above the street forecast. As a result, the stock went up to $46 per share and Defendants then sold off their own shares to add to their illegal insider trading proceeds. According to the complaint, on July 5, 2000, the market was stunned when BMC announced that it would substantially miss earnings estimates. Its stock then plunged from $35 per share to $22, a loss of 40% that set a new 52-week low. Defendants blamed the loss on a shortfall in mainframe license revenues, in sharp contrast to their earlier optimism about that same area of BMC’s business. When BMC announced its first quarter F01 results on July 25, 2000, it conceded that its mainframe products would decline 10-20% further. The value of the stock then dropped below $20 per share, becoming the second worst performing stock for the year in the Standard & Poor’s 500 Index. Plaintiffs allege that each Defendant is liable for false statements and for failing to disclose adverse facts while selling BMC stock and for participating in a fraudulent scheme to deceive purchasers of BMC stock. To satisfy the PSLRA’s requirement that Plaintiffs plead scienter, Lead Plaintiffs allege that the individual Defendants, by virtue of their executive positions in BMC and involvement in the day-to-day management of the business, actually knew from internal corporate documents and conversations with other corporate officers and employees, as well as attending management and Board meetings, the nonpublic, negative information about the condition of BMC’s business. Specifically the amended complaint asserts that Defendants were aware of the limited demand for sales of its mainframe MIPS software products; of BMC’s serious difficulties with integration of Boole & Babbage and New Dimension acquisitions, with BMC’s sales force in Europe and the United States, and with customer deferrals and refusal to purchase because of Y2K concerns; and of BMC’s deteriorating revenue and EPS prospects. Sales personnel purportedly informed individual Defendants about purchase and sales problems. Moreover Defendants allegedly knew there was no plan to integrate the various sales forces of the merging entities in Europe and the United States. Defendants also allegedly knew that the sales staffs turnovers were high and that the sales personnel were inexperienced, creating additional problems in generating valid sales. They also knew from regular communications with IBM that IBM was experiencing a slowdown in its mainframe/MIPS sales that would result in a slowdown in BMC’s sales. Thus each Defendant actually knew or recklessly disregarded that the public statements they made were false or misleading when they were made. The Consolidated Amended Complaint also conclusorily asserts that all the Defendants had motive and opportunity to perpetrate the fraudulent scheme, as evidenced by their personally profiting from sales of their BMC stock after their false statements caused artificial inflation of the stock price. In mid to late July 1999, BMC stock fell from $64-7/8 to as low as $47-1/2 because investors feared that BMC’s revenue and EPS growth would fail to meet forecast levels because of Y2K concerns, the slowing demand for BMC products, and difficulties integrating the Boole & Babbage and New Dimension acquisitions. On July 29, 1999 BMC announced its first quarter F00 results, EPS of $42, much better than expected. Chairman, President and CEO Watson stated in BMC’s release of the results, Our first quarter for fiscal 2000 was the one in which BMC Software completed its transition into a top-tier systems software provider. Following the merger with Boole & Babbage in March 1999, we successfully completed the acquisition of New Dimension Software. We have spent the quarter bringing the three companies together into what we believe is a powerful, integrated company. On the same day, after the above, during a conference call for analysts, money and portfolio managers, institutional investors and large BMC shareholders to discuss the first quarter F00 results, its business and its prospects, Watson and Austin represented the following: 1. BMC was successfully integrating New Dimension and Boole and Babbage into its operations and business was performing better than expected. 2. European sales were below plan due to slowness in integrating the Boole and Babbage merger, but operations there were now well integrated and would not interfere with BMC’s achieving forecast-ed F00 results. 3. An increase in BMC’s days sales outstanding (“DSO”) to 86 was due to the acquisition of Boole & Babbage and New Dimension, which had higher DSOs than BMC; BMC’s DSOs would retreat to its traditional 60s during the balance ofFOO. 4. BMC was experiencing continued strong demand for its mainframe MIPS software. 5. BMC expected that its operating margins would reach 34-36% by the end ofFOO. 6.BMC predicted third quarter F00 and fourth quarter F00 EPS of $.52-$.56 and $.58-$.64 by year end F00. The amended complaint goes on to summarize numerous analysts’ reports based on the conference call and subsequent conversations with Watson and/or Austin. Because the amended complaint specifically targets only alleged misrepresentations made by two officials of the company Watson and Austin), because, as will be discussed, the complaint fails to state a private cause of action for insider trading under section 20A of the Exchange Act, and because those courts that have addressed the question of issuer liability for third-party misstatements (here analysts’ reports) have established criteria for pleading and proof not met by the amended complaint here, the Court summarizes the amended complaint’s allegations about these reports in a footnote. Following BMC’s July 29, 1999 positive presentation of the current state of its business and its better-than-expected IQ F00 EPS, its stock value stopped declining and moved upward. It jumped from $47-1/2 on that day to $53-7/8 the next day and to $59-3/4 on August 25, 1999. Between August 3 and 30, 1999, Defendants sold 494,901 shares of their BMC stock for $26.3 million dollars, all allegedly illegal insider trading proceeds. At a Systems Management Software Conference in Santa Clara, California on August 3, 1999, Watson represented the following to analysts, money and portfolio managers, institutional investors, brokers and stock traders: (1) BMC was successfully integrating New Dimension and Boole & Babbage into its operations, and business was better than expected; (2) European sales were below plan due to slowness in integrating the Boole & Babbage merger, but operations there were now well integrated and would not interfere with BMC’s achieving forecasted F00 results; (3) The increase of its DSOs to 86 was due to the acquisition of Boole & Babbage and New Dimension, which had higher DSOs than BMC, but BMC expected DSOs to return to BMC’s traditional 60s during the rest of F00; (4) There was continued strong demand for BMC’s mainframe MIPS software; (5) BMC expected its operating margins would reach 34-36% by year-end F00; and (6) BMC predicts 3rdQ F00 and 4thQ F00 EPS of $.52-$.56 and $58-$.64, respectively, and F00 EPS of $1.97-$2.05 and 25%-30% EPS growth henceforth. The Consolidated Amended Complaint asserts that the statements made by company officials between July 29 and September 20, 1999 were false or misleading when they were issued because of the following “concealed facts.” BMC was experiencing substantial and increasing resistance from customers regarding purchase of its mainframe software systems, in particular of large or big-ticket systems, because of Y2K concerns. Customers informed sales representatives as early as September 1999 that customers planned to “freeze” all pin-chases of mainframe software systems until at least after January 2000. As an example, the complaint states that in the Quebec, Canada region, BMC sales representatives informed BMC management that sales quotas would not be met and that management had false expectations for the area, that the goals were too aggressive for Quebec’s weak economy and Y2K concerns there, and that the Quebec region would meet only 50% of its sales goals. Furthermore, demand for BMC’s mainframe/MIPs software was also softening because of Y2K concerns and deferring substantial software purchases until after the new year. Furthermore, according to the amended complaint, BMC’s weakness in European sales was not due to seasonal factors but to significant problems in integrating Boole & Babbage and New Dimension with BMC, especially the sales forces in Europe. The complaint asserts that management did not even have a plan for completing the integration of the three entities. Moreover, the complaint alleges that BMC experienced increasing difficulties in closing big-ticket or large sales because of an inadequately trained and ineffective sales force, Y2K concerns of customers, and growing competition from Computer Associates, all casting doubts on BMC’s ability to achieve forecasted quarterly EPS. It became even more dependent upon closing a large number of big sales at or near the end of the quarter. In attempting to integrate the sales forces of the three entities, particularly in Europe, BMC purportedly lost control of over sales execution process there and over accurate forecasting of sales or EPS on a quarterly basis. Defendants allegedly knew that BMC’s forecast earnings for the quarter ending 12/31/99 were unreliable and incorrect because BMC had no control over the projections made by members of the sales forces of Boole & Babbage and of New Dimension. The effort to rapidly integrate these sales forces also resulted in several different salespersons attempting to sell different BMC products to the same potential customer, causing customer confusion and complaints that hurt sales. Not only did customers no longer know who was their sales representative, but sales persons, following redefinition of their territories, no longer knew who their supervisors were. Sales people from Boole & Babbage & New Dimensions, who, the complaint asserts, felt animosity toward BMC personnel, were inadequately trained to sell BMC products and their sales productivity was poor, hurting BMC. Furthermore, by July 1999, only 40% of BMC’s sales force had been with BMC for eighteen months or more. BMC was thus dependent upon an inexperienced and inadequately trained sales force in increasingly large, complex, hard-to-close transactions. These problems with the sales force and its execution were not limited to Europe, but extended to North America, according to the pleadings. The amended complaint charges that BMC, in order to conceal the nature and extent of these adverse factors, artificially inflated its reported revenues and EPS by inducing customers to accept large software packages while promising them unusually extended payments or offering other side agreements delaying or even forgiving payment under specified circumstances. Furthermore, the amended complaint alleges that because of these problems, Defendants knew that their EPS forecasts were false and not achievable. On October 6, 1999, BMC disclosed that its EPS for 2ndQ F00, ending 9/30/00, would be $.40-$.42, not the previously forecast $.43-$.45. On October 7, 1999, its stock fell from $72-3/8 to $60-1/2, and continued to fall to as low as $50-1/4 on October 21, 1999. The complaint asserts that BMC executives became determined to push the price up “so that they could complete the insider selling binge they began in 8/99.” Rumors circulated that BMC would report very positive results in late 10/99, and the price of the stock rose to $60-1/8 on October 28, 1999. On October 29, 2000, BMC reported that its EPS for the 2ndQ F00 was higher than indicated on 10/6/99 and in line with earlier forecasts. It issued a release stating that the strength of its flagship PATROL products had offset a “seasonally weak performance by our European operation.” Nevertheless, the complaint charges that BMC achieved such results only by reclassifying millions of dollars of legal expenses as “nonrecurring” expenses and by drawing down on $35 million in previously deferred revenue. Either Watson or Austin furthermore made the following representations to analysts on October 25-26, 1999:(1) BMC enjoyed a stellar quarter with strong demand for its core products; (2) IBM’s recent announcement of a slowdown in mainframe sales due to Y2K concerns did not indicate any reduction in demand for BMC’s products; (3) There was no slowing of demand for BMC products because of Y2K concerns; (4) Despite unexpected disruption caused by the integration of Boole & Babbage and New Dimension, particularly in Europe, the integration of sales force was nearly complete and European operations would improve; (5) European sales execution now met BMC’s standards and better European performance was expected in the third and fourth quarters of F00; (6) the European sales problem was an execution issue and did not reflect any fundamental problem with BMC’s European operations or demand for its products in Europe; and (7) BMC expected third and fourth quarter F00 EPS of $.53-$.54 and $.59-$.60, for an F00 EPS of at least $1.93. On November 1, 1999, Watson told securities analysts, money managers, and institutional investors at the Deutsche Banc Alex. Brown 1999 Technology Conference that BMC was satisfied with the previous third quarter F00 EPS forecast of $.53, that execution issues with the sales force in the 2ndQ F00 had largely been resolved, that the integration of BMC, Boole & Babbage, and New Dimension was successful, and that he was “bullish” on the outlook for BMC’s 3rdQ F00 and beyond. Lead Plaintiffs contend that Defendants knew that these statements made between 10/29/99-12/17/99 were false or misleading for the same reasons it cited for statements made between July 29 and September 20,1999. On January 4, 2000, BMC stock rose as high as $85-1/8 before closing at $77, as rumors spread that BMC would make a negative announcement. The next day, before the market opened, BMC disclosed that its 3rdQ F00 results would be substantially worse than projected due to serious problems with its sales force, a failure to close several large deals, a lack of large mainframe software transactions that had caused a major revenue shortfall, customer refusals to purchase due to Y2K worries, and serious weakness in its European operations. BMC’s stock plummeted to $47 on a volume of 60 million shares and continued to fall the next day to $41-1/4 on a volume of 42 million shares. After these partial disclosures, according to the amended complaint, Defendants continued to mislead the market about the demand for BMC mainframe products and to artificially inflate the value of BMC stock. A report issued by S.G. Cowen Securities, Inc. on January 7, 2000, after discussions with Watson and Austin, stated, “Management claimed to see no slowing in mainframe capacity demand.” On January 25, 2000 BMC disclosed its poor 3rdQ F00 results, i.e., EPS of only $.41, far below forecasted levels and a decline from 3rdQ F99 and 2ndQ F00 EPS, with revenues of $426 million, $50 million below forecasts. Its DSOs increased to 86 from 84 at the end of the 2ndQ F00. Several top sales executives and managers were fired. During a conference call with analysts, Watson remarked, “Shame on us.” Watson conceded that in eighteen months BMC had tripled its sales force so that 60% of its sales representatives were new to BMC or the companies it had acquired, and that the sales force execution “has caused us great stress as a company,” while the new sales staff constituted “a huge transition.” Yet on January 25, 2000 Watson still claimed, “During the third quarter, the company faced an unusual set of challenges — some of which we believe were unique to this quarter and therefore behind us .... ” During a conference call that same day and in subsequent conversations with analysts, Watson stated that with respect to IBM’s anticipated MIPS growth, “we think we are okay” and that “the underlying fundamentals of [BMC’s] business are very strong.” On April 25, 2000, BMC surprised analysts by announcing a positive fourth quarter earnings of $.49 a share, $.02 above the Street estimate, and a 23% increase in revenues from the previous year, to $476 million. That same day Watson and Austin during a conference call with analysts were positive about prospects for the next quarter and the remaining fiscal year. Watson commented that they expected to see “margin improvement” and growth of new business segments and that BMC had addressed and overcome the problems plaguing the company during the third quarter. Austin also was optimistic about an earnings increase and claimed, ‘We’re in so much better shape ... not only in closing the fourth quarter but ... for the new year.” Watson further indicated that even if IBM business slowed, it would not adversely affect the company because new business would offset the lag. He further stated that BMC had experienced a “spectacular rebound.” Austin also appeared on CNN that same day and stated, “[0]ur traditional business, our mainframe business, is very strong and is very profitable .... [We] really bounced back this quarter after somewhat of a disappointing third quarter, but as we look to our future we set expectations to be in excess of a 20 percent growth company both top line and bottom line .... ” The next day, based on BMC’s representations, its stock was upgraded by a number of analysts. By April 28, 2000, the stock price jumped to nearly $47 per share from $87 per share prior to the statements on April 25, 2000. On June 18, 2000, Defendants met with institutional investors in Boston, Massachusetts and affirmed that Street estimates of $.45-$.46 a share were on target. The next day CIBC analyst Melissa Ei-senstat reported that Austin had told her that Information Technology budgets for its customers were “huge” and that several $10 million deals had already closed. The amended complaint asserts that these statements made between January 5, 2000 and June 18, 2000 were false and misleading when made for the following reasons. BMC was continuing to experience customer resistance to purchasing mainframe computer software systems. In January 2000, BMC sales representatives requested and were given a meeting with BMC’s Director of Marketing, William Kate (“Kate”), and told him of their continued inability to make sales. Kate, in a regularly scheduled meeting with Gardner and other individual Defendants, informed them of these concerns. Furthermore, IBM mainframe/MIPS sales continued to decline, as they had done on a year-over-year basis for the last several quarters. Defendants allegedly were aware of this slowdown because BMC management communicated regularly with IBM, as Austin disclosed in an interview on Radio Wall Street on October 10, 1999, although Plaintiffs provide no specifies about information allegedly exchanged or when and between or among whom, and because IBM’s slowdown necessarily translated into lowered demand for BMC mainframe software systems. BMC knew that customers were delaying purchases of mainframe software from BMC because they were anticipating purchasing forthcoming versions of IBM’s mainframe, with IBM’s MIPS cycle facing obsolescence and a new cycle expected to be released in late 2000. Furthermore, because during 1998 and 1999 customers had purchased ahead extra MIPS capacity for their computer systems in preparation for possible Y2K problems, they had not additional need for further mainframe computer capacity during 2000. Finally, Defendants allegedly knew or recklessly disregarded that there would be a slowdown in initial product license fees from new customers and upgrade fees from customers for added MIPS capacity because customers were not purchasing MIPS. On July 5, 2000, BMC disclosed preliminary earnings far below analysts’ expectations, i.e., IstQ F01 earnings between $.18-$.21 a share, in contrast to previous estimates of $.46 a share. BMC estimated that its revenues for the IstQ ending 6/30/00 would be in the range of $365 million to $375 million, less than half the analysts’ estimates. BMC further projected that its net earnings would be between $47-51 million. On that same day, Business Wire reported that Watson blamed these bleak earnings on a shortfall in mainframe license revenues, the same aspect of BMC’s business that Austin had two months previously proclaimed to be “very strong and very profitable.” Subsequently, the price of BMC stock plunged from $35 per share to $22, by approximately 40%, a new 52-week low. Watson admitted, “We’ve got a lot of work to do.” On July 25, 2000, BMC admitted that its profits fell 53%, or $.20 a share, in the three months ending 6/30/00. During a conference call with analysts, Watson conceded that BMC expected revenues generated from mainframe products to decline further by 10%-20%. After BMC announced its IstQ F01 earnings, the price of BMC’s stock fell below $20 and it became the second worst performing stock in the Standard & Poor’s 500 index that year. The amended complaint provides charts (at pp. 28-33) to demonstrate alleged insider trading by individual Defendants, who sold 1,364,215 shares at artificially inflated prices for more than $75.4 million, out of line with their prior trading practices. During the Class Period, Austin sold 31% of his total shares; Watson sold 13%; Wilson sold 81%; Van Duyn sold 71%; Soldier sold 70%; Klausmeyer sold 68%; Beauchamp sold 53%; Morse sold 40%; Morris sold 28%; and Weiss sold 27%. The amended complaint insists that the PSLRA’s safe harbor for forward-looking statements does not apply here because none of the statements, including the oral ones, is identified as forward looking or that actual results “could differ materially from those projected,” nor were they accompanied by meaningful cautionary statements identifying important factors that might result in materially different results. Moreover, at the time such statements were made, the speakers knew the statements were false and because the statements were authorized and/or approved by a BMC executive officer who knew they were false. The amended complaint alleges two counts under the Securities Act of 1934:(1) violation of § 10(b) and Rule 10b-5 by all Defendants; and (3) violation of § 20(a) against BMC and Watson. Plaintiffs’ Motion to Strike Pursuant to Fed.R.Civ.P. 12(f), Plaintiffs move to strike a large number of exhibits submitted by Defendants in their Appendix to their Memorandum in support of their motion to dismiss on the grounds that consideration of matters outside the pleading is improper in review of a motion to dismiss. Because resolution of this motion affects consideration of the motion to dismiss, the Court addresses it first. This Court observes that usually a court limits its review under a Rule 12(b)(6) motion to the facts stated in the complaint and any documents either attached to the complaint or incorporated into it, or it converts the motion to one for summary judgment under Rule 56, with notice to the parties and an opportunity to be heard. Fed.R.Civ.P. 12(c). The Fifth Circuit has held that in reviewing a Rule 12(b)(6) motion to dismiss a claim for securities fraud on the pleadings, the district court may take judicial notice of and consider the contents of relevant public disclosure documents that are required by law to be filed with the Securities Exchange Commission (“the SEC”) and are actually filed with the SEC, with the restriction that these documents may be considered only for the purpose of determining what statements they contain and not for proving the truth of their contents. Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017-18 (5th Cir.1996), citing and adopting rule of Kramer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir.1991). The Court may also consider documents “integral to and explicitly relied on in the complaint,” - that the defendant appends to his motion to dismiss, as well as the full text of documents that are partially quoted or referred to in the complaint. Phillips v. LCI Intern., Inc., 190 F.3d 609, 618 (4th Cir.1999); Harris v. Ivax Corp., 182 F.3d 799, 802 n. 2 (11th Cir.1999); San Leandro Emergency Med. Group Profit Sharing Plan v. Philip Morris Cos., 75 F.3d 801, 808-09 (2d Cir.1996). If the plaintiff fails to attach a public document upon which he relies to his complaint, the defendant is entitled to produce such a document in support of a motion to dismiss if the document is integral to the complaint. Id. at 809. The Court may also take judicial notice of stock prices and documents of public record. Hausberg v. CompUSA, No. 3:94-CV-1151-H, 1995 WL 811960, at *9, 1995 U.S. Dist. LEXIS 20333, at *31 n. 14 (N.D.Tex. Oct. 30, 1995); Davis v. Bayless, 70 F.3d 367, 372 n. 3 (5th Cir.1995). Here Plaintiffs specifically challenge the chart compiling data that purportedly represents percentages of stock shares sold by Defendants during the Class period and at similar time periods for the three previous years (Ex. C — 1), which Plaintiffs claim is distorted. They further contest documents purporting to be transcripts from five BMC conference calls with analysts. Exs. A-18, A-21, A-26, A-29. Third, Plaintiffs object to Exhibits C-2 through C-12, Forms 3, 4, and 5 of various Defendants as unauthenticated and inadmissible hearsay improperly used to rebut Plaintiffs’ allegations of insider trading. Finally Plaintiffs object to documents filed by BMC with the SEC between 1996-2000. Some (Exhibits A-19, A-24, A-27, and A-30) were filed during the Class Period, but most were filed either before or after the Class Period (A-2 through A-16, and C-13 through C-16). Plaintiffs emphasize that none of the submissions is referenced in the Consolidated Amended Complaint, they object to the authenticity of the documents, they argue that Defendants improperly attempt to use some to contest Plaintiffs’ pleading allegations, and they charge that Defendants improperly ask the Court to consider several for the truth of the matter asserted in them. Plaintiffs point out that an adjudicative fact cannot be judicially noticed unless it is “not subject to reasonable dispute in that it is ... capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.” Fed.R.Evid. 201(b). Because accuracy of the chart of stock sales (Ex. C-l) is disputed, Plaintiffs maintain that the Court cannot take judicial notice of it. They note that Defendants suggest that the chart is a matter of public record, from BMC’s SEC filings, without any authentication or supporting documentation. Ex. C-l, n.l. More important, insist Plaintiffs, since the chart is not “capable of accurate and ready determination,” Fed.R.Evid. 201(b), and because it is hearsay, Plaintiffs urge the Court to strike it. If the Court accepts the documents, Plaintiffs claim that they have a right to discovery under the PSLRA. 15 U.S.C. § 78u-4(b)(3)(B)(mandatory stay of discovery may be lifted “to prevent undue prejudice”). In response, Defendants maintain that this Court has already rejected such arguments in denying a motion to strike filed by the same lawyers in In re Landry’s Seafood Restaurants, Inc. Sec. Litig., H-99-1948, slip op, at 60 (S.D.Tex.2001). The PSLRA requires dismissal of allegations that lack a basis, i.e., factual support. Plaintiffs wrongly argue that because they chose not to attach or name many of the SEC filings on which their allegations are based, Defendants cannot use those filings to test Plaintiffs’ allegations. Defendants disagree and insist that they can use relevant documents to further the purpose of the PSLRA, i.e., dismissal of frivolous cases at the earliest stage of the litigation. See, e.g., Sturm v. Marriott Marquis Corp., 85 F.Supp.2d 1356, 1366 (N.D.Ga.2000)(“The district courts cannot fulfill their gatekeeping role if plaintiffs are free to quote selectively or out of context from documents that they rely upon, and avoid further examination of the documents by not attaching them to the complaint”); Bryant v. Avado Brands, 187 F.3d 1271, 1278 (11th Cir.1999); In re Burlington Coat Factory, 114 F.3d 1410, 1426 (3d Cir.1997)(consideration of relevant documents precludes plaintiffs from “main-tainting] a claim of fraud by extracting an isolated statement from a document”; “Plaintiffs cannot prevent a court from looking at the texts of documents on which its claim is based by failing to attach or explicitly cite them.”). Courts may routinely consider not just documents named in Plaintiffs’ complaint, but even documents that, if not named, are “pertinent,” “central” or “integral to [Plaintiffs’] claim.” Bryant, 187 F.3d at 1281; Landry’s Seafood, Mo, H-99-1948 at 3, n.8; Sturm, 85 F.Supp.2d at 1356. The Fifth Circuit recognizes the incorporation-by-reference doctrine. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir.2000)(“ ‘Documents that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiffs complaint and are central to her claim.’ ”); Lovelace, 78 F.3d at 1018 (even if not attached, court can consider “documents ... incorporated in the complaint”); 5 Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 1327 at 762-63 (2d ed,1990)(“when [a] plaintiff fails to introduce a pertinent document as part of his pleading, [a] defendant may introduce the exhibit as part of his motion attacking the pleading”). As for Plaintiffs’ specific challenges, Defendants point out that in response to allegations that Defendants’ stock trading practices reflect scienter under the motive and opportunity doctrine, to be discussed later, Forms 3, 4, and 5 are the only publicly filed documents that reveal holdings and transactions involving the BMC stock held by each individual Defendant and the only documents upon which Plaintiffs’ allegations can be based. Thus because Plaintiffs relied on these documents and because they are integral to determining whether Plaintiffs allegations give rise to a strong inference of scienter, they are incorporated by reference even though they are not mentioned in the amended complaint. In re Silicon Graphics, Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir.1999)(rejecting motion to strike and approving consideration of Form 3 and 4 filings where a complaint contained insider trading allegations but failed to name filings as source). Therefore, since the documents are relevant to Plaintiffs’ allegations of scienter, the Court may consider these documents under the incorporation-by reference doctrine and may take judicial notice of them because they were required to be and were actually filed with the SEC under SEC rules under penalty of perjury. As for the chart, Exhibit C-l, Defendants point out that it is verified by counsel’s signing the memorandum, was included only for the court’s convenience as a summary of information included in SEC filings attached to the memorandum (Forms 3, 4, and 5 filed by each individual Defendant, Exs. C-2 though C-12), and the trading information contained in the 1997-2000 proxy statements filed by BMC with the SEC. Under Fed.R.Evid. 1006, this summary chart may be included because the underlying documents are also submitted for consideration by the Court and thus not hearsay. The transcripts are also incorporated by reference in select statements from each conference call included in the amended complaint. Moreover, because these conference calls included forward-looking statements accompanied by meaningful cautionary statements identifying risk factors, relevant under the PSLRA’s safe harbor provision, 15 U.S.C. § 78u-5(c)(l), to be discussed infra, under 15 U.S.C. § 78u-5(e)(“On any motion to dismiss based upon subsection (c)(1) of this section, the court shall consider any statement cited in the complaint and any cautionary statement accompanying the forward-looking statement, which are not subject to material dispute, cited by the defendant”), the Court must consider the transcripts. Furthermore, the court reporter’s certificate attached to the transcripts, attests to their accuracy and authenticity. Finally, although Defendants argue that public filings made prior to the Class Period are irrelevant, the Fifth Circuit case on which they rely, in which the court specifically considered disclosures from the defendant’s 1991 and 1992 prospectuses to defeat the plaintiffs claim of nondisclosure of business risks during the class period from October 1993 to May 1994, undermines Defendants’ contentions. Lovelace, 78 F.3d at 1017, 1019-20. Because the Court fully concurs with Defendants’ arguments, the Court denies Plaintiffs’ motion to strike. Defendants’ Motion to Dismiss (# 73) Charging that the amended complaint pleads fraud by hindsight and constitutes the kind of strike suit abuse that the PSLRA was intended to combat by imposition of stringent pleading requirements, Defendants emphasize that the PSLRA requires Plaintiffs (1) to identify each allegedly misleading statement and provide reasons why it is misleading; (2) if Plaintiffs’ allegations are based on “information and belief,” they must state with particularity all the facts on which that belief is based; and (3) Plaintiffs must state with particularity facts giving rise to a strong inference that Defendants acted with the required state of mind for each act or omission alleged to have violated the statute. 15 U.S.C. § 78u-4(b)(l)-(2). If Plaintiffs fail to satisfy any of these requirements, the court must dismiss the suit. 15 U.S.C. § 78u-4(b)(3). As its first ground for dismissal, Defendants emphasize that the amended complaint fails to allege with any particularity that nine of the eleven individual Defendants made any representations or participated in any way in the alleged scheme to defraud. Moreover the amended complaint only eonclusorily alleges that Defendants’ scienter was based on their executive positions, their involvement in day-to-day management of BMC’s business, their access to internal corporate documents, conversations with corporate officers and employees, and their attendance at management and Board meetings. Lirette v. Shiva Corp., 27 F.Supp.2d 268, 283 (D.Mass.1998)(finding that “inferences that the defendants by virtue of their positions within the company, ‘must have known’ about the company problems when they undertook the allegedly fraudulent actions ... are precisely the types of inferences which this court, on numerous occasions, has determined to be inadequate to withstand the special pleading require-merits in securities fraud cases”); Branca v. Paymentech, Inc., No. Civ. A. 3:97-CV-2507-L, 2000 WL 145083, *10-11 (N.D.Tex. Feb. 8, 2000)(“AJIegations that party knew or should have known that false representations were being made by virtue of his position within a company are, as a matter of law, insufficient to plead scienter.”). Plaintiffs must allege what actions each Defendant took in furtherance of the alleged scheme and specifically plead what he learned, when he learned it, and how Plaintiffs know what he learned. McNamara v. Bre-X Minerals Ltd., 57 F.Supp.2d 396, 423 (E.D.Tex.1999)(dis-missing claim where statement attributed to group without any basis). Thus claims against Defendants Gardner, Beauchamp, Morse, Weiss, Wilson, Morris, Van Duyn, Klausmeyer, and Solcher should be dismissed pursuant to Fed.R.Civ.P. 9 and the PSLRA. Second, Defendants urge that Plaintiffs have failed to satisfy the PSLRA’s particularity requirements. Because BMC’s stock price did not steadily increase over the Class Period, Plaintiffs have merely lumped public statements by or about BMC into three smaller periods (July 29-September 20, 1999; October 26-December 17, 1999; and January 5-June 18, 2000) and follow each with a laundry list of “true but concealed facts.” They fail to show which of the statements are misrepresentations and to specify the reasons why they are false or misleading or how they relate to the “true but concealed facts.” The three paragraphs delineating “true but concealed facts” never quote from or refer to any internal reports or documentation and never provide any factual support for the oral statements to management alleged by Plaintiff on information and belief. Third, Defendants maintain that the complaint does not provide the factual basis for Plaintiffs’ allegations based on information and belief, but only conclusory assertions. It does not refer to or cite any internal reports or documentation to support Plaintiffs’ alleged “true but concealed facts,” which lack sufficient indicia of reliability to satisfy the PSLRA. Fourth, Defendants assert, the amended complaint fails to allege facts giving rise to a strong inference that Defendants intended to deceive, manipulate or defraud anyone. 15 U.S.C. § 78u—4(b)(2); In re Paracelsus Corp. Sec. Litig., 61 F.Supp.2d 591, 595 (S.D.Tex.1998) (“Scienter is ‘a mental state embracing intent to deceive, manipulate or defraud.’”) (citing Ernst & Ernst v. Hochfelder, 425 U.S. 185, 193, 96 S.Ct. 1375, 47 L.Ed.2d 668 (n.12) (1976)). There are no details as to what Defendants knew, when and how they knew it, and the basis for Plaintiffs’ allegations. Nor does the amended complaint demonstrate that they knew their statements were false when made. Instead the complaint merely alleges fraud by hindsight, i.e., because BMC’s stock price dropped, Defendants must have known it would occur beforehand. Conclusory allegations that they had the requisite scien-ter based on their executive positions at BMC, their involvement in day-to-day management of its business, their access to internal corporate documents, their conversations with corporate officers and employees, and their attendance at management and Board meetings are insufficient; they need to provide details about alleged negative internal reports, when they were prepared, who prepared them, their content, the sources from whom plaintiffs obtained such information, etc. Coates v. Heartland Wireless Communications, Inc., 26 F.Supp.2d 910, 921 (N.D.Tex.1998). Furthermore, Plaintiffs allege scienter based on the motive and opportunity test which at least four Circuit Courts of Appeal and two district judges in the Southern District of Texas have rejected. Moreover, the scope and timing of Defendants’ stock sales are not sufficient to give rise to a strong inference of scienter. In particular, the sales by Watson and Austin, the only Defendants who made statements challenged by the amended complaint, are clearly not suspicious or out of line with their earlier selling practices, and sales by the others are not relevant. Fifth, Defendants argue, the amended complaint fails to state a legally actionable claim. Defendants cannot be held liable for any of the following: alleged misstatements rendered immaterial by BMC’s own prior disclosures; alleged misstatements consisting solely of vague and optimistic statements of opinion about BMC’s future performance; alleged misstatements made by independent stock analysts that BMC did not control; and alleged misstatements expressing management’s beliefs and expectations about the company’s future performance that fall within safe harbor rules governing forward-looking statements. Finally, Defendants urge, because the amended complaint fails to state a cause of action for securities fraud as a primary liability claim under Section 10(b) of the Exchange Act or Securities and Exchange Commission Rule 10b-5, Plaintiffs’ secondary control person liability claim under Section 20(a) of the Exchange Act against BMC and Watson also fails. Abbott v. Equity Group, Inc., 2 F.3d 613, 619-20 (5th Cir.1993) (to prevail on a claim under § 20(a) of the Exchange Act, plaintiff must establish an underlying violation of the federal securities laws), cert. denied, 510 U.S. 1177, 114 S.Ct. 1219, 127 L.Ed.2d 565 (1994). Defendants also challenge the “true and concealed facts,” vaguely stated by Plaintiffs as allegedly rendering BMC’s public statements false, on the grounds that the pleading of these facts fails to satisfy the PSLRA’s requirements of particularity, factual basis, and strong inference of scienter. For instance, in the context of conclusory allegations that BMC encountered problems in integration of the sales forces of Boole & Babbage and New Dimension with its own sales force, Plaintiffs charge fraud in Defendants’ statements that the integration was proceeding swiftly and was “about done.” Vague, loose optimistic allegations that amount to little more than corporate cheerleading are “puffery,” projections of future performance not worded as guarantees, and are not actionable under federal securities law because no reasonable investor would consider such vague statements material and because investors and analysts are too sophisticated to rely on vague expressions of optimism rather than specific facts. Krim, 989 F.2d at 1446; Raab, 4 F.3d at 289. The PSLRA’s safe harbor provisions would also protect most of these statements. Furthermore, BMC’s public warnings about risk factors affecting its prospects, contained in public filings, stock analysts’ reports, and conference calls, render immaterial the alleged misstatements. Atkins v. Hibernia Corp., 182 F.3d 320, 326 (5th Cir.1999)(where a public document fully discloses information material to the allegedly concealed matter, dismissal is appropriate under Rule 12(b)(6)). For instance, BMC publicly stated that integration of the three entities’ sales forces was challenging and was taking more time to complete than integration of their products. See, e.g., Ex. A-21, Transcript of Oct. 6, 1999 Conference Call, at 18-19; A-ll: Form S-4 Registration Statement (filed Nov. 13, 1998) at 13; Ex. A-14: Amended 10-Q Report Third Quarter Fiscal 1999 (filed Feb. 24, 1999); Ex. A-13: Amended 10-Q Report for Second Quarter Fiscal 1999 (filed Feb. 22, 1999), at 21. Early disclosures were later supplemented. A-16: 10K Annual Report for Fiscal 1999 (filed June 28, 1999) at 33. Observing that Plaintiffs have conclusor-ily alleged that animosity between employees of pre-acquisition BMC and those of Boole & Babbage and New Dimension caused sales turnover to increase and “seasoned” salespersons to depart from BMC, Defendants emphasize that no details are provided about the alleged animosity, such as where, when, between whom, and whether management ever knew. Even if the allegations were true, BMC disclosed in press releases from July 1999-January 2000 that there was a danger of corporate culture clash and a risk that key personnel might leave. In its SEC filings BMC often indicated that it could lose and had lost key personnel during integration of the acquisitions. Ex. A-27 at 19. Analyst reports cited by Plaintiffs also demonstrate that the investing public was well aware that the integration was negatively affected by “turf wars” in Europe. Exs. B-4 at 12-13; Ex. B-2; Ex. B-l. Furthermore, the analysts continued to indicate concern about integration even after BMC announced its fourth-quarter fiscal 2000 rebound. B-6. Plaintiffs’ conclusory allegation that BMC’s sales people were inadequately trained and ineffective with no information regarding how much training and/or experience BMC salespersons had in prior quarters, how BMC’s experience and training compared with the industry average, or how these factors affected its revenues. Such information is necessary to show that this “fact,” if proven, would show that BMC’s public statements were inaccurate. Plaintiffs also assert that BMC had “very significant problems” integrating the sales forces of the acquisitions, that it “had lost the control of its ability to manage” sales forecasting and execution, and that multiple sales people calling on the same customer would lead to “complaints, confusion and refusals to purchase.” Yet the amended complaint fails to name even one customer who refused to purchase BMC products or who complained about its sales people. It provides no numbers of customers involved, what kinds of customers were subject to sales contracts, whether those sales contracts related to the same products, or, most significant, how much potential revenue was attributable to affected customers. The amended complaint further states that the alleged animosity among employees of the acquired entities and those of BMC created high turnover and loss of key personnel. Yet it fails to identify the increase in turnover or any of the sales people who purportedly left the company. Nor does the complaint indicate how any of these adverse facts came to light, how Defendants leaned about them, or whether Defendants made any statements after learning about them. Simply because BMC subsequently acknowledged sales force difficulties or because analysts later blamed poor sales results in the third quarter of FY00 on these problems does not give rise to an inference that any individual Defendant had forewarning of these problems or their likely effect. “[C]orporate mismanagement does not, standing alone, give rise to a 10b-5 claim, and meas culpa does not sufficiently satisfy the scienter requirements of pleading in securities fraud cases ...Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1070 (5th Cir.1994). Similarly, argue Defendants, Plaintiffs’ allegations about Defendants’ indefinite and vague representations that the demand for BMC products was strong or very strong, despite investors’ knowledge that BMC faced competition, awareness of the nationwide fear of the Y2K bug, and awareness that the industry giant, IBM, was facing an uncertain marketplace, should also be dismissed. They are too vague and incomplete to be material or to induce reliance, not to mention being offset by other disclosures. These statements lack the detail necessary to support a fraud claim and raise no inference of fraud. Nor are Plaintiffs’ conclusory allegations about BMC’s ability to close large deals actionable. BMC repeatedly disclosed its dependence on large sales transactions and the impact of reduced demand for mainframe capacity on its financial results. Before and during the Class Period, BMC’s press releases disclosed its dependence on large enterprise license transactions with customers likely to purchase capacity-related upgrades. Exs. A-17 at 3; A-20 at 2; A-22 at 3; Ex. A-25 at 3; A-28 at 3. It reiterated that “continued demand for significant additional mainframe MIPS capacity” was a significant risk factor affecting operating results. See Ex. A-28 at 3. It also persistently admonished that a slowing in demand for large-scale computing power could have negative impact on its financial results. Ex. A-16 at 17; A-27 at 12, 17-18; A-24 at 13, 21; Ex. A-19 at 12-13; A-16 at 17, 28, and many others. Plaintiffs have asserted that unnamed sales representatives from an unidentified region in January 2000 demanded and had a meeting with director of marketing Bill Kate about their inability to make sales and that Kate then advised them at a meeting not identified by time or place. The minimal detail fails to satisfy the PSLRA. There is no information about how many sales people came to the meeting, whether the meeting concerned individual sales difficulties or company-wide problems, long-term trends or short-term issues, and what effect, if any, the alleged inability to effect sales would have on BMC’s revenues. Indeed the vague allegations could refer to a small gathering of two sales people complaining about a temporary lack of product brochures. Nor is there anything but a conclusory statement that the individual Defendants were aware of the meeting. More significant, its lack of even cursory allegations of materiality fails to give rise to an inference that any individual Defendant’s public statements were unrealistic or misleading in view of whatever information developed at the January meeting. It is impossible to tell whether any Defendant issued a statement at odds with any information that he might have received at the meeting. Plaintiffs provide no links between the meeting and any allegedly fraudulent statement, or any showing that any statements were misleading. Furthermore, despite allegations that BMC tried to hide the competitive challenge posed by Computer Associates, BMC regularly disclosed the increasing competition, beginning with a press release in July 1999 and continuing in BMC’s third-quarter report and its 10-K for FY00. Exs. A-17 at 3; A-27 at 17-18; A-16 at 9-10. Moreover, the analysts cited by Plaintiffs in their amended complaint discussed the risks posed by competition in their reports. Ex. B-4, B-2. Furthermore, the amended complaint lacks the specific detail required by the PSLRA regarding fraud relating to the effect of competition. Plaintiffs fail to allege how many, if any, BMC customers defected and the effect on BMC or whether any BMC internal reports support an allegation that Defendants were suppressing the truth about competition. Defendants also insist the Y2K allegations should be dismissed because BMC repeatedly disclosed the risks associated with these issues and because Plaintiffs fail to allege facts with particularity and to create a strong inference of scienter, as required by the PSLRA. The same is true of allegations that BMC concealed the negative impact on demand for BMC products caused by a slowdown in IBM’s mainframe sales and by IBM’s decision to introduce a new generation of its mainframe platform. Defendants maintain that BMC frequently advised the market of the important role IBM played in BMC’s success, that BMC derived from 64-70% or its revenues from products for IBM-compatible mainframes during this period (Exs. A-30; A-27; A-24; A-19; A-16), that BMC products in essence were improved versions of IBM products that were also subject to displacement (Exs. A-16; A-15; A-7; A-3), and that IBM’s technological changes and pricing actions could adversely affect BMC’s business (Exs. A-16; A-15; A-7; A-3; A-30; A-27; A-24; A-19; A-14; A-13; A-12; A-10; A-9; A-8; A-6; A-5; A-4). Defendants also contend that Plaintiffs have provided no factual basis for their allegations that BMC had material nonpublic information about IBM’s sales or development plans or their purported effect on BMC’s sales. Moreover, Defendants note that the danger that troubles at IBM would adversely affect BMC was well known in the market, as was the fact of a slowdown in IBM sales. If anything, Plaintiffs’ allegations do not sound in fraud; at best they suggest that BMC mistakenly thought it could overcome IBM’s difficulties. The amended complaint targets Watson’s public statement on November 3, 1999 that he was “comfortable” with the consensus analysts’ estimate that BMC would post earnings per share of $.53 in the third quarter. Such statements have been routinely found by courts to be non-actionable puffery because they are soft expressions of optimism and not a guarantee of performance, especially where plaintiffs fail to plead specific adverse information that was available to defendants before the statement was made. See, e.g., Malone v. Microdyne Corp., 26 F.3d 471, 479-80 (4th Cir.1994); Pacheco v. Cambridge Tech. Partners (Mass.), Inc., 85 F.Supp.2d 69, 80-81 (D.Mass.2000); In re Healthcare Compare Corp. Sec. Litig., 75 F.3d 276, 282 (7th Cir.1996). The same is true of statements that BMC’s business performance was “better than expected” or the management is “encouraged” or “pleased” with business conditions. BMC also regularly disclosed in press releases and in quarterly SEC filings the uncertainties in forecasting its sales results because of its dependence on large transactions and the fact that most BMC customers wait until the end of a quarter to make their software purchases. Exs. A-17; A-20; A-22; A-25; A-28; A-16; A-30; A-27; A-24; A-19; A-14; A-13; A-12; A-15; A-10; A-ll; A-9; A-8; A-7; A-6; A-5; A-4; A-2. It also disclosed that its stock price was based almost completely on current expectations of sustained future revenue and earnings growth rates and thus its stock value would be negatively impacted by negative forecasts. Exs. A-16; A-30; A-27; A-24; A-19; A-14; A-13; A-12; A-15; A-10; A-ll; A-9; A-8; A-7; A-6; A-5; A-4; A-3; A-2. Plaintiffs have complained that after BMC announced its positive fourth quarter FY2000 results, Defendants misleadingly attempted to assert that BMC’s troubles had been temporary and are behind it, and that the company was in much better shape and optimistic. Because BMC again failed to meet analysts’ earnings estimates in the first quarter of fiscal 2001, Plaintiffs contend that BMC’s optimistic statements after its 4Q00 success were fraudulent, but fail to allege any facts that would show BMC’s statements were fraudulent. Similarly vague expressions of optimism about the future in trying times have been held to be not material, mere puffing, and not actionable under federal securities laws. In re CompUSA Inc. Sec. Litig., Civ. No. 3:94-CV-1151, 1995 WL 811960, *4 (N.D.Tex. Oct.30, 1995); In re Browning-Ferris Indus. Inc. Sec. Litig., 876 F.Supp. 870, 897 (S.D.Tex.1995); Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1219 (1st Cir.1996). Others see them as forward looking and protected by the PSLRA’s safe harbor provision. Harris v. Ivax Corp., 182 F.3d 799, 805 (11th Cir.1999); Karacand v. Edwards, 53 F.Supp.2d 1236, 1251-52 (D.Utah 1999). Plaintiffs also charged that because of its sales force difficulties, BMC had “lost control of ... it ability to accurately forecast sales or EPS on a quarterly basis” and that because of its dependence on closing large sales at or near the end of a quarter, BMC knows its forecasted earnings were “unreliable and incorrect.” Defendants point to Plaintiffs’ failure to plead any specific internal data or information that would even suggest that BMC made public statements based on forecasts they knew to be inaccurate or unreliable. As for allegations that BMC concealed weaknesses in the European market not due to seasonal factors, sales force integration issues, and problems in maintaining consistent revenue growth in Europe, Defendants point to disclosures of such on a regular basis. Exs. A-16; A-27; A-24; A-19; A-30; A-14; A-13; A-9; A-8; A-7; A-12; A-15; A-10; A-ll. They also emphasize the lack of specificity in Plaintiffs’ pleadings, in particular allegations as to how weak European revenues were compared to expectations, links between any European shortfall and the adverse results experienced in the third quarter of fiscal 2000 or the first quarter of fiscal 2001, what non-seasonal factors were responsible for alleged European shortfall. Defendants insist that even if the amended complaint met pleading requirements, the alleged false and misleading public statements listed by Plaintiffs are too vague to be actionable and are immaterial in light of BMC’s substantial public disclosures and publicly-filed documents before the statements were made. They include forward-looking predictions and goals as well as innocuous expressions of optimism. The majority are paraphrased or excerpted from reports of independent stock analysts that BMC did not control. Plaintiffs have pled no facts demonstrating that Defendants exercised control over any of the analysts’ comments. Raab, 4 F.3d at 288 (Defendants are not responsible for comments of independent analysts that they do not control and have no duty “to police statements made by third parties for inaccuracies, even if the third party attributes the statement” to a Defendant); In re Stratosphere Corp. Sec. Litig., 66 F.Supp.2d 1182, 1199-1200 (holding that Defendants are liable only for analysts’ reports they “adopt” by entangling themselves with the report through endorsement or approval thereof); In re Health Management Sys., Inc. Sec. Litig., No.