Full opinion text
MEMORANDUM OPINION AND ORDER ST. EVE, District Judge. Plaintiffs commenced this action against Defendants alleging violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange. Act”), 15 U.S.C. § 78j(b), Rule 10b-5 promulgated thereunder, the Investment Advisers Act of 1940, 15 U.S. §§ 80b-6 and 80b-15, and various state law claims. Plaintiffs base their claims on an alleged fraudulent investment scheme carried out by Defendants through a Bahamian mutual fund called M.J. Select Global Fund, Ltd. Defendants have moved to dismiss this securities fraud amended complaint pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6) and 9(b). They also seek to dismiss Plaintiffs’ federal securities law claims for failure to comply with the mandates of the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(b). As discussed in detail below, the motions are granted in part and denied in part. BACKGROUND Plaintiffs allege that Defendants engaged in a complex scheme to defraud Plaintiffs out of over $24 million. They contend that Defendants orchestrated an elaborate scheme to defraud ZCM and other investors out of millions of dollars by fraudulently inducing Plaintiffs to invest in highly risky and illiquid funds, while defrauding Plaintiffs into believing that they were actually investing in an extremely safe and liquid fund. I. The Parties Plaintiff Zurich Capital Markets Inc. (“ZCM Inc.”) is a Delaware corporation and was one of the world’s largest custodians of hedge funds. (R. 15-1, Am. Comply 21.) Plaintiff ZCM Matched Funding Corp., a Delaware corporation, (“ZCM MFC”) is a wholly owned subsidiary of ZCM Inc., and specializes in the offering and sale of derivative instruments. {Id. ¶ 24.) Plaintiff ZCM Bermuda is a Bermuda corporation and an affiliate of ZCM Inc. that operates as a holding company for offshore investments. {Id. ¶ 22.) Plaintiff ZCM Asset Holding Company LLC (“ZCM Asset”) is a Delaware corporation and a wholly owned subsidiary of ZCM Inc. that operates as a holding company for offshore investments. {Id. ¶ 23.) (collectively, the Plaintiffs are referred to as “ZCM.”) A. The Coglianese Defendants Defendant Michael Coglianese (“Coglia-nese”) is a certified public accountant licensed under the Illinois Public Accounting Act. {Id. ¶ 25.) Defendant Michael Coglianese, CPA, PC is an Illinois professional corporation of which Coglianese is the President, Secretary and sole owner. {Id. ¶ 26.) Gina Coglianese, Coglianese’s wife, is a bookkeeper. {Id. ¶ 31.) Defendant CCS Financial Services, Inc. f/k/a Commodity Compliance Services, Inc. (“CCS Inc.”), is an Illinois corporation controlled by Coglianese. Gina Coglianese is the President and sole record owner of CCS, Inc. {Id. ¶ 27.) Defendant Commodity Compliance Services, International, Ltd. (“CCS Int’l”) is a Bahamian corporation organized by Coglianese, David Lunn and John Burrows. {Id. ¶ 28.) (collectively, MC C.P.A., CCS Inc., and CCS Int’l are referred to as the “Coglianese Accounting Entities”). Defendant GLC Services, Corp., a/k/a GLC Services, Inc. f/k/a CCS Financial Services, Inc. (“GLC Services”) is an Illinois corporation engaged in the business of making investment referrals for a fee and selling modified Microsoft software products. {Id. ¶ 30.) Gina Coglianese is the President and Secretary of GLC Services. {Id. ¶ 31.) (collectively, the Court refers to these Defendants as the “Coglianese Defendants”). B. The Oceanic Defendants Defendant Oceanic is the administrator, registrar, and transfer agent of M.J. Select, with its principal place of business in the Bahamas. {Id. ¶ 32.) ZCM alleges that Oceanic transacted business through its agents in Illinois, and had systematic and continuous contacts with Illinois. {Id.) Defendant Terah Rahming, a citizen of the Bahamas, was a director of M.J. Select and was employed by Oceanic as the Manager of the Funds Department. (Id. ¶ 33.) ZCM alleges that Rahming transacted business through her agents in Illinois and had systematic and continuous contacts with Illinois. (Id. ¶ 33.) Defendant Kenneth Clowes, also a citizen of the Bahamas, was a Director of M.J. Select and the Chief Operating Officer of Oceanic. (Id. ¶ 34.) ZCM alleges that he transacted business through his agents in Illinois, and had systematic and continuous contacts with Illinois, in his role as M.J. Select Director and Oceanic’s Chief Operating Officer. (Id. ¶34.) (Collectively, Oceanic, Rahming and Clowes, are referred to as the “Oceanic Defendants.”) (Id. ¶ 35.) C. The Yorisek Defendants Defendant Vorisek & Company LLC is an Illinois limited liability company. (Id. ¶ 36.) Defendant Jeffrey Allen Vorisek; a certified public accountant licensed under the Illinois Public Accounting Act, founded Vorisek & Co. (Collectively, the Court refers to Vorisek and Vorisek & Co. as the ‘Vorisek Defendants”). (Id. ¶ 37.) D. The Landmark Defendants Defendant Reims Limited (“Reims”) is a Bahamian corporation owned .by David Lunn, a citizen of the Bahamas and employee of the New World Group. (Id. ¶¶ 43, 44.) Lunn incorporated Reims on or about February 20, 1998. (Id.) Reims’ directors were Ambassador Directors Limited, followed by Marcus Mahy and other officers or directors of Landmark Bermuda or its affiliated law firm. (Id.) Defendant Millennium Fund I, Ltd. (“Millennium”) is a foreign investment company organized by David Lunn under the laws of the Commonwealth of the Bahamas. From its February 27, 1998 incorporation until approximately April 2000, Millennium’s principal place of business was that of its administrator, Landmark Monaco in Monte Carlo, Monaco. (Id. ¶ 40.) From April 2000 to at least November, 2003, its principal place of business was located in Bermuda. Defendant Global Arbitrage Development Limited (“GAD”) is a foreign investment company, originally organized' under the laws of the British Virgin Islands in 1995, and re-organized in or about February 2001 under the laws of the Commonwealth of the Bahamas. (Id. ¶ 39.) Ambassador Directors Limited and then John Caseley and Ian Ledger served as its directors. (MV 39.) Defendant Landmark Management, S.AM. (“Landmark Monaco”) is the successor-in-interest to New World Trust Corporation, NWT Gestión S.A.M. (“New World Monaco”), and provides administrative services to various off-shore funds including GAD and Millennium. (Id. ¶ 45.) Defendant Landmark Trust (Bermuda) Limited (“Landmark Bermuda”) provides administrative services to various off-shore funds including Millennium and Reims with its principal place of business in Bermuda. (Id. ¶ 48.) ■ Defendant Ambassador Directors Limited (“Ambassador”) is a present or former director of GAD and Millennium. Defendants Caseley, Ledger and/or Mahy were its directors. (Id. ¶ 50.) Defendant John Caseley is a citizen and resident of Monaco. (Id. ¶ 46.) He is a principal of Landmark Monaco and former employee of the New World Group. Case-ley also serves as a director of GAD, and a present or former director, principal, agent or representative of Millennium. (Id. ¶ 46.) Defendant Ian Ledger is a citizen and resident of Monaco. He serves as the President of Landmark Monaco, a director of GAD and a present or former director, principal, agent or representative of Millennium. (Id. ¶ 47.) Defendant Marcus J. Mahy (“Mahy”) is a citizen and resident of Bermuda. He is the President and Managing Director of Landmark Bermuda, and a director of Millennium and Reims. (Id. ¶ 49.) (Collectively, Defendants Reims, Millennium, Mahy, Landmark Bermuda, Caseley, Ambassador, Ledger and Landmark Monaco are the “Landmark Defendants.”) II. M.J. Select Global, Ltd. (“MJ.Select”) On February 3, 1994, Coglianese sent a letter to Lunn directing him to form M.J. Select as a multi-unit fund, with minimum capitalization, and to provide directors for M.J. Select. (¶ 81.) As a result, on approximately February 7, 1994, M.J. Select was incorporated, at the direction of Coglia-nese, under the International Business Companies Act of the Commonwealth of the Bahamas. (Id. ¶82.) Initially, two corporations served as M.J. Select’s directors. (Id. ¶ 83.) In 1999, Rahming and Clowes served as M.J. Select’s directors. (Id.) Asset Allocation Fund, L.P. (“Asset Allocation”) was M.J. Select’s first and largest investor. (Id. ¶ 94.) Martin James Capital Management, Inc. (“Martin James”) served as the general partner of Asset Allocation. (Id. ¶ 77.) Martin Alla-mian, a personal friend and business associate of Coglianese, was the sole owner and principal of Martin James. (Id. ¶77.) Martin James also invested two other partnerships under its control — M.J. Diversified Fund, L.P. (“MJD”) and M.J. Financial Arbitrage, L.P. (“MJFA”) — in M. J. Select. (Id. ¶ 94.) Plaintiffs allege that Coglianese essentially directed and ran M.J. Select. They contend that M.J. Select’s administrator and directors forwarded the majority of requests for fund information to Coglianese. Coglianese, in turn, sometimes instructed them how to respond to the request (including telling them not to respond) and sometimes responded himself. (Id. ¶ 95.) Furthermore, Coglia-nese approved all transfers of funds into and out of M.J. Select’s bank account at Barclays Bank in the Bahamas. (Id. ¶ 96.) Similarly, he instructed Oceanic regarding the amount and timing of funds transfers, including accounting fees to CCS, management fees to Martin James, administrative fees to Oceanic, and investments made by M.J. Select in various funds. (Id. ¶ 97.) In approximately March 1996, at Coglianese’s direction, the Vorisek Defendants were retained, at Coglianese’s direction, to audit M.J. Select. (Id. ¶¶ 76, 97.) A. The 1994 Offering Memorandum Plaintiffs allege that Coglianese, on behalf of himself, the Coglianese Accounting Entities, Delta, GAD, and their officers, directors and administrators, together with Martin James, created the offering documents for M.J. Select, including the Offering Memoranda and the accompanying subscription and redemption documents. (Id ¶ 84.) Specifically, on November 25, 1994, Coglianese and Martin James promulgated M.J. Select’s Offering Memorandum (the “1994 Offering Memorandum”). (Id. ¶ 85.) In that document, they represented that: (1) Rawson Trust, as Administrator, Registrar and Transfer Agent would have responsibility for M.J. Select’s daily business affairs; (2) M.J. Select’s objective was to “achieve long term capital appreciation utilizing investment advisers that would trade security options, bonds, mutual funds, and related investments applying a ‘market neutral’ trading approach utilizing arbitrage trading strategics;” (3) Global Arbitrage Development, Ltd. would serve as M.J. Select’s initial trading adviser; (4) M.J. Select’s shares were “redeemable by Shareholders at the Net Asset value per Share as of the end of any month with 15 days prior written notice to the Fund;” and (5) Martin James would “select and allocate the Fund’s trading assets among the trading advisers ... and continuously monitor and analyze the performance and trading characteristics of current and prospective advisers.” (Id. ¶ 85.) Although the 1994 Offering Memorandum represented that M.J. Select initially would invest only in GAD and would engage in “market neutral” trading, ZCM alleges that Coglianese directed and caused M.J. Select to invest in other funds, including Delta, Millennium, Dominion, Sovereign, VC Capital Advantage, and Worldmark One. (Id. ¶ 98.) Dominion, Sovereign and V.C. Advantage, according to ZCM, were Reg D and/or highly illiquid venture capital funds, not “market neutral” funds as represented in M.J. Select’s Offering Memorandum. (Id. ¶ 99.) Plaintiffs allege that Coglianese directed and controlled the investments in M.J. Select in order to profit from the undisclosed management and incentive fee sharing agreements that he had negotiated. (Id. ¶ 101.) B. The Transfer Agency Agreement In approximately March 1995, M.J. Select entered into an Administration, Registrar & Transfer Agency Agreement with New World. The parties supplemented that agreement on September 24, 1997. Collectively, these agreements are referred to as the “ART Agreement.” (Id. ¶ 89.) Coglianese reviewed, negotiated and approved the terms of the ART agreement in Illinois. (Id.) Under the ART Agreement terms, New World agreed to act for the benefit of M.J. Select’s investors as Administrator, Registrar and Transfer Agent. (Id. ¶ 90.) In this position, New World assumed various duties, including the redemption of shares upon request. With Coglianese’s approval, Defendant Oceanic acquired New World and assumed all of its rights, duties and obligations under the ART Agreement and the Offering Memorandum, effective May 1, 1998. (JcLh 92.) C. The 2000 Offering Memorandum On approximately April 1, 2000, a subsequent version of M.J. Select’s Offering Memorandum was issued (the “2000 Offering Memorandum”). (Id. ¶ 102.) The 2000 Offering Memorandum represented that M.J. Select’s “shares are redeemable by shareholders at the net asset value per share as of the end of any Calendar Quarter with thirty (30) days prior written notice to the Fund. Each shareholder shall be paid the amount of its redemption as soon as practicable following the effective date of the redemption.” (Id. ¶ 102(a).) It further represented that Martin James would “continuously monitor and analyze the performance and trading characteristics” of M.J. Select’s trading advisers, that M.J. Select’s investment strategy was to engage in “market neutral” arbitrage techniques, and that M.J. Selects shareholders could obtain its net asset value on a daily basis. (Id. ¶ 102.) Plaintiffs allege that the statements in the 2000 Offering Memorandum were fraudulent because Coglia-nese controlled M.J. Select and its investment activities. They further allege that M.J. Select invested its capital in highly risky funds, rather than market neutral, safe and liquid funds as the M.J. Select documentation and Coglianese represented to M.J. Select’s investors. Plaintiffs further allege that Coglianese carried out this scheme to defraud because New World, Rawson and Oceanic, as M.J. Select’s administrators, gave Coglianese unfettered discretion in running M.J. Select, without properly supervising him. III. ZCM Invests in MX Select, MJD and MJFA In May 2000, ZCM MFC agreed to provide Asset Allocation with leveraging for Asset Allocation’s investments' through a derivative instrument known as a call option transaction. (IT 106.) Under the call option, Asset Allocation’s return was linked to the performance of a “Reference Portfolio,” or a group or basket of hedge funds selected by Martin James. ZCM MFC contributed $2 for every $1 contributed by 'Asset Allocation to the transaction. Upon termination of the transaction, if the Reference Portfolio’s value exceeded the amount contributed by ZCM MFC (plus interest), Asset Allocation had the right to acquire the value of the Reference Portfolio in exchange for payment of ZCM MFC’s contribution amount plus interest. (Id. ¶ 106.) ZCM MFC agreed to accept an assignment of Asset Allocations’ interests in various investments, including M.J. Select, MJD and MJFA, as an initial premium payment to acquire the option transaction only if Martin James, Oceanic (M.J. Select’s administrator at the time) and an independent accountant of MJD and MJFA provided ZCM MFC with written confirmations that they would recognize these assignments and ZCM MFC as the sole owner of 100% of the interests in these entities formerly held by Asset Allocation. (Id. ¶¶ 109, 110.) In response, Coglianese arranged for Rahming to sign the confirmation on behalf of M.J. Select and Oceanic. Furthermore, on or about May 31, 2000, Coglianese, as President of CCS Financial Services, signed two assignment confirmation letters. (Id. ¶ 111.) He signed one confirmation letter for MJD and one for MJFA. Each of these letters provided that he would recognize ZCM MFC as the sole owner of 100% of the shares of MJD and MJFA that were invested under the name of Asset Allocation, as of June 1, 2000. (Id. Exs. 2 & 3.) Plaintiffs allege that Coglianese knew that the representations in these letters were false. They contend that Coglianese was not the President of CCS, that neither he nor CCS served as accountants for or had any oversight over MJD or MJFA, and that neither he nor CCS had any intention of insuring that ZCM was recognized and treated as the sole owner of the MJD and MJFA partnership interests. (Id. ¶ 112.) Based on the assignment confirmations and the representations in the Offering Memoranda, ZCM MFC accepted an assignment of Asset Allocations interests in M.J. Select, MJD and MJFA and permitted the inclusion of these interests in the Reference Portfolio as Eligible Interests (the “Option Transaction”). (Id. ¶ 114.) ZCM MFC’s investments in M.J. Select, both direct and through MJD and MJFA, constituted 32.55% of the Reference Portfolio. (Id. ¶ 114.) ZCM maintained its interests in M.J. Select, MJD and MJFA and acquired additional interests based on the representations in the assignment confirmations and the representations made in the Offering Memoranda. (Id. ¶ 115.) ZCM MFC subsequently assigned its interests to ZCM Asset and ZCM Bermuda. (Id. ¶ 115.) Plaintiffs allege that the Coglianese Defendants issued false financial statements to M.J. Select’s shareholders. (Id. ¶ 137.) They further allege that the Vorisek Defendants issued fraudulent audited financial statements confirming the results on the financial .statements from the inception of the fund through year-end 2000. (Id. ¶ 138.) IV. ZCM’s Requests for Redemption The value of M.J. Select, MJD and MJFA substantially decreased in or before April 2001. In April-2001, ZCM issued requests to Martin James, as general partner of MJD and MJFA, to fully redeem its interests in MJD and MJFA. (Id. ¶ 122.) Martin James liquidated ZCM’s interests in MJD and MJFA, but failed to transfer the proceeds to ZCM. (Id. ¶ 123.) Instead, ZCM alleges that Martin James transferred $7.45 million of the redemption proceeds to Asset Allocation’s bank account, and paid approximately $5 million of these proceeds to Asset Allocation’s limited partners, even though neither Martin James nor Asset Allocation had any right to these funds. (Id. ¶ 123.) ZCM further alleges that Coglianese and CCS Inc. falsely represented that they were independent accountants with supervisory powers over MJD and MJFA. Instead, ZCM alleges that Martin James exercised sole and exclusive control over ZCM’s limited partnership interests in M.J. Select, MJD and MJFA, which enabled Martin James to convert them to its own use and the benefit of Asset Allocation and its shareholders. (Id. ¶ 126.) ZCM Bermuda also contends that it instructed Defendant Oceanic, M.J. Select’s administrator,' to redeem its positions in various accounts in 2001. Oceanic failed to do so, and instead, according to ZCM, honored subsequently submitted redemption requests on behalf of Coglianese’s and Martin James’ friends, family and business associates. (Id. ¶¶ 127-130.) V. The 2001 Complaint In August 2001, ZCM commenced a lawsuit in the Northern District of Illinois premised on violations of federal securities laws. See ZCM v. Martin James Allami-an, et al., 01 C 6250 (N.D.I11.2002) Plaintiffs sued various entitled allegedly involved in the scheme, including Oceanic, M.J. Select, MJD, MJFA, Martin James, and Martin Allamian. For a discussion of the facts in that case, as well as those in a companion case, 766347 Ontario Ltd., et al. v. Zurich Capital Markets, Inc., et al., (02 C 3223), see 766347 Ontario Ltd. v. Zurich Capital Markets, Inc., 249 F.Supp.2d 974 (N.D.I11.2003), and ZCM Asset Holding Co. (Bermuda) Ltd. v. Allamian, 2002 WL 31870162, *1 (N.D.Ill.Dec.20, 2002). ANALYSIS On November 7, 2003, ZCM filed an eighteen count complaint against Defendants. ZCM filed an Amended Complaint on DeCémber 1, 2003. Counts I, II and IV allege securities fraud violations, in violation of Section 10b and Rule 10b-5 of the Exchange Act. Count I is against the Cog-lianese Defendants, Count II is against Coglianese and Rahming, and Count IV is against Delta, GAD, Millennium and Sonic. Counts III and V allege control person liability in violation of Section 20(a) of the Exchange Act. In Count III, ZCM names Rahming, Clowes, and Oceanic as Defendants. The allegations in Count V are against Defendants Lunn, Reims, Landmark Bermuda, Mahy, Landmark Monaco, Caseley, Ledger, and Ambassador. Count VI alleges a violation of Sections 206 and 215 of the Investment Advisers Act of 1940, 15 U.S.C. §§ 80b-6 and 80b-15, against Delta, GAD, Millennium, and Sonic. Counts VII though XVIII are based on state law violations. Count VII alleges a violation of the Illinois Securities Law of 1953, 815 Ill. Comp. Stat. 5/12-13, against Defendant Oceanic. In Count VIII, ZCM alleges that Coglianese, CCS Inc., Gina Coglianese, Rahming, Clowes, and Oceanic committed common law fraud under Illinois law. Count IX alleges a conspiracy to defraud against all Defendants, and Count X alleges unjust enrichment against all Defendants. Count XI is based on conversion against Defendant Oceanic. In Count XII, ZCM alleges breach of the M.J. Select Subscription Agreement and Administration, Registrar & Transfer Agency Agreement against Defendant Oceanic. Count XIII alleges intentional interference with contract against Oceanic and Rahming; and Count XIV alleges breach of fiduciary duty against Defendants Coglianese, the Coglianese Accounting Entities, Oceanic, Rahming, Clowes, Lunn, Delta, Millennium, Mahy, GAD, Caseley, Ambassador Directors Limited, Ledger, Landmark Monaco, and Landmark Bermuda. ZCM alleges in Count XV that Defendants Coglianese, CCS Inc., CCS International, Vorisek and Vorisek & Co. committed accounting malpractice. Count XVI is premised on breach of contract against Coglianese, CCS Inc., Oceanic, Vorisek and Vorisek & Co. Counts XVII and XVIII are based on Bahamian law. ZCM asserts both counts against Defendants Oceanic, Rahming, and Clowes. ' The Coglianese Defendants have moved to dismiss the Amended Complaint in its entirety. The Vorisek Defendants have moved to dismiss the claims against them on the ground that ZCM does not have standing to assert them, the statute of limitations has run, ZCM cannot assert state claims based on pre-investment reliance on the audit reports and Plaintiffs have failed to state a claim for unjust enrichment. The Landmark' Defendants also have moved to 'dismiss the complaint in its entirety. 1. Legal Standard The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal sufficiency of a complaint, not the merits of the case. Triad Assocs., Inc. v. Chicago Hous. Autk, 892 F.2d 583, 586 (7th Cir. 1989); Majchrowski v. Norwest Mortgage, Inc., 6 F.Supp.2d 946, 952 (N.D.I1I.1998). When considering a motion to dismiss pursuant to Rule 12(b)(6), the Court considers “whether relief is possible under [any] set of facts that could be established consistent with [the] allegations.” Bartholet v. Reishauer A.G. (Zurich), 953 F.2d 1073, 1078 (7th Cir.1992). The Court views all the facts alleged in the complaint, as well as any reasonable inferences drawn from those facts, in the light most favorable to Plaintiff. Stachon v. United Consumers Club, Inc., 229 F.3d 673, 675 (7th Cir.2000). Dismissal of a complaint is appropriate only where it appears beyond doubt that under no set of facts would the plaintiffs allegations entitle him to relief. Hishon v. King & Spald-ing, 467 U.S. 69, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). The Complaint, however, must allege that each element of a cause of action exists in order to withstand a motion to dismiss. Luden v. Preiner, 967 F.2d 1166, 1168 (7th Cir.1992). Furthermore, a plaintiff “cannot satisfy federal pleading requirements merely by attaching bare legal conclusions to narrated facts which fail to outline the bases of their claims.” Collins v. Snyder, No. 02 C 4493, 2002 WL 31749173, at *1 (N.D.I1. Dee.2, 2002) (citations and quotations omitted). II. The Statute of Limitations for Federal Securities Fraud Claims The Coglianese Defendants and the Landmark Defendants seek to dismiss ZCM’s federal securities claims as barred by the statute of limitations. If a “plaintiff pleads facts that show its suit [is] barred by a statute of limitations, it may plead itself out of court under a Rule 12(b)(6) analysis.” Whirlpool Fin. Corp. v. GN Holdings, Inc., 67 F.3d 605, 608 (7th Cir. 1995) (affirming district court’s dismissal of federal securities fraud claim on inquiry notice issue). “[BJecause the question of whether a plaintiff had sufficient facts to place it on inquiry notice of a claim for securities fraud is one of fact, it may be ‘inappropriate for resolution on a motion to dismiss under Rule 12(b)(6).’ ” Kauthar SDN BHD v. Sternberg, 149 F.3d 659, 669-70, (citing Marks v. CDW Computer Centers, Inc., 122 F.3d 363, 367 (7th Cir. 1997)). A. The Sarbanes-Oxley Act On July 30, 2002, Congress enacted the Sarbanes-Oxley Act. Section 804 of the Sarbanes-Oxley Act provides, in pertinent part: “a private right of action that involves a claim of fraud, deceit, manipulation, or contrivance in contravention of a regulatory requirement concerning the securities laws, as defined in section 3(a)(47) of the Securities Exchange Act of 1934 (15 U.S.C. § 78c(a)(47)), may be brought not later than the earlier of— (1) 2 years after the discovery of the facts constituting the violation; or (2) 5 years after such violation.” 28 U.S.C. § 1658 (emphasis added). The Coglianese Defendants and the Landmark Defendants argue that Counts I, II and III are time barred by the two-year statute of limitations. B. Accrual Because it is often difficult for a plaintiff to know that he or she has been the victim of securities fraud until years after the commission of the fraud, the statute of limitations for federal securities fraud claims commences under the doctrine of “inquiry notice.” Fujisawa Pharmaceutical Co., Ltd., v. Kapoor, 115 F.3d 1332, 1334 (7th Cir.1997). Under inquiry notice, the two-year “statute of limitations applicable to suits under Rule 10b-5 begins to run not when the fraud occurs, and not when the fraud is discovered, but when (often between the date of occurrence and the date of the discovery of the fraud) the plaintiff learns, or should have learned through the exercise of ordinary diligence in the protection of one’s legal rights, enough facts to enable him by such further investigation as the facts would induce in a reasonable person to sue within a year.” Id., citing Law v. Medco Research, Inc., 113 F.3d 781, 785 (7th Cir. 1997). For inquiry notice, more than “merely suspicious circumstances” must exist. Fujisawa, 115 F.3d at 1337. “The facts constituting such notice must be sufficiently probative of fraud — sufficiently advanced beyond the stage of a mere suspicion, sufficiently confirmed or substantiated — not only to incite the victim to investigate but also to enable him to tie up any loose ends and complete the investigation in time to file a timely suit.” Id. at 1335. One important factor courts consider in determining when the statute of limitations begins is a party’s ease of access to evidence that would trigger an appropriate inquiry. See Marks v. CDW Computer Centers, Inc., 122 F.3d 363, 368 (7th Cir. 1997). Additionally, “[t]here must also be a suspicious circumstance to trigger a duty to exploit the access; an open door is not by itself a reason to enter a room.... How suspicious the circumstance need be to set the statute of limitations running ... will depend on how easy it is to obtain the necessary proof by a diligent investigation aimed at confirming or dispelling the suspicion.” Id. at ;1335 (emphasis in original). The Coglianese Defendants and the Landmark Defendants argue that the ZCM Plaintiffs were on inquiry notice of their federal claims against them before November 7, 2001. Given that ZCM filed this suit on November 7, 2003,- Defendants contend that the two year statute of limitations expired before ZCM filed this suit. Defendants rely heavily on ZCM’s August 14, 2001 lawsuit against M.J. Select and others. They also cite ZCM’s June 30, 2001 redemption, request, ZCM’s alleged creditor status as of June 30, 2001, the Coglianese July 2001 account and financial statements reflecting a write-down, the August 1, 2001 letter from Oceanic and Rahming, and the M.J. Select directors’ September 9, 2001 liquidation petition as evidence of ZCM’s inquiry notice. Defendants argue that under Whitlock Corp. v. Deloitte & Touche, L.L.P., 233 F.3d 1063, 1065 (7th Cir.2000), the statute of limitations for the federa] securities fraud claims commences at the same time with respect to all potential defendants. Because the August 14, 2001 lawsuit evidences Plaintiffs’ knowledge of a claim against certain defendants, Defendants here argue that Plaintiffs were on notice of their claim against all potential Defendants. In Whitlock, the Seventh Circuit held that the statute of limitations for Illinois tort claims accrues on an “injury-by-injury” basis, not a “defendanb-by-defendant” basis.. The court noted the difference in cases where “the commencement of the limitations period with respect to one injury does not start the time with respect to a different injury caused by a different -per: son through a different fraudulent means.” Id. at 1066. Defendants’ reliance on Whitlock is misplaced. Whitlock addressed the accrual law regarding Illinois tort 'claims. Federal accrual laws, however, apply to federal securities fraud claims. Ferguson v. Roberts, 11 F.3d 696, 704 (7th Cir.1993). Therefore, Whitlock is not determinative. Instead, as outlined above, Rule 10b-5 claims commence under the doctrine of inquiry notice. Contrary to the Landmark Defendants’ assertion'that all federal discovery rules are governed by the same concepts, the Seventh Circuit expressly noted in Fujisawa that “[i]n most fields [the discovery rule] refers to discovery just of the plaintiffs injury.... In the securities field it has a broader, a more generous meaning.” Fujisawa, 115 F.3d at 1336-37 (citations omitted). It is possible under the inquiry notice doctrine for a plaintiff to have notice sufficiently probative of fraud with respect to some defendants, but not all. Accordingly, the statute of limitations for securities fraud can accrue on a defendant-by-defendant basis. See Stephenson v. Deutsche Bank AG, 282 F.Supp.2d 1032, 1067 (D.Minn.2003); In re Arm Fin’l Group, Inc. Sec. Litig., 2002 WL 1586397 at *3 (W.D.Ky. July 18, 2002); Nappier v. Pricewaterhouse Coopers, LLP, 227 F.Supp.2d 263, 274 (D.N.J.2002); Great Neck Capital Appreciation Inv. P’ship v. Pricewaterhouse Coopers, LLP, 137 F.Supp.2d 1114, 1126 (E.D.Wis.2001). This defendant-by-defendant approach to accrual is particularly appropriate in a securities fraud case given the short statute of limitations period and the particularity mandates of Rule 9(b) and the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(b) (the “PSLRA”). Given that the statute of limitations accrues on a defendant by defendant basis, the Court cannot conclude as a matter of law that ZCM knew of the facts constituting the alleged violations by Defendants more than two years before they filed this case. Defendants have failed to identify any allegations of misconduct by these Defendants that would have put Plaintiffs on inquiry notice prior to this time. The Court will not impute ZCM’s notice as to the alleged involvement of other players to their notice of the participation of these Defendants. ZCM simply has not pled itself out of court. Accordingly, Defendants’ motions to dismiss Counts I, II, III, IV, V and VI as time barred are denied. III. Securities Fraud Pleading Requirements In order to state a claim for securities fraud under Section 10(b) and Rule 10b-5, Plaintiffs must allege that Defendants (1) made a false statement or omission; (2) of a material fact; (3) with scienter; (4) in connection with the purchase or sale of securities; (5) upon which Plaintiffs justifiably relied; and (6) the reliance proximately caused Plaintiffs’ damages. In re Healthcare Compare Corp., 75 F.3d 276, 280 (7th Cir.1996). These allegations must comply with both Federal Rule of Civil Procedure 9(b) and the PSLRA. A. Rule 9(b) and the PSLRA Plaintiffs’ allegations are sounded in fraud and thus the heightened pleading requirements of Rule 9(b) apply. Rule 9(b) requires that a plaintiff plead “the circumstances constituting fraud ... with particularity.” In re Healthcare Compare Corp. Sec. Litig., 75 F.3d at 281. As the Seventh Circuit has explained, “this means the who, what, when, where, and how: the first paragraph of any newspaper story.” DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir.1990). These mandates require “the plaintiff to conduct a precomplaint investigation in sufficient depth to assure that the charge of fraud is responsible and supported, rather than defamatory and extortionate.” Ackerman v. Northwestern Mut. Life Ins. Co., 172 F.3d 467, 469 (7th Cir.1999). In addition to Rule 9(b), the strict pleading mandates of the PSLRA apply to Plaintiffs’ complaint. In order to meet the PSLRA’s dictates for a securities fraud claim, “the complaint shall specify each statement alleged to have been misleading, the reasons or reasons why the statement is misleading, and if an allegation regarding the state or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed.” 15 U.S.C. § 78u-4(b)(l). In addition, under the PSLRA, “the complaint shall, with respect to each act or omission alleged to violate this chapter, state with particularity facts giving rise to a strong inference that the defendant ached with the required state of mind.” 15 U.S.C. § 78u-4(b)(2). 1. Count I In Count I, Plaintiffs allege that Coglia-nese made false statements and omissions in two May 31, 2000 assignment-recognition agreement letters that Coglianese signed in connection with the purchase and sale of MJD and MJFA limited partnership interests. Coglianese urges the Court to dismiss this count on the ground that the amended complaint fails to identify an affirmative material misrepresentation. Plaintiffs allege that Coglianese falsely-represented himself as President of CCS Inc., falsely represented that he and/or CCS Inc. was an independent accountant performing services for MJD, MJFA and Asset Allocation, failed to disclose that Martin James handled its own accounting for these entities without any independent oversight or supervision, falsely represented that Coglianese and CCS Inc. would recognize ZCM MFC as the sole owner of the MJD and MJFA securities it was purchasing from Asset Allocation, and failed to disclose that the Assignment Agreements issued by MJD and MJFA’s purported accountant were for the express purpose of misleading ZCM as to the nature of Coglianese’s relationship with Martin James, MJD, MJFA and Asset Allocation. (R. 15-1, Am.CompIJ 155.) Coglianese argues that the letters do not explicitly represent him as an independent accountant for MJFA, MJD or Asset Allocation. Plaintiffs allege, however, that they told Asset Allocation that they would only agree to accept an assignment of Asset Allocation’s interest in these funds if ZCM received written confirmations from an independent accountant representing that they would recognize the various assignments and ZCM MFC as the sole owner of 100% of the interests in MJD and MJFA. (Id. ¶ 110.) In response to this request, Coglianese signed the assignment agreements as President, CCS Financial Services, Inc., Accountant, and sent them to Plaintiffs. (Id. ¶ 111. Exs. 2 & 3). These representations caused ZCM to believe that Coglianese was an independent accountant for Asset Allocation, MJD and MJFA. (Id. ¶¶ 114, 155b, 158.) Coglianese subsequently admitted that he never served as an independent account for these entities. (Id. ¶ 113.) These factual allegations provide sufficient particularity to support Plaintiffs’ alleged misrepresentation that Coglianese falsely represented himself as an independent accountant for MJFA, MJD and Asset Allocation. Coglianese further contends that Plaintiffs do not allege that CCS ever failed to recognize ZCM MFC as the 100% owners of the interests in MJD and MJFA, as stated in the letters. In viewing the totality of the circumstances and ZCM’s allegations regarding the impact of this representation in the context of the circumstances in which Coglianese made it, this literal accuracy argument fails. See In re Neopharm, Inc. Sec. Litig., 02 C 2976, 2003 WL 262369 at *11 (N.D.Ill. Feb.7, 2003). Coglianese also contends that his admittedly false representation that he was the President of CCS Inc. was not material. Given the significance ZCM alleges it placed on an independent accountant for M.J. Select, the Court cannot make this materiality determination on a motion to dismiss. See Marks v. CDW Computer Centers, Inc., 122 F.3d 363, 370 (7th Cir. 1997) (“[a] materiality determination is rarely appropriate at the summary judgment stage, let alone on a motion to dismiss.”). 2. Count II Regarding Count II, Coglianese argues that ZCM has failed to allege particular facts that would make him liable for the alleged misstatements and omissions of the 1994 and 2000 Offering Memoranda. Regarding the 1994 offering documents, Cog-lianese contends that ZCM does not allege that it received or relied upon them. To the contrary, ZCM alleges that Coglianese and Martin James created the M.J. Select offering documents, including the Offering Memorandum and the accompanying subscription and redemption documents. (R. 15-1, Am.CompIJ 84.) They also detail the alleged misrepresentations and omissions in these documents, including that M.J. Select invested in highly illiquid funds, directly contrary to the Offering Memorandum’s representations. (Id. ¶¶ 98-99.) ZCM further alleges that it received the offering memoranda and relied on the representations in these documents. (Id. ¶¶ 114, 181 & 183.) Based on the allegations in the complaint, it is clear that ZCM’s allegations refer to both the 1994 and 2000 offering memoranda. Cogli-anese’s argument that ZCM did not invest in M.J. Select until May 31, 2000, thus any misrepresentations in the 1994 Memorandum cannot serve as the basis for his liability is belied by the allegations in the complaint. At this stage of the litigation, ZCM’s allegations regarding the 1994 Offering Memorandum satisfy the particularity mandates of the PSLRA and Rule 9(b). Coglianese further contends that the complaint fails to allege particular facts that would make him liable for the alleged misrepresentations in M.J. Select’s 2000 Memorandum. It alleges that Coglianese made various false and misleading statements through the M.J. Select Offering Memorandum. (Id. ¶¶ 170b, 170c, 170d.) These allegations sufficiently allege Coglia-nese’s responsibility for the statements. Furthermore, the Amended Complaint alleges with sufficient particularity when and how Coglianese had knowledge of the truth. (Id. ¶¶ 95-96, 98-99, 101, 175-177.) 3. The Coglianese Defendants’ Duty to Disclose Defendant Coglianese contends that ZCM’s allegations regarding fraudulent omissions fail because ZCM does not allege that Coglianese had a duty to disclose the information he allegedly omitted. Coglianese relies on Chiarella v. United States, 445 U.S. 222, 228, 100 S.Ct. 1108, 63 L.Ed.2d 348 (1980), in support of his position. In Chiarella, the Supreme Court held that “silence in connection with the purchase or sale of securities may operate as a fraud actionable under § 10(b)” when there is “a duty to disclose arising from a relationship of trust and confidence between parties to a transaction.” Id. Thus, Plaintiffs must allege that Coglianese had a duty to disclose the omitted information. Basic Inc. v. Levinson, 485 U.S. 224, 239, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988). “One way such a duty can arise is if omitting particular facts makes some existing statement misleading.” Anderson v. Abbott Laboratories. 140 F.Supp.2d 894, 903 (N.D.I11.2001) (citing 17 C.F.R. § 240.10b-5). Indeed, “[i]f one speaks, he must speak the whole truth.” Stransky, 51 F.3d 1329,1331 (7th Cir.1995). ZCM alleges that Coglianese made representations to ZCM in the Assignment Agreements and in the Offering Memoran-da, and therefore had a duty to disclose the omitted information because such information was necessary to make Coglia-nese’s statements not misleading. At this stage, these allegations are sufficient to survive a motion to dismiss. See Friedman v. Rayovac Corp., 295 F.Supp.2d 957, 988 (W.D.Wis.2003). 4. Count IV In Count IV, Plaintiffs allege that Delta, GAD, Millennium and Sonic created and made false and misleading statements and omissions of material fact in connection with the purchase and sale of M.J. Select securities. Millennium and GAD argue that the Court should dismiss Count IV against it because ZCM has failed to allege any misrepresentation or omission attributable to it. They contend that ZCM has not alleged any facts showing that Millennium and/or GAD prepared or disseminated the M.J. Select offering materials. ZCM premised Millennium’s and GAD’s liability under Count IV on an agency theory. ZCM alleges that Coglianese acted as Millennium’s agent and GAD’s agent, and therefore Millennium and GAD, as the principals, face Section 10(b) and Rule 10b-5 liability. The parties do not challenge that a principal may be liable under Rule 10b-5 for misrepresentations of its agent. Instead, Millennium and GAD argue that ZCM has not sufficiently alleged an agency relationship between Coglianese and Millennium or GAD. They contend that ZCM has failed to allege any facts to support the contention that Millennium or GAD acted as an investment adviser or trading adviser to M.J. Select. They further contend that ZCM has not alleged that Millennium or GAD'had the ability to control Coglianese regarding his actions relating to M.J. Select. . ZCM alleges that Coglianese served -as the agent of both Millennium and GAD. (R. 15-1, Am.Compl^ 51.) Plaintiffs allege that these Defendants have admitted that Coglianese served in this capacity, and that Coglianese has admitted to being their agent. (Id. ¶ 51, 68.) ZCM further alleges that Millennium and GAD retained Coglianese to act as their agent/investment adviser “whereby [Coglianese] agreed to perform due diligence on their behalf and to refer them to new investment opportunities.” (Id. ¶ 60.) The mere use of the label “agent” does not sufficiently establish an agency relationship in order to impose liability under Rule 9(b) or the PSLRA where the agency relationship and the fraud claims are intertwined. A plaintiff must plead facts showing the existence and scope of the agency relationship in order to establish primary liability under Section 10(b), especially where, as here, the agency relationship is not based on the classic corporation/employee model where a corporation can only acts through its employees and agents. See Lachmund v. ADM Investor Services, Inc., 191 F.3d 777, 783 (7th Cir.1999). Such allegations are essential to imputing Coglianese’s conduct to Millennium and GAD, and establishing Millennium’s and GAD’s primary liability for the alleged acts of Coglianese. See Adams v. NVR Homes, Inc., 193 F.R.D. 243, 250-52 (D.Md.2000) (general allegations of agency insufficient because “fail to indicate with particularity the factual predicate for the agency relationship”). ZCM’s conclusory agency allegations fail to meet this standard. 5. Millennium’s Duty to Disclose Millennium argues that ZCM has failed to allege that it had a duty to disclose. Z.CM bases its duty to disclose arguments on the alleged agency relationship between Millennium and Coglianese. Because ZCM has failed to sufficiently allege such a relationship, they also cannot establish a duty to disclose. B. Scienter Allegations Under Section 10(b), scienter is either “the intent to deceive, manipulate or defraud,” Ernst & Ernst v. Hochfelder, 425 U.S. 185, 198, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976), or the “reckless disregard of the truth” of the material asserted. S.E.C. v. Jakubowski, 150 F.3d 675, 681 (7th Cir. 1998). “Reckless conduct is, at least, conduct which is highly unreasonable and which represents an extreme departure from standards of ordinary care ... to the extent that the danger was either known to the defendant or so obvious that the defendant must have been aware of it.” Rehm v. Eagle Fin. Corp., 954 F.Supp. 1246, 1255 (N.D.I11.1997)(quotations omitted). Under the PSLRA, Plaintiffs must “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2). As the Court has previously held, a plaintiff may use “motive and opportunity” or “circumstantial evidence” to establish scienter under the PSLRA, as long as the allegations support a strong inference that the defendants acted recklessly or knowingly. 766317 Ontario Ltd. v. Zurich Capital Markets, Inc., 249 F.Supp.2d 974, 987 (N.D.I11.2003). See also Chu v. Sabratek Corp., 100 F.Supp.2d 815, 823 (N.D.I11. 2000). Plaintiffs must also make specific allegations regarding each Defendant’s scienter. Johnson v. Tellabs, Inc., 303 F.Supp.2d 941, 953 (N.D.I11.2004). Michael Coglianese contends that ZCM has failed to plead particularized facts giving rise to a strong inference that he possessed an intent to defraud, deceive or manipulate in Counts I and II. In addition, Millennium and GAD argue that ZCM has failed to plead scienter with particularity in Count IV. Each argument is addressed below. 1. Count I In Count I, ZCM has alleged that Coglianese falsely represented that he was the President of CCS Inc., and an independent accountant for MJD, MJFA and Asset Allocation. ZCM alleges that Coglianese admitted under oath that he did not serve as the President of CCS Inc. and that CCS had never served as an accountant for MJD, MJFA or Asset Allocation. Plaintiffs allege that Coglianese admitted he made these false representations to Plaintiffs at the request of Martin Allamian, who asked Coglianese to make these false statements in order to induce ZCM to purchase the MJD and MJFA limited partnership interests. (R. 15-1, Am. Comply 157.) Plaintiffs further allege that Coglianese knew that neither he, MC C.P.A. nor CCS Inc. served as the accountant for MJD, MJFA or Asset Allocation, yet the May letters were presented to ZCM as those of an independent accountant. (Id. ¶ 158.) ZCM also alleges that Coglianese has admitted that Martin Allamian told Coglianese to sign the false letters “as a personal favor to him” because ZCM MFC would not enter into the Option Transaction Agreement or purchase the securities without the letters. (Id. ¶ 159.) Additionally, ZCM alleges that Coglia-nese had a motive to defraud Plaintiffs. Namely, ZCM alleges that Coglianese knew that by inducing ZCM MFC to enter into the Option Transaction Agreement and purchase the limited partnership interests, Asset Allocation would triple its investment in M.J. Select. Given his fee sharing and referral arrangements, this increased investment enabled Coglianese and his accounting firm to realize substantial monetary gains. (Id. ¶¶ 113,160.) These allegations are sufficient to support a strong inference that Coglianese acted recklessly or knowingly. The scien-ter allegations in Count I therefore stand. 2. Count II With respect to Coglianese’s scienter in Count II, ZCM asserts that Coglianese made false and misleading statements in the M.J. Select Offering Memorandum and in connection with the purchase and sale of securities issued by M.J. Select. Contrary to the representations in the Offering Memorandum, Plaintiffs allege that Coglianese knew that M.J. Select’s assets were invested in illiquid funds and placed in high risk investments. (Id. ¶ 175.) ZCM alleges that Coglianese knew or recklessly disregarded the falsity of the misrepresentations because Coglianese had access to the relevant books and records, he personally selected certain high risk investments for M.J. Select, he instructed Oceanic and Barclays Bank to wire funds out of M.J. Selects’s bank account to the highly illiquid and risky funds, and he negotiated the fee sharing arrangements with the Southridge Entities on behalf of several related entities. (Id. ¶¶ 98-100,176.) ZCM also alleges that Coglianese’s motivation to defraud ZCM arose from the additional fees he could make through increased investments in M.J. Select. (Id. ¶ 177.) His fee sharing arrangements further increased his profits. (Id. ¶ 177.) When viewed in their entirety, ZCM’s allegations regarding Coglianese’s scienter meet the PSLRA mandates. 3. Count IV Millennium and GAD also dispute the sufficiency of ZCM’s allegations in Count IV regarding scienter. The Court agrees. As discussed above, Count IV is premised on an agency theory of liability. Because ZCM has failed to allege facts demonstrating the existence and scope of the agency relationship between Coglia-nese and Millennium or Coglianese and GAD, they have also failed to provide a basis to impute scienter under this theory. Furthermore, “[kjnowledge and actions of a corporation’s employees and agents are generally imputed to the corporation where the acts are performed on behalf of the corporation and are within the scope of their authority.” UCAR Intern., Inc. v. Union Carbide Corp., 2004 WL 137073, at *13 (S.D.N.Y. Jan.26, 2004) (citations omitted). ZCM’s allegations fail to plead with the requisite particularity a basis to impute Coglianese’s scienter to Millennium or GAD. Count IV is accordingly dismissed without prejudice. C. Loss Causation The Coglianese Defendants argue that the Court should dismiss Counts I and II because Plaintiffs have failed to plead loss causation. “To plead loss causation, the plaintiff must allege that it was the very facts about which the defendant lied which caused its injuries.” Caremark, Inc. v. Coram Healthcare Corp., 113 F.3d 645, 648 (7th Cir.1997). “[T]he requirement is straightforward: The plaintiff must allege that is was in fact injured by the misstatement or omission of which it complains.” Id. at 649. In Count I, Plaintiffs allege that Coglianese falsely represented that he was the President of CCS, that CCS served as the independent accountant for MJD and MJFA with oversight authority and that Coglianese and CCS would recognize ZCM as the sole owner of MJD and MJFA. (R. 15-1, Am.Compl.1ffl 110-112.) Plaintiffs further allege that the complete lack of oversight by an independent accountant allowed Martin James to defraud ZCM by sending it falsified financial statements that failed to disclose Martin James’ redemption ofMJD’s and MJFA’s underlying investments, and allowed his subsequent transfer of the redemption proceeds out of MJD and MJFA and into Asset Allocation. (Id. ¶¶ 121-126, 130, 143, 161, 167.) ZCM also alleges that Martin James, with the knowledge and cooperation of Coglianese, failed to honor Coglia-nese and CCS’s representations that they would recognize ZCM as the sole owner of MJD and MFA. Rather, he instructed Oceanic not to honor ZCM’s redemption requests and instead to honor subsequently submitted redemption requests on behalf of Coglianese’s and Martin James’ friends, family and business associates. (Id. ¶ 130.) In other words, ZCM alleges that Coglianese’s misrepresentation regarding ZCM’s ownership caused ZCM’s injury by allowing Martin James to disregard ZCM’s redemption requests. (Id. ¶ 130). These particularized allegations and the reasonable inferences drawn from them sufficiently allege loss causation at this stage. See Caremark, 113 F.3d at 649; Ventre v. Datronic Rental Corp., 1996 WL 681279 at *12 (N.D.I11. Nov.21, 1996) (loss causation sufficiently pled where defendant’s false statements concealed quality of management and low probability of anticipated cash distributions). Regarding Count II, the Coglianese Defendants argue that Oceanic’s failure to honor ZCM’s redemption requests caused Plaintiffs’ loss in their M.J. Select investment. Plaintiffs allege that Coglianese made false statements regarding his and CCS’s role as an independent accountant. ZCM alleges that Coglianese made specific misrepresentations about M.J. Select’s investment objectives and investment types. (R. 15-1, Am.Compl^ 170.) They also contend that Coglianese failed to disclose the existence of a discriminatory redemption policy through which insider shareholders and their affiliates received accelerated and preferential redemptions of their M.J. Select shares, that he had control over the transfer of funds, and that he stood to profit from certain investments. (Id. ¶ 170.) Plaintiffs allege that their loss in M.J. Select resulted from the very risks Coglianese failed to represent and/or falsely represented — the degree of risk associated with the investment, M.J. Select’s investments and objectives, and its redemption policy. (Id. ¶¶ 170, 181, 184.) These allegations sufficiently allege loss causation in Count II. IV. Control Person Liability — Counts III and V In Count III, Plaintiffs allege control person liability pursuant to Section 20(a) of the Exchange Act against Michael Coglia-nese, Rahming, Clowes and Oceanic. In Count V, Plaintiffs allege a Section 20(a) violation against Defendants Lunn, Reims, Landmark Bermuda, Mahy, Landmark Monaco, Caseley, Ledger and Ambassador. Section 20(a) provides: “Every person who, directly or indirectly, controls any person liable under any provision of this chapter or of any rule or regulation thereunder shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable, unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action.” 15 U.S.C. § 78t(a). In order to state a Section 20(a) claim, ZCM must allege the following: (1) a primary securities violation; (2) each of the individual defendants exercised general control over the operations of M.J. Select; and (3) each of the individual defendants “possessed the power or ability to control the specific transaction or activity upon which the primary violation was predicated, whether or not that power was exercised.” Harrison v. Dean Witter Reynolds, Inc., 974 F.2d 873, 881 (7th Cir. 1992). Because Plaintiffs’ Section 20(a) claim is one of fraud, Plaintiffs must meet the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). Johnson, 303 F.Supp.2d at 969 (N.D.I11. 2004). Plaintiffs, however, need not meet the heightened pleading requirements of the PSLRA to establish control person liability. A. Michael Coglianese Coglianese argues that the Court should dismiss Count III for failure to state a claim because ZCM has failed to allege a predicate securities fraud violation. The control person claim against Coglianese, however, is predicated on. the primary securities fraud allegation by M.J. Select as alleged in Count III, not on the alleged violations by the Coglianese Defendants. Coglianese does not challenge the sufficiency of the securities fraud allegations in Count III. Accordingly, this argument fails. Coglianese also argues that Plaintiffs have failed to plead with the requisite particularity that he had actual control over the M.J. entities. In order to allege “general control” under Section 20(a), Plaintiffs must plead that Coglianese “actually participated in, that is, exercised control over, the operations of [the entity] in general.” Harrison, 79 F.3d at 614-15. Plaintiffs allege that Coglianese created M.J. Select and agreed to “set up the fund and help manage the day-to-day affairs of the fund.” (R. 15-1, Am. Comphlffl 78, 79.) He directed the formation of M.J. Select, and it was incorporated according to his instructions. {Id. ¶¶ 81, 82.) They further assert that Cog-lianese selected M.J. Select’s administrator and Board of Directors, created and promulgated its offering documents, and negotiated and approved the Administration, Registrar & Transfer Agency Agreement. {Id. ¶¶ 81-89.) ZCM asserts that M.J. Select’s administrator and directors forwarded most information requests about the fund to Coglianese who occasionally instructed them how to respond. {Id. ¶ 95.) On numerous occasions, Cogli-anese instructed them not to respond to the inquiries. {Id.) Coglianese also approved the transfer of funds into and out of M.J. Select’s account, determined the auditor for M.J. Select, and directed M.J. Select to invest in specific funds in contradiction to the representations in the offering documents. {Id. ¶¶ 96-99, 101-102.) Plaintiffs allege that Coglianese prepared and issued account statements to M.J. Select’s shareholders. (Id. ¶¶ 137-39.) Cogli-anese also, according to the Amended Complaint, approved and directed M.J. Select’s redemption payments, including early payments. (Id. ¶¶ 141-143.) These allegations are sufficient to allege that Coglianese had general control over M.J. Select’s operations. For the first time in his reply, Coglianese argues that Plaintiffs have failed to plead that Coglianese had the power or ability to control the transaction at issue. Arguments raised for the first time in a reply, however, are waived. Luellen v. City of East Chicago, 350 F.3d 604, 612 n. 12 (7th Cir.2003). Accordingly, Coglianese has waived this argument. B. The Landmark Defendants In Count Y, Plaintiffs allege that Defendants Reims, Landmark Monaco, Landmark Bermuda, Ambassador, Caseley, Ledger and Mahy are liable as control persons of Millennium, and that Defendants Landmark, Monaco, Ambassador, Caseley and Ledger are also liable as control persons of GAD. These Defendants argue that Plaintiffs have failed to plead any of the elements of control person liability. First, because Count V fails to allege a primary violation against Millennium or GAD, ZCM has failed to meet one of the essential elements of Section 20(a) liability. Second, Defendants argue that Plaintiffs allegations of general control fail because they are wholly conclusory and do nothing more than simply recite the applicable Section 20(a) standard. They argue that Plaintiffs have not alleged that Defendants “actually participated in, that is, exercised control over, the operations of [the entity] in general.” Defendants correctly note that Plaintiffs must do more than merely allege a defendant’s title or statute in order to plead control. See Johnson, 262 F.Supp.2d at 958-59. ZCM alleges that Defendant Reims was a control person of Millennium through its role as a creator and majority owner of Millennium, its selection of the entire board of directors, its selection of the administrator and registered agent for Millennium, its role as investment manager for Millennium, and its participation in the day-to-day management and operations of Millennium. (R. 15-1, Am.Compl.1ffl 229, 230.) These allegations give more than Reims’ title. They are sufficient to allege Reims’ general control over Millennium. ZCM alleges that Defendants Landmark Monaco and Landmark Bermuda had general control over Millennium because they served as the administrator, registrar and transfer agent of Millennium. (Id. ¶ 233.) Although ZCM contends that it has detailed the duties and activities of administrators, registrars and transfer agents which would rise to the level of general control, their contention is not supported by the allegations in the amended complaint. Without more, these general allegations of La