Full opinion text
OPINION & ORDER ALGENON L. MARBLEY, District Judge. I. INTRODUCTION This case is before the Court on the Motion to Dismiss the Consolidated Amended Complaint (“CAC”) filed by Defendants, American Electric Power Company, Inc. (“AEP”), E. Linn Draper, Jr., Thomas Shockley, III, Susan Tomasky, J.M. Buonaiuto, E.R. Brooks, Donald M. Carlton, John P. DesBarres, Robert W. Fri, William R. Howell, Lester A. Hudson, Jr., Leonard Kujawa, Richard Sandor, Donald W. Smith, Linda Gillespie Stuntz, and Kathryn D. Sullivan (the “Individual Defendants,” and collectively with AEP, the “Defendants”). For the following reasons, the Motion to Dismiss is GRANTED and the Motion for Leave to file a Second Consolidated Amended ' Complaint (“SCAC”) is DENIED. Plaintiffs failed to plead Defendants’ scienter with the particularity required by the Federal Rules of Civil Procedure Rule 9(b) and the Private Securities Litigation Reform Act (“PSLRA”). Thus, dismissal of their claims under Section 10(b) and Rule 10b-5 is warranted. Because Plaintiffs fail to allege any actionable omissions or affirmatively misleading material statements, their Section 10(b) and Rule 10b-5 warrant further dismissal. This failure also provides the basis for dismissing Plaintiffs’ claim under Section 11. Finally, without any primary liability, Plaintiffs cannot state a claim under Sections 15 or 20(a) for control person liability. II. FACTS This is a federal securities class action brought under Sections 11 and 15 of the Securities Act of 1933 (the “Securities Act”), 15 U.S.C. §§ 77k and 77o; Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a); and the rules and regulations promulgated thereunder by the Securities Exchange Commission (“SEC”), including Rule 10b-5, 17 C.F.R. § 240.10b~5. The claims under the Exchange Act are brought on behalf of all persons and entities who purchased or otherwise acquired AEP common stock between February 10, 2000 and October 9, 2002, inclusive (the “Class Period”). The claims under the Securities Act are brought on behalf of all persons and entities who acquired shares of AEP common stock or AEP 9.25% equity units (“Equity Units”) in a secondary offering on or about June 5, 2002 (the “Secondary Offering”). Essentially, Plaintiffs contend that AEP and the Individual Defendants knew about or recklessly disregarded practices that the company engaged in during the Class Period and concealed the practices to cause the price of the Company’s stock to become artificially inflated. Defendant AEP is a public utility holding company that directly or indirectly owns various public utility companies operating in Arkansas, Indiana, Kentucky, Louisiana, Michigan, Ohio, Oklahoma, Tennessee, Texas, Virginia and West Virginia. Before 1997, AEP’s business consisted of AEP and its wholly-owned subsidiaries, and the company derived operating revenue by selling power from the subsidiaries’ generation facilities into the spot market, other competitive power markets, or on a contractual basis. AEP’s many subsidiaries are involved in power engineering and construction services; energy management; the operation of natural gas pipelines, natural gas storage and coal mines; and wholesale energy trading and marketing. In addition, AEP owns a service company subsidiary, American Electric Power Service Corporation (“AEPSC”), which provides accounting, administrative, information systems, engineering, financial, legal, maintenance and other services at cost to the other AEP companies. As for AEP’s wholesale energy trading venture, in 1997, AEP established another subsidiary, AEP Energy Services (“AEPES”), for the purpose of trading energy on the newly deregulated wholesale markets. Employees of AEPSC, known as “traders,” worked on behalf of AEPES to make these trades. AEPES quickly grew into one of the biggest traders in the industry, and it is undisputed that AEP touted the success of AEPES and the energy trading business to its investors throughout the Class Period. The primary government body overseeing the energy trading markets is the Federal Energy Regulatory Commission (“FERC”). The industry came under heightened scrutiny beginning in 2000-2001 because of the California Energy Crisis. In February of 2002, the FERC started investigating whether energy traders, in particular, had manipulated short-term energy prices in California and the Western United States by engaging in so-called “round-trip” or “wash” trades. Pursuant to its investigation, the FERC requested data from over 100 companies, including AEP, regarding whether the companies had engaged in such “round-trip trades,” “wash” trades, or other manipulative transactions. Accordingly, AEP undertook an internal investigation, and on May 13, 2002 and on May 30, 2002, it publicly reported that it did not engage in “round-trip” or “wash” trades, and the CAC does not allege that it did- On September 25, 2002, however, Dyne-gy, another major energy company, reported that fifteen of its employees had engaged in another type of manipulative practice — inaccurate reporting to trade publications. Trade industry publishers (the “Trade Press”), such as Platts, compile and publish daily and monthly natural gas price indices, statistics, trading volumes, and other related information in trade publications such as Inside FERC (monthly indices) and Gas Daily (daily indices). The price indices in these publications are determined, in large part, from information reported by natural gas market participants, primarily traders employed by the various energy companies. Traders provide “reports” to reporters employed by Platts, who conduct interviews, primarily via phone and facsimile, to get information regarding trades: prices, dates, volumes and sometimes the counter-parties with whom the trades were made. Once gathered, all this information, including the source, is kept confidential by Platts. Platts takes the data, “sorts prices from low to high, looks for ‘outliers’ ..., cross-checks with counterparties, and calculates descriptive statistics ... The index price is based on this analysis.” FERC Report, at III — 3. The accuracy of such data seems important because the price indices are used in determining the price of natural gas over time. Plaintiffs do not contend, however, that Platts and its publications actually set the prices. Nevertheless, prior to the Dynegy announcement, the FERC discovered that almost none of the companies within the industry had internal controls to regulate reporting. The lack of internal controls was one of the primary findings of the FERC investigation into the specific issue of false reporting. From the FERC Report, it appears that this round of the investigation began on October 22, 2002, when the FERC sent data requests to the largest natural gas marketers inquiring about their “past reporting practices, any internal procedures or controls they may have had in place; any changes they have made to those procedures; and any investigations they [had] in progress.” FERC Report, at III — 19. AEP allegedly began investigating its internal reporting procedures on October 4, 2002, shortly after the Dynegy announcement. Five days later, on October 9, 2002, AEP announced that five of the AEPES traders had reported inaccurate data to Platts between 1998— 2002. It also announced that it had dismissed the traders and instituted new internal procedures to ensure the accuracy of future reporting, including requiring the company’s chief risk officer to verify the information, and only then, report the information to trade publications. Plaintiffs do not dispute that AEP made these public disclosures, took corrective action against the employees and instituted remedial measures after October 2002. Plaintiffs, instead, dispute that AEP did not learn of the practice until October of 2002. In fact, it is the gravamen of Plaintiffs’ CAC that AEP and the Individual Defendants knew about or recklessly disregarded the practice' of inaccurate reporting during the Class Period and concealed it to cause the price of the Company’s stock to become artificially inflated. They state that the artificial inflation is evidenced by the 22% and 17% decline in the price of Common Stock and Equity Units, respectively, at close on October 9, 2002. Specifically, Plaintiffs allege that, since 1998, AEP engaged in the inaccurate reporting in an attempt to manipulate the market for natural gas. Plaintiffs contend that AEP reported false prices and volumes of natural gas trades, and, in some, cases, reported trades that never occurred. In this way, Plaintiffs argue that AEP portrayed itself as having a greater volume of trading activity in particular trading locations, which in turn moved the indices to favor AEP’s trading positions. According to Plaintiffs’ CAC, “AEP had attempted to manipulate the published price indi-ces to AEP’s advantage, and AEP traders stated that the head of AEP’s trading desk had specifically instructed them to submit the false information ... AEP had no internal procedures in place to ensure the accuracy of the reported data.” ¶ 6. Finally, Plaintiffs aver that AEP used the trade information in the publications to assess the volume of its trading business in comparison to its peers and thereafter relayed its assessments to investors in press releases and SEC filings. According to Plaintiffs, amidst the Enron scandal, “AEP issued several statements reassuring investors that AEP’s ‘longstanding conservative and risk-averse culture’ left little room for impropriety.” But, Plaintiffs contend, “as a result of AEP’s undisclosed practice of manipulating the market for natural gas, [its] common stock and Equity Units traded at artificially inflated prices at all relevant times, causing significant damages to Plaintiffs, who purchased or acquired such securities during the Class Period.” AEP does not deny that the five AEPES traders did engage in the inaccurate reporting and that before October 2002, it had no internal procedures in place to prevent inaccurate reporting. Defendants contend, however, that they were not aware that the inaccurate reporting at AEPES was taking place until October of 2002, after the internal investigation following the Dynegy announcement. Defendants argue Plaintiffs are attempting to plead “fraud by hindsight,” which is not actionable under the securities laws, making dismissal of the CAC warranted. The Court heard oral argument on Defendants’ Motion to Dismiss the CAC and the propriety of allowing Plaintiffs leave to file their SCAC, such that those issues for now ripe for decision. III. STANDARD OF REVIEW A. Standards for a Motion to Dismiss in General Cases In considering the typical Rule 12(b)(6) motion to dismiss, courts are limited to evaluating whether a plaintiffs complaint sets forth allegations sufficient to make out the elements of a cause of action. Windsor v. The Tennessean, 719 F.2d 155, 158 (6th Cir.1983). A complaint should not be dismissed “unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Lillard v. Shelby County Bd. of Educ., 76 F.3d 716, 724 (6th Cir.1996). In the usual case, the Court is required to “construe the complaint liberally in the plaintiffs favor and accept as true all factual allegations and permissible inferences therein.” Lillard, 76 F.3d at 724 (quoting Gazette v. City of Pontiac, 41 F.3d 1061, 1064 (6th Cir.1994)); see Murphy v. Sofa-mor Danek Group, Inc. (In re Sofamor Danek Group, Inc.), 123 F.3d 394, 400 (6th Cir.1997) (“All factual allegations made by the plaintiff are deemed admitted, and ambiguous allegations must be construed in the plaintiffs favor.”) (citations omitted). B. Standards for a Motion to Dismiss in Federal Securities Fraud Cases The requirements of pleading, the standard of assessment, and the scope of the court’s consideration, however, are somewhat different in securities fraud cases. See, e.g., Campbell v. Lexmark Intern. Inc., 234 F.Supp.2d 680, 682 (E.D.Ky.2002) (“[tjhough pleading standards are—as a rule—quite liberal, pleading standards are different in securities fraud cases. In such cases the standard is more rigorous ... ”). In addition to considering the allegations in the complaint, a court can consider the full texts of SEC filings, prospectuses, analysts’ reports and other documents referred to in the complaint, regardless of whether they are attached in part or whole. See Weiner v. Klais & Co., 108 F.3d 86, 89 (6th Cir.1997); In re Royal Appliance Securities Litigation, 1995 WL 490131, *2 (6th Cir. Aug.15, 1995) (unpublished); see also In re K-tel Intern., Inc. Securities Litigation, 300 F.3d 881, 889 (8th Cir.2002) (“The court may consider, in addition to the pleadings, materials ‘embraced by the pleadings’ and materials that are part of the public record.”). By considering such materials, however, the motion to dismiss is not converted into one for summary judgment. Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir.1999); In re Telxon Corp. Securities Litigation, 133 F.Supp.2d 1010, 1024 (N.D.Ohio 2000); In re SCB Computer Technology, Inc., Securities Litigation, 149 F.Supp.2d 334, 356, n. 13 (W.D.Tenn.2001). 1. Rule 9(b) Rule 9(b) of the Federal Rules of Civil Procedure requires that the fraud be plead with particularity. Rule 9(b) states: “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge, and other condition of mind of a person may be averred generally.” Fed.R.Civ.P. 9(b). To satisfy this requirement, the plaintiff must detail specifically the facts and circumstances that are claimed to constitute the defendant’s fraudulent conduct. See Advocacy Org. for Patients & Providers v. Auto Club Ins. Ass’n, 176 F.3d 315, 322 (6th Cir.1999) (quoting Coffey v. Foamex L.P., 2 F.3d 157, 161-62 (6th Cir.1993)) (plaintiff must “allege the time, place, and content of the alleged misrepresentation on which he or she relied; the fraudulent scheme; the' fraudulent intent of the defendants; and the injury resulting from the fraud”); Di-Leo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir.1990) (pleader must identify “the who, what, when, where, and how: the first paragraph of any newspaper story”). 2. Private Securities Litigation Reform Act Finally, regarding both pleading requirements and the standards of assessment, Congress changed what is required of plaintiffs alleging an Exchange Act (Section 10(b) and Rule 10b-5) violation in order to survive a motion to dismiss when it enacted the Private Securities Litigation Reform Act (“PSLRA”). Helwig v. Vencor, Inc., 251 F.3d 540, 548 (6th Cir.2001). The Sixth Circuit explained that, “[b]efore 1995, a plaintiff had to allege fraud ‘with particularity,’ [but][u]nder the PSLRA, a plaintiff must now ‘state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.’ ” Id. at 548, citing Fed.R.Civ.P. 9(b) and 15 U.S.C. § 78u-4(b)(2) (emphasis added). Whereas before, a plaintiff only had to “aver generally” the condition of mind, after the PSLRA, as with the circumstances surrounding the fraud itself, the defendants’ state of mind must be pled with particularity. In other words, “Congress heightened the pleading standard for securities fraud.” Helwig, 251 F.3d at 548. A plaintiff, moreover, is required to meet the Rule 9(b) and PSLRA standards as to each defendant against whom securities fraud is alleged. See, e.g., In re SCB, 149 F.Supp.2d at 345. Now, when assessing whether a plaintiff has offered “facts giving rise to a strong inference” of defendants’ scienter, “plaintiffs are entitled only to the most plausible of competing inferences.” Miller v. Champion Enterprises Inc., 346 F.3d 660, 673 (6th Cir.2003), citing Helwig, 251 F.3d at 553. “Thus, if certain factors are not met in the complaint—factual particularity and the most plausible of competing inferences—-‘the court shall, on the motion of any defendant, dismiss the complaint.’ ” Miller, 346 F.3d at 673, citing, 15 U.S.C. § 78u-4(b)(3)(A). Finally/in all cases, even in the typical case where the 12(b)(6) standard of review is more lenient to plaintiffs, to survive a motion to dismiss, a plaintiff must do more than make bare assertions of legal conclusions. In re Sofamor Danek Group, 123 F.3d at 400; In re DeLorean Motor Co., 991 F.2d 1236, 1240 (6th Cir.1993) (citation omitted). Conclusory statements or legal conclusions need not be considered. Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986); Morgan v. Church’s Fried Chicken, 829 F.2d 10, 12 (6th Cir.1987). A court never is “required to accept as true unwarranted legal conclusions or factual inferences,” Davis v. DCB Financial Corp., 259 F.Supp.2d 664, 669 (S.D.Ohio 2003), nor must the court “accept as true a legal conclusion couched as a factual allegation.” Telxon, 133 F.Supp.2d at 1024. See also In re Federal-Mogul Corp. Securities Litigation, 166 F.Supp.2d 559, 561 (E.D.Mich.2001) (in considering a motion to dismiss in securities fraud case, the court warned that it, “will not, however, accord the presumption of truthfulness to any legal conclusion, opinion or deduction, even if it is couched as a factual allegation.”). Under the PSLRA, a plaintiff must plead facts giving rise to a strong inference of defendant’s scienter. Helwig, 251 F.3d at 565. Complaints that are “too conclusory” properly are dismissed. Id. IV. ANALYSIS Defendants’ Motion to Dismiss Defendants argue that the CAC should be dismissed for several reasons. First, they allege that Plaintiffs fail to plead scienter with the particularity required by Rule 9(b) and the PSLRA as to any of the Individual Defendants, which further precludes Plaintiffs from making a claim against AEP. Assuming arguendo that Plaintiffs have met the scienter requirements, Defendants argue, nevertheless, that dismissal is warranted because the alleged misstatements and omissions offered in the CAC also fail as a matter of law. The statements all are either true, unrelated to the alleged omissions, mere puffery or immaterial. Plaintiffs dispute each of those contentions, and argue that even if the Court dismisses the CAC, Plaintiffs should be granted leave to amend with the SCAC. Under the securities laws, companies, and those who speak on their behalf, have a duty to disclose certain information. “There is an affirmative duty of disclosure if: (1) created by SEC statute or rule; (2) there is insider trading; or (3) there was a prior statement of material fact that is false, inaccurate, incomplete or misleading in light of the undisclosed information.” In re Ford Motor Co. Securities Litigation, 184 F.Supp.2d 626, 631-632 (E.D.Mich.2001). If a company speaks on a subject, notwithstanding a duty, it still is required to speak truthfully and to provide all information necessary to prevent its statements from being misleading. See, e.g., Stavroff v. Meyo, 987 F.Supp. 987, 993-994 (N.D.Ohio 1995) (“[i]f a corporation makes a public statement which is reasonably expected to influence the investing public, there is an obligation to disclose sufficient information to prevent the statement from being misleading.”). The securities laws and the SEC do not require, however, the disclosure of so-called “soft information.” Soft information consists of “statements of subjective analysis or extrapolation, such as opinions, motives, and intentions, or forward looking statements, such as projections, estimates, and forecasts.” Craftmatic Securities Litigation v. Kraftsow, 890 F.2d 628, 642 (3d Cir.1989). If a company does make such statements, it is not immune from the anti-fraud provisions of the federal securities laws, if it neglected to make other statements that were necessary to make the “soft information” non-misleading. Stavroff, 987 F.Supp. at 993-994. A. Elements of Plaintiffs’ Claims 1. Section 11 Securities Act Claim Plaintiffs bring a Section 11 claim, 15 U.S.C. § 77k, against AEP and the Securities Act Defendants (Count I). Under Section 11, purchasers of securities, such as Plaintiffs, can bring a claim against certain enumerated parties in a registered offering if false or misleading information was included in a registration statement. 15 U.S.C. § 77k(a). “To establish a prima facie case, a plaintiff need only show that he purchased a security issued pursuant to a registration statement and that the statement made a material misrepresentation or omission.” Picard Chemical Inc. Profit Sharing Plan v. Perrigo Co., 940 F.Supp. 1101, 1131 (W.D.Mich.1996). Plaintiffs are not required to plead scienter regarding their Section 11 claim because the Supreme Court has held that, “[liability against the issuer of a security is virtually absolute, even for innocent misstatements.” Herman & MacLean v. Huddleston, 459 U.S. 375, 382, 103 S.Ct. 683, 74 L.Ed.2d 548 (1983). 2. Section 10(b) & Rule 10b-5 Exchange Act Claim Plaintiffs bring their Exchange Act claim (Count III) against AEP and the Executive Defendants. Section 10(b) of the Exchange Act makes it unlawful -to: use or .employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors. 15 U.S.C. § 78j(b). Under Rule 10b-5, promulgated pursuant to Section 10(b), it is illegal to, “... make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading ...” 17 C.F.R. § 240.10b-5. To establish a claim under Section 10(b) and Rule 10b-5, Plaintiffs must allege, in connection with the purchase or sale of securities: 1) a misstatement or omission; 2) of a material fact; 3) made by the defendant(s), with scienter; 4) upon which Plaintiffs justifiably relied; and 5) that proximately caused Plaintiffs’ injuries. See Helwig, 251 F.3d at 554; In re Comshare, Inc. Sec. Litig., 183 F.3d 542, 548 (6th Cir.1999); Aschinger v. Columbus Showcase Co., 934 F.2d 1402, 1409 (6th Cir.1991): 3. Control Person Claims Plaintiffs’ claims under Sections 15 (Count II)20 and (a) (Count IV) are similar. Both of those statutory provisions impose secondary liability on those persons who “control” the violators of Sections 11 and 10(b), respectively. See, e.g., Cooperman v. Individual, Inc., 171 F.3d 43, 52 (1st Cir.1999) (¡‘Section 15 of the 1933 Act establishes joint and several liability for ‘controlling persons’ — that is, those who exercise control over primary violators of § 11.”). “Control person” liability, by its nature, is contingent upon a plaintiff being able to prove a primary violation under either Section 11 or 10(b). If plaintiffs do not establish the primary violations, dismissal of their corresponding control person claims would be warranted for that reason alone. B. Scienter Under Section 10(b) and Rule 10b-5 It is appropriate to address the scienter element under 10(b) and 10b-5 first because it is the lynchpin of most of Plaintiffs’ claims. Plaintiffs aver that Defendants knew or recklessly disregarded the fact that: 1) AEPES traders were reporting false information to the Trade Press, and 2) AEPES lacked internal controls to prevent inaccurate reporting. Plaintiffs’ contend, furthermore, that Defendants’ failure to provide those pieces of information when making other statements rendered the statements Defendants did make misleading. Hence, if Plaintiffs fail to plead sufficiently Defendants’ knowledge or reckless disregard of the inaccurate reporting and lack of internal controls at AEPES, Plaintiffs will be unable to establish that any of Defendants’ statements were misleading. In other words, if Defendants did not know of the inaccurate reporting and had no reason to believe that internal controls were necessary, then it cannot be said that they perpetrated a fraud on Plaintiffs in not disclosing these facts. Defendants contend that Plaintiffs have not alleged any facts from which it can be inferred that, prior to October of 2002, any Defendant knew or should have known that traders at AEPES had reported inaccurate price information to the Trade Press. Additionally, Defendants argue that Plaintiffs do not allege that any of the Individual Defendants made statements they knew were false at the time the statements were made, nor have Plaintiffs pled, with the required particularity, facts establishing a “strong inference” of recklessness. Plaintiffs retort that the “ongoing manipulations and complete lack of any internal controls to prevent such conduct ... provides strong circumstantial evidence that AEP and the Executive Defendants had actual knowledge, or recklessly ignored, the true condition of the Company’s trading operations at the time they made their materially misleading statements.” As that contention suggests, Plaintiffs’ allegations of scienter are based wholly on inferences to be drawn from circumstances and Defendants’ conduct. Plaintiffs offer no direct proof of knowledge by Defendants of the inaccurate reporting prior to October of 2002. As the Court already recognized, however, because this is a securities fraud case, Plaintiffs are not entitled to all inferences in their pleading of Defendants’ alleged scienter. As one court in this Circuit explained, [t]hough the new scienter pleading standard under the PSLRA remains somewhat nebulous, this much is clear: more — much more — is required of plaintiff in order to survive a motion to dismiss ... While under Rule 12(b)(6) all inferences must be drawn in plaintiffs’ favor, inferences of scienter do not survive if they are merely reasonable. Campbell v. Lexmark Intern. Inc., 234 F.Supp.2d 680, 683 (E.D.Ky.2002) (emphasis added). See also Helwig, 251 F.3d at 553 (noting that after the PSLRA, “plaintiffs are entitled only to the most plausible of competing inferences.”). The Sixth Circuit acknowledged that, “[t]his represents a significant strengthening of the pre-PSLRA standard under Rule 12(b)(6), which gave the plaintiff ‘the benefit of all reasonable inferences.’ ” Helwig, 251 F.3d at 553 (citation omitted). It then quoted with approval the standard adopted by the First Circuit in Greebel v. FTP Software, Inc., 194 F.3d 185 (1st Cir.1999): Congress has effectively mandated a special standard for measuring whether allegations of scienter survive a motion to dismiss. While under Rule 12(b)(6) all inferences must be drawn in plaintiffs’ favor, inferences of scienter do not survive if they are merely reasonable, as is true when pleadings for other causes of action are tested by motion to dismiss under Rule 12(b)(6). Rather, inferences of scienter survive a motion to dismiss only if they are both reasonable and ‘strong’ inferences’. Helwig, 251 F.3d at 551, quoting Greebel, 194 F.3d at 195-96 (emphasis added). “[T]he Court must indulge Plaintiffs’ inferences of fraud if ‘those inferences leave little room for doubt as to misconduct.’ ” In re Federal-Mogul, 166 F.Supp.2d at 563, quoting Helwig, 251 F.3d at 543. Moreover, to meet the scienter pleading requirements under the PSLRA, Plaintiffs are' required to adduce facts showing a strong inference of scienter; conclusory allegations will not suffice. Helwig, 251 F.3d at 565. It is important for the Court to acknowledge, moreover, that these pleading requirements put it in an unusual posture in this early stage of litigation. Normally, weighing competing inferences is an improper exercise for courts when addressing the typical Rule 12(b)(6) motion to dismiss ... This is not so, however, where, as here, the PSLRA applies. Under the PSLRA, the- pleading standard is heightened; a court is placed in the unusual role of balancing competing inferences. Campbell, 234 F.Supp.2d at 688. Thus, in considering the allegations that Plaintiffs clairii to support the “strong inference” of Defendants’ scienter, not only is it proper, but this Court is required to consider alternatives, whether suggested by Defendants or the documents referred to in the CAC, such as the FERC Report. Plaintiffs’ inferences will be credited only where they appear from all the allegations and facts before the Court to be the most plausible. To prove liability under Section 10(b), it is not enough to show that Defendants were negligent in not knowing of the information about which Plaintiffs claim Defendants should have known. The Supreme Court held long ago that, “10(b) was addressed to practices that involve some element of scienter and cannot be read to impose liability for negligent conduct alone.” Ernst & Ernst v. Hochfelder, 425 U.S. 185, 201, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976). Although the Supreme Court did not consider in Hochfelder whether reckless conduct would give rise to liability, the Sixth Circuit has determined that the scienter requirement can be met by alleging either knowing or reckless conduct by defendants. Helwig, 251 F.3d at 550. 1. Recklessness as Scienter The bar for liability due to reckless conduct, however, is high. In securities fraud cases, “recklessness” is defined as, “highly unreasonable conduct which is an extreme departure from the standards of ordinary care. While the danger need not be known, it must at least be so obvious that any reasonable man would have known of it.” Mansbach v. Prescott, Ball & Turben, 598 F.2d 1017, 1025 (6th Cir.1979); see also In re Comshare, 183 F.3d at 550; Miller, 346 F.3d at 672. Specifically, the Sixth Circuit has held that a “strong inference” of recklessness cannot be shown merely by averring generalized allegations of motive and opportunity by the defendant. See In re Comshare, 183 F.3d at 550-551 (“Under a plain interpretation of the PSLRA as informed by well-settled law on the contours of the ‘scienter’ requirement,- we hold that plaintiffs may meet PSLRA pleading requirements by alleging facts that give rise to a strong inference of reckless behavior but not by-alleging facts that illustrate nothing more than a defendant’s motive and opportunity to commit fraud.”). Nevertheless, motive and opportunity are relevant and “facts presenting motive and opportunity may be of enough weight to state a claim under the PSLRA, whereas pleading conclusory labels of motive and opportunity will not suffice.” Helwig, 251 F.3d at 551. Plaintiffs have not pled, however, anything that could lead this Court to conclude that Defendants conduct, even assuming Plaintiffs are correct, that Defendants, at the very least, should have known about the traders’ actions, was an “extreme departure from the standards of ordinary care.” In fact, in this context, it appears that the “standards of care,” albeit now in hindsight having been shown to be insufficient, were the same through the industry. Practically all the traders within the companies were doing it. In addition, it is not reasonable to infer that the dangers of the inaccurate reporting were so obvious to Defendants, when the dangers were not obvious, at all, until, in the aftermath of the California Energy Crisis, the FERC undertook investigations into what caused the Crisis. 2. Helwig Factors as Scienter Courts have struggled with exactly how much scienter is enough and what allegations satisfy the vague requirement of “strong inference.” The Sixth Circuit, fortunately, has provided guidance. In Helwig, the Court adopted the probative factors announced by the First Circuit in Greebel. 251 F.3d at 552. The Sixth Circuit offered: Lest parties be adrift in a sea of allegations, we would point to fixed constellations of facts that courts have found probative of securities fraud ... These have been enumerated as follows: (1) insider trading at a suspicious time or in an unusual amount; (2) divergence between internal reports and external statements on the same subject; (3) closeness in time of an allegedly fraudulent statement or omission and the later disclosure of inconsistent information; (4) evidence of bribery by a top company official; (5) existence of an ancillary lawsuit charging fraud by a company and the company’s quick settlement of that suit; (6) disregard of the most current factual information before making statements; (7) disclosure of accounting information in such a way that its negative implications could only be understood by someone with a high degree of sophistication; (8) the personal interest of certain directors in not informing disinterested directors of an impending sale of stock; and (9) the self-interested motivation of defendants in the form of saving their salaries, or jobs. Helwig, 251 F.3d at 552, citing Greebel, 194 F.3d at 196. While the Court qualified that, “[w]e find this list, while not exhaustive, at least helpful in guiding securities fraud pleading,” clearly a plaintiff seeking to survive a motion to dismiss should draw upon these factors. Id. Plaintiffs here, however, do not even make mention of the Helwig factors. Indeed, Plaintiffs have not plead that Defendants engaged in any of this behavior, which serves as the usual indicia of securities fraud. For example, despite emphasizing the importance of the pending case brought against AEP by the United States Commodity Futures Trading Commission (“CFTC”) for the conduct at issue here, Plaintiffs do not allege that AEP has settled that case, which if AEP had done so covertly and in haste would suggest scienter under the Helwig factors. Plaintiffs’ allegations focus on circumstances and other behavior by Defendants that allegedly show that Defendants knew or recklessly disregarded the inaccurate reporting by traders at AEPES -and the lack of internal controls. Plaintiffs attempt to make the “strong inference” of scienter with circumstantial evidence and by averments such as: the ongoing manipulations and complete lack of any internal controls to prevent such conduct, as described in ¶¶ 47-50 of the Complaint, provides strong circumstantial evidence that AEP and the Executive Defendants had actual knowledge, or recklessly ignored the true condition of the Company’s trading operations at the time they made their materially misleading statements. In ¶¶ 47-50 of the CAC, Plaintiffs rely on the FERC investigation and Report to support their claims. Such reliance, however, is misplaced. Foremost, although Plaintiffs imply throughout the CAC that the FERC investigation took place in one stage, in reality, the FERC Report, published in March 2003, was “the culmination of a yearlong effort ... to determine whether and, if so, the extent to which California and Western energy markets were manipulated during 2000 and 2001.” FERC Report, at ES-1. . The FERC’s investigation began in February 2002 with the narrow focus of investigating “round-trip” or “wash” trading. It was only after the Dynegy announcement that the FERC, on October 22, 2002, sent data requests regarding price reporting practices to the nation’s ten (10) largest gas marketers. FERC Report, at III-2. The FERC’s investigation and conclusions, then, are not probative of Defendants’ scienter before October 22, 2002 because, before then, it could not1 be said that the FERC’s investigation could or should have made the Individual Defendants aware of the inaccurate reporting. Plaintiffs contend in a footnote in their Memorandum in Opposition that, “[b]y January 2002, at the latest, the increased public scrutiny faced by the energy trading firms in the wake of the Enron scandal and its resulting collapse should have caused AEP and the Executive Defendants to determine whether AEPES had the internal controls necessary to prevent market manipulation by its traders.” Plaintiffs fail to allege, however, how the Enron scandal should have alerted Defendants to the possibility that traders in AEPES were making false reports to the Trade Press. Plaintiffs do not contend, for example, that false reporting to the Trade Press was a cause of Enron’s collapse and that such was known within the industry as early as January 2002. In addition, Plaintiffs do not allege, and the FERC did not conclude in its Report, that other companies began, as early as January 2002, assessing their internal controls for reporting to the Trade Press. To the contrary, the FERC concluded after its investigation, which took place between late October of 2002 through April of 2003, that almost none of the companies within the industry had internal controls to ensure accurate reporting. This context and these additional, facts and circumstances demonstrate why Plaintiffs cannot vaguely claim that the “FERC investigation” proves Defendants were or should have been aware of the inaccurate reporting prior to October of 2002. There is more to the “story.” As explained by the Campbell Court, Plaintiffs’ scienter allegations can be analogized to several strokes of a painting pattern that, considered alone,, jump out at the eye. But the context provided by defendants amounts to, literally, the rest of the picture. When the rest of the picture is filled in and the painting is observed as a whole, plaintiffs’ individual strokes are rendered no longer distinctive. 234 F.Supp.2d at 686. Plaintiffs, moreover, cannot equate inaccurate reporting to full-scale “market manipulation,” without explanation. If by “market manipulation” Plaintiffs are referring to “manipulation” of the price indices published by Platts, for example, Plaintiffs’ other allegations and the FERC Report, in fact, suggest that it may be impossible to determine the extent to which the inaccurate reporting by AEPES traders had an(y) effect on the published price indices. According to the CAC, “AEP, as well as other energy trading participants, reported daily and monthly natural gas prices and trade volumes to industry publications ...” ¶ 45 (emphasis added). Platts keeps the reported data and its sources confidential, however, even going so far as to assert First Amendment protection against FERC requests to provide the data and its sources. See FERC Report, at III — 4. Thus, even the FERC was unable to determine, in large part, the extent and degree of any one company’s inaccurate reporting. Adding to the causality problem is the fact that Platts takes the data it receives from these various sources and compiles it to produce the daily and monthly price indices. Plaintiffs do not purport to know how they could parse AEPES’s reporting out of those compilations. According to the FERC Report, moreover, the practice of inaccurate reporting was so widespread that the determination of any one company’s contribution to the resulting skewed price indices seems virtually impossible to discern. Plaintiffs’ claim of “market manipulation,” therefore, is pleaded inadequately and must be disregarded. Plaintiffs’ conclusory, factually-unsupported allegation that Defendants knew or should have been aware of the inaccurate reporting because of the ongoing manipulation and complete lack of internal controls also does not support the required “strong inference” of scienter. See, e.g., In re Comshare, 183 F.3d at 553 (“Although Plaintiffs speculate that it is likely that Defendants knew of the GAAP violations because they occurred over a long period of time, claims of securities fraud cannot rest ‘on speculation and conclusory allegations.’ ”) (citation omitted). 3. Red Flags & Sources of Duty as Scienter In other cases where plaintiffs have alleged that defendants should have known about some misconduct, courts have found it probative to consider “red flags” and sources of duty. See; e.g., Novak v. Kasaks, 216 F.3d 300, 308 (2d. Cir.2000) (“Under certain circumstances, we have found allegations of recklessness to be sufficient where plaintiffs alleged facts demonstrating that defendants failed to review or check information that they had a duty to monitor, or ignored obvious signs of fraud.”). Such indices of recklessness particularly are relevant in cases such as this, where Plaintiffs seek to impute conduct that occurred in a subsidiary (AEPES) to Defendants, the parent company (AEP) and its executives (Executive Defendants). In a factually similar case, plaintiffs brought suit against GE after one of its subsidiaries, Kidder, had discovered that one of its traders had engaged in a scheme to generate false profits over the course of almost three years. Chill v. General Electric Co., 101 F.3d 263, 265 (2d Cir.1996). Like Defendants here, once Kidder discovered the trader’s scheme, it informed GE and the trader was fired; but class actions ensued, nevertheless-. Id. Also similar to the allegations in the CAC, the Chill plaintiffs alleged, “GE recorded hundreds of millions of dollars in profits throughout the Class Period it clearly knew or was wholly reckless in not knowing were manufactured out of thin air ... ” Id. at 266. In reviewing the district court’s dismissal of the complaint and denial of leave to amend, the Second Circuit recognized that, “[u]ltimately, whether Kidder defrauded plaintiffs and whether its parent, GE, defrauded plaintiffs are different questions.” Id. at 264. The Circuit Court agreed with the district court’s dismissal, commenting that, “[i]ntentional misconduct or recklessness cannot be presumed from a parent’s reliance on its subsidiary’s internal controls.” Id. at 271, quoting Glickman v. Alexander & Alexander Servs., Inc., 1996 WL 88570, *15 (S.D.N.Y. Feb.29, 1996). The Sixth Circuit agreed with this proposition in In re Comshare, where it explained that, “the mere lack of records documenting the finality of sales in Comshare’s UK subsidiary could not, without a showing that Comshare normally expected to see such documents from its subsidiaries, imply recklessness. Indeed, this Court should not presume recklessness or intentional misconduct from a parent corporation’s reliance on its subsidiary’s internal controls.” 183 F.3d at 554 (emphasis added). ' This Court finds that the rule in Chill and In re Comshare controls here. Plaintiffs have alleged no facts in support of their conclusory ' allegation that AEP should have known of the inaccurate reporting taking place at its AEPES subsidiary prior to October of 2002. Plaintiffs do not explain why AEP was reckless in relying on AEPES to ensure accurate reporting and maintain its own internal controls. Throughout the CAC, Plaintiffs make allegations such as, “AEP’s traders did not surreptitiously engage in the manipulative practices at issue,” and “... AEP had no internal procedures in place to ensure the accuracy of the reported data.” Those statements, however, are misleading, as evidenced even by a careful reading of the CAC itself. In ¶ 3, Plaintiffs acknowledge that “AEP created AEP Energy Services to trade energy on the newly deregulated wholesale markets,” and that “AEP Energy Services quickly grew into one of the biggest traders in the industry.” Plaintiffs admit, in other words, that it is AEP’s subsidiary, AEPES, that engages in trading, not the parent company, AEP. Yet Plaintiffs simultaneously make the factually-unsupported, inferential leap that, “AEP had been deliberately and routinely reporting false information to Gas Daily, among other publications, thereby manipulating the statistics concerning the volume of AEP’s gas sales in relation to its peers.” ¶ 57. In reality, neither AEP nor' any of its management reported the inaccurate data to Platts; the wrongdoers were five traders employed at AEP’s subsidiary, AEPES. AEP, itself, never engaged in any reporting to Platts; rather, within the industry, it was the traders’ responsibility to report their trading information to the trade publications. Notwithstanding Plaintiffs’ misleading representations to the contrary, neither AEP nor AEPES management was involved. Plaintiffs characterize the head of the trading desk as a person of authority within AEP, but do so, again, without providing factual support. See Helwig, 251 F.3d at 565. For instance, Plaintiffs allege that, “AEP traders stated that the head of AEP’s trading desk had specifically instructed them to submit the false information.” ¶ 6. Plaintiffs do not, however, also allege that the head of the trading desk was an officer or director at AEP, or that he had any involvement with AEP’s SEC filings or press releases. Indeed, Plaintiffs do not even reveal the identity of the head of the trading desk. If it is insufficient to infer a parent’s scienter merely from its subsidiary’s bad conduct, it would be even more inappropriate to infer Defendants’ scienter here, from either the actions of an unidentified “head of the trading desk” or the five traders at AEPES who engaged in the inaccurate reporting. Plainly, as was the case in In re Comshare, “[wjhile Plaintiffs claim Defendants ‘were aware of, or were recklessly indifferent to’ the revenue recognition errors, they allege no facts to show that Defendants knew or could have known of the errors, or that their regular procedures should have alerted them to the errors sooner than they actually did.” 188 F.3d at 553. Moreover, the totality of the allegations and evidence before the Court contradicts the inference that Defendants knew or recklessly disregarded the inaccurate reporting prior to October of 2002. Defendants allege, and the FERC Report confirms, that Dynegy publicly disclosed the discovery of inaccurate reporting by its employees on September 25, 2002. Shortly thereafter on October 4, 2002, was when AEP initiated its own investigation of AEPES’s data reporting procedures. When it quickly discovered that five of the AEPES traders had engaged in inaccurate reporting, AEP terminated them and publicly disclosed such on October 9, 2002. Plaintiffs, on their behalf, have not alleged that any other company was aware of inaccurate reporting before the Dynegy announcement or even that the FERC was aware of the practice before then. Thus, based upon the factually-supported allegations before this Court, Plaintiffs have failed to plead with sufficient particularity that AEP (or AEPES) recklessly failed to ensure accurate reporting and/or put internal controls into place, despite that all of its competitors had done so. To the contrary, the FERC Report confirms that prior to its investigation, “the [10 largest natural gas marketers] had little, if any, formal procedures in place to ensure the accuracy of the data reported to the Trade Press.” FERC Report, at III-3. Such evidence regarding the circumstances under which the inaccurate reporting was taking place belies the inference that AEP either knew about the inaccurate reporting or acted recklessly in relying on AEPES traders to report honestly to the Trade Press. Plaintiffs’ allegations simply do not show “highly unreasonable conduct which is an extreme departure from the standards of ordinary care.” Mansbach, 598 F.2d at 1025. Plaintiffs have not alleged “red flags” from which this Court can infer that the inaccurate reporting was so obvious before October 2002 that AEP, especially as the parent company, was reckless in not knowing about it. Id. (explaining that to allege “recklessness,” plaintiffs must allege circumstances from which it can be inferred that “[w]hile the danger need not be known, it must at least be so obvious that any reasonable man would have known of it.”). With regard to duty, Plaintiffs propose that recklessness, when defined as “conscious disregard,” can be inferred from the fact that Executive Defendants, especially Addis, van der Walde, and Appelt, had a duty to know that AEPES lacked internal controls to ensure accurate reporting. Defendant Addis was the President of AEPES and an Executive Vice President of AEP until his resignation in September of 2001. He was succeeded by Defendant van der Walde, who, prior to September of 2001, directed- AEP’s domestic trading operations, beginning with the company in 1997 as AEPES’s Senior Vice President of Trading. Defendant Appelt, it is alleged, was responsible for the administrative functions of AEPES’s trading group, including the middle office and financial accounting functions. In January 2000, Ap-pelt was named AEPES’s Senior Vice President — Administration and in September 2001, he was promoted to AEP’s Executive Vice President — Administration for AEPES. Plaintiffs’ allegations of scienter with respect to these Executive Defendants, though more compelling than the allegations against AEP, still are not pleaded with sufficient particularity. Courts reject the insinuation that officers and directors of a company “must have known” certain information solely because of their positions within the company. See, e.g., In re Advanta Corp. Securities Litigation, 180 F.3d 525, 539 (3d Cir.1999), quoting Maldonado v. Dominguez, 137 F.3d 1, 10 (1st Cir.1998) (“allegations that a securities-fraud defendant, because of his position within the company, ‘must have known’ a statement was false or misleading are ‘precisely the types of inferences which [courts], on numerous occasions, have determined to be inadequate to withstand Rule 9(b) scrutiny.’ Generalized imputations of knowledge do not suffice, regardless of the defendants’ positions within the company.”). Consequently, it is necessary for Plaintiffs to allege more than just that Addis, van der Walde and Appelt held high level management positions at AEPES. Plaintiffs fail to-allege the specific job responsibilities associated with those titles that might allow the Court to conclude that, even if AEP did not become aware of the inaccurate reporting until October of 2002, the nature of those positions within AEPES made it unreasonable for the Executive Defendants in those positions not to know about the inaccurate reporting. Ifl for example, Plaintiffs had alleged that the position of AEPES’s Senior Vice President of Trading was supposed to monitor the reporting to' the Trade Press, then van de Walde might be said to have “consciously disregarded” the inaccurate reporting even if he claimed to be unaware of it. Plaintiffs, however, have not made such allegations, -and “there are limits to the scope of, liability for failure adequately to monitor the allegedly fraudulent behavior of others.” Novak, 216 F.3d at 309 (noting this limit in discussing its “several important limitations on the scope of liability for securities fraud based on reckless conduct”). Plaintiffs have alleged no source of any duty by these Executive Defendants either to monitor the reporting to trade publications or to ensure its accuracy. As the Chill court explained, in a statement that seems especially on point here, “[t]he plaintiffs’ claim of deliberate blindness is not supported by their allegations.” Chill, 101 F.3d at 270. 4. Motive & Opportunity as Scienter Finally, with regard to Executive Defendants Addis and van der Walde, Plaintiffs contend that their resignations support a strong inference of scienter. The Court might have found this argument persuasive if Plaintiffs had proposed any plausible explanation for the significance of the dates of the resignations, but Plaintiffs have not. Plaintiffs merely allege that Addis resigned in September of 2001. That was almost a year before the alleged discovery and disclosure of the inaccurate reporting, however, so there is no apparent significance or suspicion connected with the date of Addis’ resignation. Moreover, while the CAC states that van der Walde resigned on October 24, 2002, Plaintiffs offer no explanation for why his resignation almost a month after the public disclosure should be viewed with unusual suspicion. ¶ 124. In fact, van der Walde’s resignation seems explainable by AEP’s decision to decrease the size of its trading and wholesale marketing operations because van der Walde was AEP’s Executive Vice-President of marketing and trading. ¶¶ 123, 25. Another of Plaintiffs’ proposed inferences of scienter is that AEP “discovered” the “manipulative practice” “a mere five days after” it announced on October 4, 2002, that it had begun its internal investigation of AEPES’s reporting procedures. Plaintiffs imply scienter by virtue of the short time it took Defendants to uncover inaccurate reporting by five traders at AEPES—the insinuation being that Defendants very likely knew about the practice all along but finally felt forced to disclose it because of the increased scrutiny following the Dynegy announcement. Such insinuation, however, is insufficient to make the “strong inference” of scienter. The PSLRA and Sixth Circuit require Plaintiffs to plead facts regarding Defendants’ scienter in order to survive a motion to dismiss, Helwig, 251 F.3d at 565, and this Court is not required to accept unwarranted factual conclusions. Davis, 259 F.Supp.2d at 669. The most plausible inference from AEP’s public disclosure is not that Defendants acted recklessly in not knowing about the inaccurate reporting before the announcement. Rather, the most plausible of the competing inferences is that Defendants acted diligently in remedying a problem as soon as they became aware of the possibility that it existed and did not try to hide it from AEP investors. If this Court were to allow Plaintiffs to plead the strong inference of scienter in this context, the result would be untenable. Companies would have disincentives to make public disclosures of employee malfeasance, which is antithetical to one of the underlying purposes of the securities laws in encouraging and requiring full disclosure. Plaintiffs’ final attempt to show a “strong inference” of recklessness is to allege two motives that Defendants allegedly had to conceal the inaccurate reporting. According to Plaintiffs, AEP and the Executive Defendants “were highly motivated” to conceal misconduct until after AEP had: 1) gotten FERC approval of its corporate separation, which took place in September of 2002; and 2) made the Secondary Offering that raised nearly a billion dollars in June 2002. As already acknowledged, the Sixth Circuit had held that motive and opportunity may be relevant to scienter and averring recklessness. Helwig, 251 F.3d at 551. They usually are not sufficient by themselves, however, to meet the “strong inference” requirement. In re Comshare, 183 F.3d at 551. Additionally, “unsupported allegations with regard to motives generally possessed by all corporate directors and officers are insufficient as a matter of law. The ‘plaintiffs must assert concrete and personal benefit to the individual defendants resulting from the fraud.’ ” In re K-tel, 300 F.3d at 894, citing Kalnit v. Eichler, 264 F.3d 131, 139 (2d Cir.2001) (other citations omitted). In Chill, the Second Circuit noted, “GE obviously would want to justify its investment in Kidder and have that investment appear profitable, but such a generalized motive, one which could be imputed to any publicly-owned, for-profit endeavor, is not sufficiently concrete for purposes of inferring scienter.” Id. at 268. Plaintiffs’ motive allegations are inadequate in several regards. First, Plaintiffs do not assert any “concrete or personal benefit” reaped by any of the Executive Defendants. Plaintiffs do not allege that the Executive Defendants benefited in any way from either the reorganization plan’s approval or the secondary offering. If Plaintiffs want the Court to imply that the Individual Defendants benefited from some increase in the value of their stock, even assuming that such were true, that “benefit” does not suffice to make the “strong inference” of scienter. See, e.g., Nathenson v. Zonagen Inc., 267 F.3d 400, 420 (5th Cir.2001) (“the allegations that corporate officers and directors would benefit from enhancing the value of their stock and/or stock options ... are likewise insufficient to support a strong inference of scienter.”). The reason corporate profitability is not sufficient to allege Defendants’ scienter is that: [t]he motive to maintain the appearance of corporate profitability ... will naturally involve benefit to a corporation, but does not “entail concrete benefits.” ... “If scienter could be pleaded on that basis alone, virtually every company in the United States that experiences a downturn in stock price could be forced to defend securities fraud actions.” Chill, 101 F.3d at 268, quoting Acito v. IMCERA Group, Inc., 47 F.3d 47, 54 (2d Cir.1995). Plaintiffs allege only that AEP “was able to raise approximately $500 million more in proceeds than if the Company had completed the Secondary Offering after disclosure of the fraud,” and that “it is reasonable to infer the FERC approval of AEP’s planned corporate separation would have been in jeopardy had AEP disclosed [the inaccurate reporting], prior to receiving FERC approval.” Second, with regard to the FERC’s approval of the reorganization plan, Plaintiffs fail to explain how inaccurate reporting would have affected the FERC’s approval. Plaintiffs merely conclude that “it is reasonable to infer” that it would have been in jeopardy. Yet again, these conclusory allegations are insufficient to allege a strong inference of Defendants’ scienter. Plaintiffs’ other allegations, in addition, undermine that conclusion. It is unreasonable to believe that AEPES would begin inaccurately reporting information to the trade publications in 1998, in anticipation of it having some affect on the FERC’s approval of a reorganization plan for AEP four years later. Plaintiffs, thus, fail to plead the alleged fraud with the particularity required by Rule 9(b) and the PSLRA. Third, as for Plaintiffs’ allegation that the secondary offering was more profitable, courts have rejected that averment as sufficient to allege the required “strong inference” of scienter. Nathenson, 267 F.3d at 420 (“[T]he allegations that ... the corporation would benefit by receiving more for its shares to be issued in the July 1997 public offering are likewise insufficient to support a strong inference of scienter.”). Cf. In re Twinlab Corp. Sec. Litig., 103 F.Supp.2d 193, 206-07 (E.D.N.Y.2000). Moreover, the strength of this allegation is dependent upon finding that the Executive Defendants, acting on behalf of the corporation, knew about the inaccurate reporting prior to October of 2002. Otherwise, the June 2002 timing of the Secondary Offering would not be suspicious because it would have occurred prior to Defendants’ discovery of the inaccurate reporting. As with the problem regarding the FERC’s approval of the reorganization plan, Plaintiffs fail to plead the alleged fraud with particularity. Plaintiffs allege a four-year conspiracy by AEP to engage in inaccurate reporting and cover it up in order for the company to make more money from a Secondary Offering in 2002, when there is no allegation that AEP had planned on making the Secondary Offering in 1998. The aforementioned illustrates that all of Plaintiffs’ attempts at pleading the “strong inference” of Defendants’ scienter or pleading the circumstances surrounding the fraud with particularity are insufficient to survive Defendants’ Motion to Dismiss. Plaintiffs’ pleading technique is “to couple a factual statement with a conclusory allegation of fraudulent intent” without alleging the facts to support the contention. Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1129 (2d Cir.1994) (rejecting such a “pleading technique” as insufficient under Rule 9(b)); see also Southland Securities Corp. v. INSpire Ins. Solutions, Inc., 365 F.3d 353, 2004 WL 626721, *12 (5th Cir. Mar.31, 2004) (unpublished) (“The plaintiffs, however, fail to plead facts demonstrating that any of