Full opinion text
OPINION AND ORDER HARMON, District Judge. Pending before the Court in the above referenced cause is Barclays PLC, Bar-clays Bank PLC, and Barclays Capital, Inc.’s (collectively, “Barclays’ ”) motion for partial judgment on the pleadings (instrument # 3615), asking the Court to dismiss with prejudice Plaintiffs’ first claim for relief against Barclays for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, based on Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005) (holding that to plead loss causation adequately under § 10(b), a plaintiff cannot merely allege that he purchased securities at a price that was inflated because of misrepresentations by defendant(s); plaintiff must allege an actual causal connection between a defendant’s misconduct and plaintiffs damages). Standard of Review Federal Rule of Civil Procedure 12(c) provides, “After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings. If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56 .... ” Once a responsive pleading has been filed, a motion to dismiss for failure to state a claim should properly be filed as a motion for judgment on the pleadings. Jones v. Greninger, 188 F.3d 322, 324 (5th Cir.1999) (per curiam). “A motion brought pursuant to Fed.R.Civ.P. 12(c) is designed to dispose of cases where the material facts are not in dispute and a judgment on the merits can be rendered by looking to the substance of the pleadings and any judicially noticed facts.” Great Plains Trust Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 312 (5th Cir.2002), quoting Hebert Abstract Co. v. Touchstone Props., Ltd., 914 F.2d 74, 76 (5th Cir.1990) (per curiam) (citing 5C Charles A. Wright & Arthur Miller, Federal Practice and Procedure § 1367, at 509-10 (1990)); see also Johnson v. Johnson, 385 F.3d 503, 529 (5th Cir.2004). The standard of review under Rule 12(c) is the same as that under Rule 12(b)(6) or 12(h)(2). Great Plains, 313 F.3d at 313 & n. 8. The court should construe the pleadings liberally and should grant a Rule 12(c) motion only when there is no disputed issue of fact and there are only questions of law. Id. at 312. A claim may be dismissed when it is clear that the plaintiff “can prove no set of facts in support of his claim that would entitle him to relief.” Id. at 312, citing Greninger, 188 F.3d at 324. The court must accept all well-pleaded facts as true and view them in a light most favorable to the plaintiff. Id. at 312-13. Conclusory allegations and unwarranted deductions of fact are not accepted as true and will not preclude dismissal. Id. at 313. The question is not whether the plaintiff will ultimately prevail, but whether he may present evidence in support of his claim. Id. Although generally a court may not rely on materials outside the pleadings in a Rule 12 review, in securities fraud suits the court may also consider documents attached to or incorporated by reference in the complaint, and materials of public record subject to judicial notice, including “the contents of relevant public disclosure documents which (1) are required to be filed with the SEC, and (2) .are actually filed with the SEC.” Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017-18 (5th Cir.1996); Davis v. Bayless, 70 F.3d 367, 372 n. 3 (5th Cir.1995). “Such documents should be considered only for the purpose of determining what statements the documents contain, not to prove the truth of the documents’ contents.” Lovelace, 78 F.3d at 1017-18. Lead Plaintiff has provided an appendix in support of its opposition, but many of the documents are not appropriate for a Rule 12 review. Nevertheless the Court is concerned that the First Amended Consolidated Complaint (# 1388), the governing pleading here, was filed May 14, 2003, nearly two years before the Supreme Court issued Dura Pharmaceuticals on April 19, 2005. The Court finds that to hold Lead Plaintiff to its standard retroactively, without an opportunity to amend to meet that standard if it is able to do so, would be unjust. • Therefore the Court considers Lead Plaintiffs briefing and documents to determine whether they demonstrate that Lead Plaintiff could state a § 10(b) claim, including proper pleading of loss causation, by repleading, if the Court finds that it has not already done so. First Amended Consolidated Complaint and Barclays The First Amended Consolidated Complaint (# 1388) states the following about Barclays’ purported role in the alleged Enron scheme. Regarding Barclays’ general involvement, the complaint conclusorily recites that Barclays had an extensive and close relationship with Enron, provided commercial banking and investment banking services to Enron, interacted constantly with Enron’s top executives regarding Enron’s business during the Class Period, and participated in the fraudulent scheme and furthered Enron’s fraudulent course of conduct and business by participating in loans of over $3 billion during the Class Period and helping Enron to raise almost $2 billion from investors in the sale of new securities. # 1388 at ¶¶ 750-51. None of these statements- is adequate to state a violation of § 10(b) and Rule 10b-5. Although the complaint asserts that in return for enormous profits (including interest fees, syndication fees, and investment banking fees) Barclays helped Enron to structure and finance “certain” illicit SPEs and partnerships and to participate in illicit transactions that allowed Enron to falsify its reported financial results, the only one alleged in detail involving Bar-clays is Chewco Investments (“Chewco”), as the Court will discuss. # 1388 at ¶¶ 750, 755-56. Lead Plaintiff also claims that Barclays is liable for statements in registration statements and prospectuses used by Enron and Barclays to raise new capital for Enron and for false and misleading statements in Barclays’ analysts’ reports, but provides no particulars as to which statements nor what was false or misleading and why. Id. at 761. Nor does it identify the analyst(s) nor allege facts giving rise to a strong inference of scienter as to those analysts. As background to Enron’s repeated use of special purpose entities (“SPEs”) to forward the purported fraudulent scheme to fabricate assets and conceal debt for Enron, the complaint at ¶¶ 429-447 charges that in failing to consolidate Enron-controlled and Enron-financed SPEs and partnerships into Enron’s own financial statements, Enron violated GAAP (Accounting Research Bulletin No. 51) and FASB Statement of Financial Accounting Standards (“SFAS”) No. 94, which requires consolidation of all majority-owned subsidiaries unless control is temporary or does not rest with the majority owner. The complaint asserts that Enron used qualifying and nonqualifying SPEs to conceal billions of dollars in loans and losses, to wrongfully recognize millions of dollars of income from transactions with these entities, and to “monetize” (accelerate recognition of) future contract revenues and book them as current revenues. In 1993 Enron created a joint venture investment partnership call Joint Energy Development Investment Limited Partnership, or “JEDI.” # 1388 at ¶ 436. At that time Enron was general partner and had a limited partner, so that it was not required by GAAP to consolidate JEDI into its consolidated financial statements. Id. But in 1997 the limited partner withdrew, and Enron was unable to find a new, independent partner, raising the specter of Enron’s having to consolidate and to wipe out 40% of the profits it had reported earlier that year and having to record millions of dollars of debt on its balance sheet. Id. at ¶ 757. According to the complaint, Enron’s Chief Financial Officer, Andrew Fastow, created Chewco to replace the 3% equity partner and positioned his subordinate, Enron employee Michael Kopper, as its manager after Vinson and Elkins had advised that Kopper’s role would not have to' be disclosed because he was not a senior Enron officer. Id. at ¶¶ 436-37. Chewco did not comply with the nonconsolidated SPE ■ rules because Kopper, an Enron employee, controlled Chewco and because Chewco had no third-party independent investors. Id. at 437. To avoid consolidation at year end 1997, Enron first arranged inter alia for a $240 million unsecured subordinated loan to Chewco from Barclays,. which Enron guaranteed, and a sham transfer of Kop-per’s ownership interest (he had invested $125,000) in Chewco to Kopper’s domestic partner,. William Dodson, concealing Enron’s control of and interest in Chewco. Id. at ¶ 438-39. In addition to Enron’s guarantee, Barclays was awarded with a very high interest' rate and significant commitment and lending fees. • Id. at ¶ 758. ’ ' ■ Because a third^arty investor with outside equity of $11.4 million to reach 3% ownership was still required for Chewco to qualify as an SPE for off-balance-sheet treatment, the complaint alleges that Bar-clays also granted Enron’s request that Barclays provide loans to two entities, strawmen named Big River Funding LLC and Little River Funding LLC, which were controlled by Enron and lacked any real credit stánding, for that purpose. Id. at 758. Barclays and Enron Defendants drew up documents characterizing the advances as loans for business and regulatory reasons, but allowing Enron and Chew-co simultaneously to characterize them as equity contributions for purposes of the 3% “independent” investment. ■ Id. at ¶ 439. The loans were recorded in documents similar to promissory notes and loan agreements, but were designated “certificates” and “funding agreements,” and required the borrowers to pay a specified percentage rate “yield,” i.e., interest. Id. In addition, the complaint claims, because Barclays knew the “equity investors” were straw persons and that Chewco was being secretively and improperly manipulated to prevent an unwinding or restatement of Enron’s previously reported ’97 profits and to serve as a deceptive device for future use in other non-arm’s length transactions, Barclays required the borrowers to set up cash “reserve accounts” to secure repayment to Barclays of the $11.4 million. Id. at ¶ 758. To fund the accounts, JEDI wired $6.58 million to Barclays on 12/30/97 under an agreement drawn up by Vinson & Elkins, in effect cutting in half Chewco’s purported 3% at-risk, independent equity. Id. Because Chewco was not a qualified SPE, it should have been consolidated into Enron’s financial statements from the time the limited partner withdrew. Id. at-¶ 440. Furthermore, JEDI’s nonconsolidation in turn depended on Chewco’s nonconsolida-. tion status. Id. Since Chewco was supposed to be an independent, unrelated partner in JEDI, but was not, all revenues that Enron recognized from JEDI were also improper. Id. at ¶ 442. Thus JEDI also should have been consolidated in Enron’s financial statement in 11/97. Bar-clays purportedly knew about the manipulation because it helped to structure its loan to appear as equity. Id. at ¶ 441. In ¶ 447 of the complaint, Lead Plaintiff sets out specific amounts of unrecorded losses and unrecorded debts that Enron was able to hide-from 1997-2000 by using the two unqualified SPEs. Dura Pharmaceuticals, Inc. v. Broudo The United States Supreme Court’s opinion in a fraud-on-the-market case, Dura Pharmaceuticals, Inc. v. Broudo, heightened the pleading requirements for loss causation and has significant implications for proving damages in a § 10(b) case. Daniel P. Lefler and Allan W. Klei-don, Just Dow Much Damage Did Those Misrepresentations Actually Cause and To whom? Damages Measurement in “Fraud on the Market” Securities Class Actions, 1505 PLI/Corp 285, 292-94 (Sept. 2005). la Dura Pharmaceuticals, purchasers of stock in the pharmaceutical company that had submitted a new asthmatic spray device for approval from the Food and Drtig Administration, alleged in a securities fraud class action suit that some of the company’s managers and directors misrepresented that the company expected its drug sales to be profitable and that it expected FDA approval of the spray device shortly. On the final day of the purchase period, the defendants disclosed that the earnings would be less than anticipated; largely because of slow sales; eight months later they announced that the FDA would not approve the device. The complaint asserted only, “ ‘In reliance on the integrity of the market, [the plaintiffs] ... paid artificially inflated prices for Dura securities ’ and the plaintiffs suffered damage[s]’ thereby.” 125 S.Ct. at 1630 (emphasis in the original). Justice Stephen Breyer, writing for a unanimous Supreme Court, reversed a Ninth Circuit ruling that a plaintiff pleading securities fraud under § 10(b) and Rule 10b-5 need only establish that the price of a security was artificially inflated on the date he purchased it to plead economic loss and loss causation under the 1934 Act. The Supreme Court opined that in a fraud-on-thé-market case, where a plaintiff alleges that he suffered losses because he paid an artificially inflated price for a security, generally “as a matter of pure logic, at the moment that a transaction takes place, the plaintiff [who has purchased securities at an inflated price] has suffered no loss; the inflated purchase payment is offset by ownership of a share that at that instant possesses equivalent value.” 125 S.Ct. at 1631 (emphasis in original). In other words, at the time the purchase of a security occurs, the alleged inflated price, alone, logically cannot constitute “economic loss” because the plaintiff acquires a security of “equivalent value” and the “misrepresentation will not have led to any loss” if the plaintiff sells the shares “quickly before the truth begins to leak out.” Id. Furthermore, the Supreme Court pointed out that an implied private securities fraud action under the Securities Exchange Act is similar in many ways to common-law causes of action for deceit and fraudulent misrepresentation, which require a plaintiff to show (1) that if he had known the truth he would not have acted as he did; (2) that he suffered actual, substantial damage; and (3) that the defendant’s deception was the proximate cause of the plaintiffs injuries. Id. Even when the purchaser later sells his shares at a lower price, the Supreme Court questioned any automatic assumption of a link between an inflated price and a subsequent economic loss after news of the deception is leaked: If the purchaser sells later after the truth makes its way into the market place, an initially inflated purchase price might mean a later loss. But that is far from inevitably so. When the purchaser subsequently resells such shares, even at a lower price, that lower price may reflect, not the earlier misrepresentation, but changed circumstances, changed investor expectations, new industry-specific or firm-specific facts, conditions, or other related events which, taken separately or together, account for all of that lower price.... Other things being equal, the longer the time between purchase and sale, the more likely that this is so, ie., the more likely that other factors caused the loss. Id. at 1631-32. Thus the high court addressed a narrow issue: it held that in a fraud-on-the-market case a plaintiff must plead, and ultimately prove, more than simply that the defendant’s misrepresentation caused the stock price to be inflated; an artificial high purchase price “is not itself a relevant economic loss,” but merely “touches upon” the subsequent loss of value and does not necessarily cause the plaintiff economic loss, especially in light of the “tangle of factors affecting price.” Id. at 1634, 1632. Focusing on threshold pleading requirements rather than the ultimate burden of proof, but with clear implications for that ultimate burden, the high court did not indicate what must be pled to establish loss causation other than requiring more than a simple allegation of inflated stock price: “We need not, and do not, consider other proximate cause or loss related questions.” Id. at 1633-34. The Supreme Court did not affirmatively adopt Dura Pharmaceuticals’ argument that .a plaintiff must allege and ultimately prove that the defendant made a corrective disclosure of the fraud that was followed by a related price drop, nor did it specify what must be pled to establish that “the truth became known”; instead, the Supreme Court stated vaguely that a complaint must “provide defendants with notice of what the relevant economic loss might be or what the causal connections might be between that loss and the misrepresentation” (i.e., “some indication of the loss -and the causal connection that the plaintiff has in mind,” a subjective standard), the pleading of which “should not prove burdensome” for a. plaintiff. Id. at 1634. Thus besides a formal corrective disclosure by a defendant followed by a steep drop in the price of stock, the market may learn of possible fraud through a number of sources: e.g., from whistleblowers, analysts’ questioning of financial results, resignations of CFOs or auditors, announcements by the company of changes in accounting treatment going forward, newspapers and journals, etc. See Alan Schulman and Nicki Mendoza, Dura Pharm., Inc. v. Broudo-The Least of All Evils, 1505 PLI/Corp. 272, 274 (Sept.2005). Plaintiffs economic loss may occur as “relevant truth begins to leak out” or “after the truth makes its way into the market place,” and the plaintiff need only give “some indication” of the causal link between that leaked truth and his economic loss. 125 S.Ct. at 1631, 1632, 1634. The pleading of a single formal corrective measure is not necessary. Moreover, the plaintiffs loss need not be caused exclusively by the defendant’s fraud. Id. at 1632, citing the common-law precedents of deceit and misrepresentation for implied private securities-fraud actions under § 10(b) and W. Keeton, D. Dobbs, R. Keeton & D. Owen, Prosser and Keeton on Law of Torts § 110, at 765 (5th ed.1984); see also Sosa v. Alvarez-Machain, 542 U.S. 692, 124 S.Ct. 2739, 2750, 159 L.Ed.2d 718 (2004) (“Proximate case is causation substantial enough and close enough to the harm to be recognized by the law, but a given proximate cause need not be, and frequently is not, the exclusive proximate cause of harm.”); In re Daou Systems, Inc., 411 F.3d 1006, 1025 (9th Cir.2005) (misrepresentation need not be sole reason for investment’s decline but only a substantial cause); Caremark Inc. v. Coram Healthcare Corp., 113 F.3d 645, 649 (7th Cir.1997) (Loss causation “does not require ... that the plaintiff plead that all of its loss can be attributed to the false statement of the defendant.”). The Supreme Court, “assuming], at least for argument’s sake, that neither the Rules nor the securities statutes impose any special further requirement in respect to the pleading of proximate causation or economic loss,” appeared to suggest that Federal Rule of Civil Procedure 8(a)(2)’s standard (“a short plain statement of the claim showing that the pleader is entitled to relief’) applies to the pleading of economic loss and proximate causation and that plaintiff must merely give fair notice of his claim and the grounds on which it is based, a “simple test.” Id. at 1634 (“We concede that ordinary pleading rules are not meant to impose a great burden upon a plaintiff. Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513-15, 122 S.Ct. 992, 152 L.Ed.2d 1 (2002). But it should not prove burdensome for a plaintiff who has suffered an economic loss to provide a defendant with some indication of the loss and the causal connection that the plaintiff has in mind.”). Thus, as noted supra, under Dura Pharmaceuticals, one acceptable, but not the only, way to plead proximate cause and economic loss (the difference between the price the purchaser paid and the subsequent price to which the stock dropped) in fraud-on-the-market cases is to allege that the price a plaintiff paid for a security “fell significantly after the truth [of the material misrepresentation or omission] becomes known” and that the disclosure of the misrepresentation or omission had a significant effect on the market price. In sum the high court found that the plaintiffs in Dura Pharmaceuticals failed to state a claim because they did not provide the defendants with fair notice of their claim and the grounds on which it rested, did not assert that Dura Pharmaceuticals’ share price dropped substantially after the falsity of their alleged misrepresentations became known (suggesting “that plaintiffs considered the allegation of purchase price inflation alone sufficient”), did not identify their relevant economic loss, and did not describe the causal connection between their economic loss and the alleged misrepresentation. Id. at 1634. While the Supreme Court rejected the Ninth Circuit’s lenient test for economic loss and loss causation as inadequate pleading in fraud-on-the-market cases, it did not address, and thus left intact, more stringent requirements that had been established by other Circuit Courts of Appeals, including the Second, Third, Seventh, and Eleventh. 125 F.3d at 1630. For example, in Lentell v. Merrill Lynch & Co., 396 F.3d 161 (2d Cir.2005), cert. denied, — U.S. ---, 126 S.Ct. 421, 163 L.Ed.2d 321 (2005), the Second Circuit indicated that a plaintiff must allege that his loss was “foreseeable” and that it was caused by the “materialization of the concealed risk.” 396 F.3d at 173. In Emergent Capital Inv. Mgmt., LLC v. Stonepath Group, Inc., 343 F.3d 189, 197 (2d Cir.2003), the Second Circuit described loss causation in terms of the tort-law concept of proximate cause, -i.e., “that damages suffered by plaintiff must be a foreseeable consequence of any misrepresentation.” Stated another way, “a misstatement or omission is the proximate cause of an investor’s loss if the risk caused by the loss was within the zone of risk concealed by the misrepresentations and omissions alleged by the disappointed investor”; thus to demonstrate loss causation the complaint must allege “that the misstatement or omission concealed something from the market that, when disclosed, negatively affected the value of the security. Otherwise the loss in question was not foreseeable ...” The complaint must also assert “that the subject of the fraudulent statement or omission was the cause of the actual loss suffered.” Lentell, 396 F.3d at 172-73, 175. If the relationship between the plaintiffs investment loss and the information misstated or concealed by the defendant is sufficiently direct, the element of loss causation for pleading, which requires a fact-specific inquiry at trial stage, is satisfied. Id. at 174. The pleading burden will vary with the circumstances. A disparity between the purchase price and the “true investment quality” at the time of purchase, by itself, is not sufficient; if there is a market-wide drop in prices, the plaintiff must plead facts that show that the plaintiffs loss was caused by the alleged misstatements and not by any intervening factor. Id. at 174. If there was an intervening event, like a fall in the price of gasoline stock, the issue becomes “a matter of proof at trial and not to be decided on a Rule 12(b)(6) motion to dismiss.” Id. Thus it appears Lentell provides different modes of pleading for different problems. A federal district court in New York has commented, Where the alleged misstatement conceals a condition or event which then occurs and causes the plaintiffs loss, it is the materialization of the undisclosed condition or event that causes the loss. By contrast, where the alleged misstatement is an intentionally false opinion, the market will not respond to the truth until the falsity is revealed-i.e., a corrective disclosure. In re Initial Public Offering Securities Litig. v. Credit Suisse First Boston Corp., 399 F.Supp.2d at 307. In the aftermath of Dura Pharmaceuticals two appellate courts have ruled on the pleading of loss causation and economic loss. In an unpublished opinion in a securities fraud class action suit alleging that senior Kmart officers and Pricewaterhou-seCoopers made misrepresentations about Kmart’s financial condition before the corporation filed for bankruptcy and restated some interim financial reports, the Sixth Circuit affirmed the lower court’s dismissal of the complaint for failure to plead loss causation for the same reasons as the Supreme Court, i.e., because in conclusory boilerplate language the complaint alleged only that plaintiffs paid artificially inflated prices for Kmart’s securities and it “did not plead that the alleged fraud became known to the market on any particular day, did not estimate the damages that the alleged fraud caused, and did not connect the alleged fraud with the ultimate disclosure and loss.” D.E. & J.L.P. v. Conaway, No. 02-2334, 133 Fed.Appx. 994, 999-1000 (6th Cir. June 10, 2005). Nor did plaintiffs allege that the bankruptcy filing disclosed the fraud behind the prior misrepresentation; “of course, the filing of a bankruptcy petition by itself does not a security fraud allegation make.” Id. at 1000-01. Thus the complaint did not give fair “notice of what the relevant economic loss might be or of what the causal connection might be between the loss and the misrepresentation.” Id. at 1000-01 (“Here, D.E. & J. has done nothing more than note that a stock price dropped after a bankruptcy announcement, never alleging that the market’s acknowledgment of prior misrepresentations [defendants’ fraud] caused that drop.”). In In re Daou Systems, Inc., 411 F.3d 1006 (9th Cir.2005), the plaintiffs alleged that defendants “systematically and fraudulently violated the Generally Acceptable Accounting Principles (‘GAAP’) in order to artificially inflate the price of Dauo’s stock.” Id. at 1012. The Ninth Circuit found the pleading of loss causation adequate where the complaint alleged a steep drop in the price of the company’s stock after revelation of accounting figures that showed its true financial condition. Specifically the complaint stated that on August 13, 1998, Daou’s stock was priced at $18.50 per share. Subsequently at the beginning of August 1998, and not before, the defendants disclosed that “Daou’s operating expenses and margins were deteriorating.” Id. at 1026. On October 28, 1998 they announced that the .Company had substantially missed its projected 3Q98 earnings and would report a loss of $0.17 per share, and “ ‘that the Company’s rapidly escalating work in progress account represented over $10 million in unbilled receivables-ihe direct result of prematurely recognizing revenue.’ ” According to the complaint, before August 13, 1998 the defendants did not reveal the actual figures to analysts in order to hide the deterioration of operating .earnings and margins resulting from premature and improper recognition of revenue. Id. at 1026. After that date, defendants began disclosing figures reflecting the actual financial condition of the company, revealing that the operating expenses and margins- were deteriorating and, on October 28, 1998, that Daou had substantially missed its projected 3Q98 . earnings projections. Moreover they also disclosed that the accounting practice of premature recognition of revenue before it was earned allegedly resulted in a “dramatic negative effect on the market, causing Daou’s stock to decline to $3.25 per share, a staggering 90% drop from the Class Period High of $34.375 and a $17 per share drop from early August 1998.’ ” Id. Plaintiffs’ purported economic loss was not their purchase of their stock at inflated prices, but the decline in the value of their stock directly resulting from disclosure of Dauo’s true financial condition in contrast to earlier misrepresentations. Id. at 1027. The Ninth Circuit, taking Plaintiffs’ allegations as true, found they were adequate to provide Daou with the requisite indication that the drop in its stock price from its August 13 1998 high of $18.50, following its disclosures beginning in August 1998, was causally related to its practice of prematurely recognizing revenue before it was earned. Id. The Fifth Circuit has not addressed loss causation since Dura Pharmaceuticals was issued, although it previously examined the question of loss causation with respect to misrepresentations in Greenberg v. Crossroads Systems, Inc., 364 F.3d 657 (5th Cir.2004). It has not addressed loss causation relating to concealed fraudulent conduct under Rule 10b-5(a) and (c). Therefore for conduct, this Court applies the Second Circuit’s standard under Lentell (that a plaintiff must allege that his loss was “foreseeable” and that it was caused by the “materialization of the concealed risk,” 396 F.3d at 173). Moreover, pursuant to the Supreme Court’s discussion in Dura Pharmaceuticals, the Court does not impose heightened or onerous pleading requirements for loss causation. The Issue Barclays’ Motion for Judgment on the Pleadings Barclays insists the pleadings fail to state a claim because they merely assert that plaintiffs “suffered damages in that, in reliance on the integrity of the market, they paid artificially inflated prices in connection with their purchase of Enron securities,” an allegation that by itself is insufficient as a matter of law. First Amended Consolidated Complaint (# 1388) at 629, ¶ 997. Such price inflation allegations are like those rejected by the Supreme Court in Dura Pharmaceuticals. The complaint does not allege that plaintiffs suffered losses caused by Barclays’ purported misconduct. Furthermore, even if the Court allows Lead Plaintiff to amend again, Barclays maintains that Lead Plaintiff cannot adequately plead loss causation with respect to Barclays because the governing complaint identifies only one public disclosure of a Barclays-related transaction before Enron Corporation filed for bankruptcy. The sole Barclays-related transaction publicly disclosed before Enron filed for bankruptcy was Chewco. Chewco closed in December 1997, and therefore claims based on it are time-barred by the applicable three-year statute of repose, which limits claims against Barclay to conduct arising after April 8,1999. In re Enron Corp. Sec., Derivative & “ERISA” Litig., 235 F.Supp.2d 549, 689 (S.D.Tex.2002); In re Enron Corp. Sec., Derivative & “ERISA ” Litig., 310 F.Supp.2d 819, 848 (S.D.Tex.2004); Lampf Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 364, 111 S.Ct. 2773, 115 L.Ed.2d 321 (1991). Although during the Class Period the price of Enron stock fell from allegedly inflated prices to near bankruptcy level, Lead Plaintiff can only allege that the class members suffered damages because of conduct not associated with Barclays. Barclays also insists that pleading loss causation as to Barclays cannot be satisfied by alleging that Plaintiffs’ losses were caused by a gradual series of disclosures over time of some, but not all, details of the alleged Ponzi scheme generally (e.g., the broadband business, failed investments, Skilling’s resignation, the SEC investigation, etc.), lumping together the alleged conduct of all the defendants, when none of these disclosures involved actionable conduct by Barclays. Plaintiffs must demonstrate that their losses were caused by Barclays’ particular conduct, not the conduct of other Defendants, to state a § 10(b)/Rule 10b-5 claim against Barclays: plaintiff “shall have the burden of proving the act or omission of the defendant alleged to violate this chapter caused the loss for which the plaintiff seeks to recover damages.” Private Securities Litigation Reform Act of 1995 (“PSLRA”), 15 U.S.C. § 78u-4(b)(4). Moreover, under Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 191, 114 S.Ct. 1439, 128 L.Ed.2d 119 (1994), a defendant may be ¡held liable as a primary violator under an alleged scheme to defraud only “if all the requirements for liability under Rule 10b-5 have been satisfied as to each secondary-actor defendant ....” In re Enron Corp. Sec., Derivative & ERISA Litig., 235 F.Supp.2d 549, 591 (S.D.Tex.2002). Loss causation is one of the elements that must be satisfied. Last of all, Barclays contends that scheme liability' was “flatly rejected in Dura.” Instead the Supreme Court examined the effect of each alleged misrepresentation separately and found the pleadings insufficient to state a claim. Lead Plaintiffs Opposition In opposition, Lead Plaintiff argues that Barclays “purposefully structured numerous transactions for Enron to artificially increase the amount of Enron’s reported cash flows from operations, to conceal from investors the actual amount of Enron’s debt obligations, to mask the volatility of Enron’s risky business endeavors, to move impaired assets off Enron’s books at inflated values and to create the false appearance that Enron was conservatively accounting for its mark-to-market profits and had high quality earnings. Barclays’ fraudulent conduct helped to create! ] the appearance Enron was a creditworthy and financially successful company! ] when nothing was further from the truth.” # 3681 at 1. The known risk of this fraudulent conduct, that Enron would go bankrupt, was -deliberately concealed from shareholders and investors, ultimately and foreseeably materializing in Enron’s bankruptcy and in Plaintiffs’ losses, exemplifying classic loss causation, argues Lead Plaintiff. Throughout the Class Period in response to partial disclosures, ‘rumors, ■ and questions relating -to Enron’s fraudulent scheme, the price of Enron stock dropped. Lead Plaintiff insists, “It is of little significance investors’ fears were not fueled by - specific revelations that Bar-clays had structured a number of ■ the transactions that disguised Enron’s ■ true financial condition.” #3682 at 4. Lead Plaintiff contends, “An examination of Bar-clays’ acts during the Class Period demonstrates the very concerns that.led to Enron’s bankruptcy-liquidity, undisclosed debt, financial engineering-were concealed by various Bar'clays/Enron deals.” Id. át 9. ’ • ■ • ■ ■ ■ With respect to Chewco, Lead Plaintiff argues that its role in Barclays’ role in the transaction continued long after April 1999 when the transaction closed. It claims that Barclays acted to protect its loans to Big River and Little River and to “do deals including a financing in JEt)I at the end of 1999.” # 3682 at 10. It lists a notice from Big River and one from'tittle River stating each entity’s intent to repay loans and an' e-mail stating the financing had been repaid in full. Lead Plaintiff asserts that the Big River and Little River reserve accounts, to which Chewco had fraudulently funneled money, were -actively monitored by Barclays as of November 9, 1999. Exs. 5-7 to #3682. In December 1999 Barclays provided $128,375 million of $513.5 million financing, supported by c. 12 million shares of Enron stock currently held by JEDI. Ex. 8 to # 3682. Alternatively, should the Court find that the claims based on Chewco are time-barred, Lead Plaintiff argues that the transaction can still be used to show Barclays had scienter in its subsequent participation in the scheme. In re Enron, 235 F.Supp.2d at 689. Moreover, Lead Plaintiff asserts that it has met the Fed. R. of Civil Procedure 8’s notice pleading requirements by providing “some indication” of the loss and the causal connection. Noting that “Chewco operated to affect Enron’s financial statements as late as 2000,” it provides a copy of Enron’s September 30, 2001 (Ex. 2 at 16 to # 3682) demonstrating that “[t]he deal resulted in the overstatement of income by $405 million during 1997-2000 and an understatement of debt by $711 million, $561 million, $685 million and $682 million for the years ending 1997, 1998, 1999, and 2000, respectively.” # 3682 at 10. In addition to Chewco, Lead Plaintiff maintains that Barclays was a primary actor in three prepay deals (Nixon, Roosevelt, and the 2001 Prepay), characterized as “loans” and classified as debt in internal reviews of Enron’s credit risk by Barclays. In actuality, Lead Plaintiff asserts, Enron accounted for them as cash flow from operations rather than cash from financing (debt obligations that would have to be repaid), and they served to deceive investors by hiding billions of dollars of Enron’s debt, overstating Enron’s cash flow from operations by billions of dollars, and fraudulently propping up Enron’s credit rating. Although Lead Plaintiff cites the First Amended Consolidated Complaint at ¶¶ 44-47, 684, these paragraphs do not relate to these three prepay deals. It also cites Exhibits 10-12 to # 3682, but without any discussion or explanation. Lead Plaintiff describes Nikita, which closed in September 2001, as “an FAS 140 deal whereby Enron effectively sold its limited partnership interests in EOTT Energy Partners LLP to Besson Trust, an SPE which was funded by the issuance of notes and certificates, with the certificates serving as the 3% at-risk equity portion of the transaction to obtain off-balance sheet treatment. See Exs. 16, 17. The deal resulted in Enron’s reporting incorrectly $10 million in income and $80 million in financing cash flows rather than debt.” #3682 at 13. Lead Plaintiff states that initially Barclays was supposed to provide the notes and certificates, but decided not to because of regulatory concerns. Instead Credit Suisse First Boston (“CSFB”) performed that role, but required Barclays to enter into a total return swap, so that Enron’s verbal assurances that the equity provider would not lose its investment continued to run to Barclays and Barclays was guaranteeing that CSFB would not lose its equity investment. Id. Lead Plaintiff reports that Nikita was disclosed before Enron filed for bankruptcy. Lead Plaintiff also points to a J.T. Holdings transaction in November 2001 to refinance a synthetic lease structure of a storage facility and a methanol plant, which Barclays and Enron structured' to keep $110 million of debt off Enron’s balance sheet. The outside 3% equity at risk was to come from certificates and A and B notes issued by Enron/NLG. In actuality, Lead Plaintiff asserts that Barclays purchased a portion of those B notes and certificates while requiring Enron to orally promise that Barclays’ equity investment would be repaid; thus Barclays’ equity was not at risk and the off-balance-sheet treatment was improper. Exs. 19, 20, 21, 23 to # 3682. In addition, when the storage facility was removed from the lease in June 2001, Barclays mandated Enron to establish a “cash collateral account for the benefit of the B notes and certificates,” further reducing risk for its equity investment. Ex. 24. Lead Plaintiff claims that the J.T. Holdings transactions falsely presented Enron as a successful business. In September and October 2001, Enron misrepresented $167.6 million in cash flow from financing (debt) as cash' flow from operations by selling its interest in sulfur dioxide credits to Colonnade, a Barclays-created special purpose vehicle (“SPV”). Exs. 25, 26. According to Lead Plaintiff, “The transactions involved a complex structure of put and call options, commodity swaps and guarantees which created the same effect as' borrowing by Enron secured by emission credits”; in other words, in essence they were debt obligations. # 3682 at 14. Lead Plaintiff states that the way Barclays structured Colonnade caused Arthur Andersen to conclude that the SPV could not obtain off-balance-sheet treatment. Ex. 25. Moreover, Lead Plaintiff asserts that Barclays “was warned by its external accountants that because the risks and rewards of the deal remained with Enron, off balance sheet treatment would not be proper,” but consummated the deal anyway. Exs. 27-34. Lead Plaintiff also references two metals transactions, between Enron and Bar-clays, one involving metal warrants and warehouse receipts and closing in September 2000 for $750 million, and the other involving a sale of physical metal and closing in December 2000 for $1 billion, that allowed Enron to conceal up to $1,750 million of debt and improperly report the same amount as cash flow from operations. Lead Plaintiff describes the scheme as follows. Enron sold the metal warrants or physical metal to Barclays at a discounted price in exchange for- lump sum payments, while Barclays contemporaneously granted Enron an option with the right to purchase the same amount of warrants or metals at the same price. Exs. 15, 35, 36, 37. The discount was a strong incentive for Enron to purchase the metal from Barclays. Barclays then entered into a forward contract with London Clearing House to sell it the same amount of warrants or metals at the' same discounted price. Exs. 36, 38. Next Enron - entered into a forward contract with London Clearing House to purchase from London Clearing House the same amount of warrants or metals. According to Lead Plaintiff, these transactions disguised Enron’s true debt level and concealed debt obligations, while fraudulently inflating its cash flow, manipulating its earnings, distorting its creditworthiness, and causing Enron to be so highly leveraged that it was overwhelmed by its debt obligations. To satisfy the element of loss causation, Lead Plaintiff points to the First Amended Consolidated Complaint’s detailed identification in ¶¶ 52-74, 280, of a stream of rumors, disclosures, media articles, conference calls, insider trading, and reports about Enron’s actual financial condition that caused significant drops in the price of Enron stock toward the end of 2000 and through 2001. Lead Plaintiff charges that “Enron’s accumulated financial chicanery had created a liquidity crunch inside Enron,” which was gradually revealed to the public through partial disclosures of accounting improprieties, insider trading, departure of key Enron insiders, etc., resulted in the steep stock price decline, damaging plaintiffs. Exs. 39, 40, 41, 42, 44, 43. It points to November 19, 2001 when Enron publicly disclosed its liquidity crunch. Lead Plaintiff argues that at this revelation, Barclays’ conduct in creating and disguising Enron’s liquidity crisis caused plaintiffs to be damaged. It asserts that November 19, 2001 was the date when Barclays’ fraud was expressly disclosed at a conference at the Waldorf-Astoria Hotel in New York, when Enron executives identified Nikita and certain non-Barclays-related prepays as debt obligations. Ex. 50 at ERN0000744 to # 3682. As further evidence of loss causation, Lead Plaintiff points to the failed merger of Enron with Dynegy after Dynegy’s due diligence efforts uncovered the actual financial condition of Enron and its fraudulently structured financings, which included at least several of Barclays’ transactions. Lead Plaintiff contends, “Bar-clays fraudulently concealed the very risks that ultimately materialized and caused plaintiffs’ damages.” It argues, “Barclays structured transactions to deceptively assure investors that Enron was: 1) creditworthy, 2) its earnings were real, 3) its cash flows substantial and 4) its actual debts manageable,” when it knew the opposite was true and these concealed risks materialized in Enron’s collapse into bankruptcy, “classic loss causation.” For authority, inter alia, it cites Semerenko v. Cendant Corp., 223 F.3d 165, 186 (3d Cir.2000) (rejecting argument that termination of a merger was an intervening event that caused plaintiffs’ loss rather than defendants’ misrepresentations: “ ... it is reasonable to conclude that the disclosure of the falsity of the alleged misrepresentations played a substantial factor in the termination of the merger agreement” and “the complaint alleges sufficient facts to establish the element of loss causation”). Moreover, Lead Plaintiff claims that Bar-clays fraudulently concealed the very risks that ultimately materialized in Enron’s bankruptcy and caused plaintiffs’ damages. See In re Taxable Municipal Bonds Litigation, Civ. A. MDL No. 863, 1992 WL 165974, *9 (E.D.La. July 1, 1992) (for loss causation plaintiffs “must allege that they would not have suffered the loss absent the misrepresentations. Most importantly, ‘they must allege that they were injured because the risks that materialized were the risks of which they were unaware as a result of the defendants’ misleading statements, not the risks of which they were fully aware.’ ”), citing Miller v. New America High Income Fund, 755 F.Supp. 1099, 1107-08 (D.Mass.1991), and Bastian v. Petren Resources Corp., 892 F.2d 680, 686 (7th Cir.), cert. denied, 496 U.S. 906, 110 S.Ct. 2590, 110 L.Ed.2d 270 (1990). See also Castellano v. Young & Rubicam, Inc., 257 F.3d 171, 189-190 (2d Cir.2001); Caremark, Inc. v. Coram Healthcare Corp., 113 F.3d 645, 649 (7th Cir.1997); In re Parmalat Sec. Litig., 375 F.Supp.2d 278, 307 (S.D.N.Y.2005). “[L]oss causation does not require full disclosure and can be established by partial disclosure during the class period which causes the price of shares to decline.” Montoya v. Mamma.com Inc., No. 05 Civ. 2313(HB), 2005 WL 1278097, *2 (S.D.N.Y. May 31, 2005). Barclays’ Reply (# 3756) Barclays replies that since the Chewco transaction claims are time-barred and since the governing pleading does not identify any other conduct by ■ Barclays that caused Plaintiffs’ loss, they “now try to concoct an entirely new theory of liability,” i.e., that Barclays “ ‘concealed the risk’ of Enron’s precarious financial condition.” #3756 at 2. Barclays contends that this new theory is not mentioned in the First Amended Consolidated Complaint, nor was it raised in Lead Plaintiff’s opposition to any defendant’s motion to dismiss, and thus may not be considered on a motion for judgment on the pleadings. Moreover, since Plaintiffs’ claims against Barclays are premised on conduct in violation of Rule 10b-5(a) and (c), and not on material omissions under subsection (b), to plead that Plaintiffs’ loss was directly caused by Barclays conduct, Plaintiffs must, but fail to, “allege some aspect of a risk that Bar-clays concealed caused losses after those risks became known or materialized.” #3756 at 3. But Plaintiffs do not allege that any of the Barclays’ purported -transactions were disclosed or unwound before the collapse of Enron stock’s price and thus do not show that the disclosure or realization of some risk caused Plaintiffs’ loss. Barclays further argues that merely alleging the existence of a scheme to defraud is also insufficient to plead loss causation; Plaintiffs must allege facts to satisfy all the elements of a § 10(b) claim as to each defendant, including loss causation, i.e., a direct causal link between a material misrepresentation or wrongful conduct by Barclays and Plaintiffs’ loss. Barclays maintains that allegations that Barclays participated in several transactions that Enron failed to properly account for and that the company and its -stock ultimately collapsed because of financial and accounting problems is what Dura Pharmaceuticals rejected: “To ‘touch upon’ a loss is not to cause a loss, apd it is the latter that the law requires.” 125 S.Ct. at 1632. The general allegation that there is “a very strong connection between Barclays’ conduct and plaintiffs’ being damaged” does not satisfy the element of loss causation. The First Amended Consolidated Complaint does not allege that any actionable Barclays transaction was disclosed or unwound before the price of Enron stock collapsed or that the concealed risk associated with such a transaction was realized and thereby caused the decrease in the stock price and damage to the Plaintiffs. Instead Plaintiffs set out partial disclosures of negative information about Enron, but no corrective disclosure about Bar-clays’ actionable conduct. Barclays argues that Plaintiffs cannot rely on general allegations of loss causation as to all defendants; they must plead that Barclays caused their loss. Rumors of accounting improprieties, insider sales, negative financial disclosures, an investigation of Enron’s miark-to-mark accounting, Skilling’s resignation, and Enron’s failed merger with Dynegy do not plead loss causation with respect to Barclays. Loss caused by Bar-clays conduct must be distinguished from loss caused by “the tangle of factors” that affect the price of Enron stock; there must be some disclosure of truth related to Barclays’ earlier actionable conduct that eliminates inflation in the stock price. Barclays complains that Plaintiffs now argue that another Barclays-Enron transaction, “Nikita,” which closed -in the third quarter of 2001, was publicly disclosed before Enron’s bankruptcy and caused Plaintiffs’ injury. Barclays emphasizes that Nikita is not mentioned in the First Amended Consolidated Complaint. Even if it had been, insists Barclays, it could not have caused Plaintiffs’ losses because the allegedly corrective disclosure regarding Nikita occurred on November 19, 2001 at a PowerPoint presentation by Enron to its bankers, the same day that the transaction appeared on Enron’s financial statements (third quarter 10 — Q); the “disclosure” could not have caused a decline in the stock price because it did not correct any previously false financial statement. While Plaintiffs argue that the same presentation disclosed Enron’s “prepay liability,” they do not relate it to prepay transactions in which Barclays participated. As for Lead Plaintiffs argument that Barclays’ involvement in Chewco continued after the transaction (with investors making payments to Barclays, which monitored their accounts), Barclays points out that these continuing acts are not pleaded in the First Amended Consolidated Complaint nor do they constitute actionable conduct under § 10(b). This Court previously rejected a similar argument with regard to the STDs of Deutsche Bank and ruled that the statute of repose is triggered by the first discrete act in each transaction. In re Enron Corp. Sec., Derivative & ERISA Litig., 310 F.Supp.2d 819, 844, 848-49 (S.D.Tex.2004). Lead Plaintiffs Sur-Reply (# 3751) Lead Plaintiff again cites Judge Lewis B. Kaplan’s opinion in In re Parmalat Sec. Litig., 376 F.Supp.2d 472 (S.D.N.Y.2005), as authority for its contention that it has adequately pleaded loss causation by asserting that Barclays concealed and disguised material risks concerning Enron’s financial well-being and that Plaintiffs were damaged when those risks materialized as Enron collapsed into bankruptcy: The Second Circuit recently explained in the context of fraud actions based on misstatements and omissions: “To plead loss causation, the complaint must allege facts that support an inference that [the defendant’s] misstatements and omissions concealed the circumstances that bear upon the loss suffered such that plaintiffs would have been spared all or an ascertainable portion of that loss absent the fraud”. In short, “the damages suffered by plaintiff must be a foreseeable consequence of any misrepresentation or material omission.” As the Court noted in its earlier opinion, loss causation does not, as the defendants would have it, require a corrective disclosure followed by a decline in price. The loss causation requirement applies as well where the claims are based on deceptive or manipulative conduct in violation of Rule 10b~5(a) and (c). By analogy, the loss causation requirement will be satisfied if such conduct had the effect of concealing the circumstances that bore on the ultimate loss. The schemes involving worthless invoices and the CSFB transactions created the appearance of assets or revenue where there was none and therefore concealed, among other things, the risks that Par-malat would be unable to service its debt and consequently suffer financial collapse. As the earlier opinion explained, that risk materialized when Parmalat suffered a liquidity crisis in December 2003. Id. at 510 (footnotes omitted). Moreover, insists Lead Plaintiff, its theory is not new. This Court previously wrote, [T]he plaintiffs have adequately pleaded that their loss was directly and foresee-ably caused by Defendants’ alleged fraudulent practices at Enron.... No-nexposure of Enron’s deceptive business practices and the concealment of its actual financial condition directly and fore-seeably induced the plaintiffs to purchase securities at a highly inflated price until the Ponzi scheme bubble inevitably broke. In re Enron, 310 F.Supp.2d at 832. Lead Plaintiff has pleaded that Barclays and other banks “concealed” the true financial condition of Enron through Chewco and other secretly controlled partnerships and entities, until Enron collapsed under the weight of its debts and it filed for bankruptcy, the realization of the very risks Barclays worked to conceal. # 1388, ¶¶ 11, 18-20, 48, 66. Barclays’ Reply to Sur-Reply (# 3806) Barclays insists that Lead Plaintiff never asserted a theory based on “concealing the risk” of an investment. Moreover in the cases it cites, the defendants had made statements on specific subjects and therefore had an affirmative duty to disclose a particular risk and could be liable for material omissions about that risk. Lead Plaintiff concedes that its claims are under Rule 10b-5(a) and (c) and based on conduct, not material omissions under Rule 10b — 5(b), and thus are not about ah obligation and failure to disclose the risk of an investment. Regardless, insists Barclays, Lead Plaintiffs new argument does not satisfy the standard for pleading loss causation under Dura Pharmaceuticals. Lead Plaintiff is required to plead that each defendant’s actionable conduct, whether concealed or not, directly caused plaintiffs’ loss; in other words it must'plead that some risk was concealed by Barclays transactions with Enron that caused losses after those risks materialized. Because Lead Plaintiff fails to allege that any Barclay transactions were disclosed or unwound before the collapse of Enron, no disclosure or realization of the allegedly concealed risk caused plaintiffs’ loss. Barclays argues that the Parmalat court rejected plaintiffs’ efforts to pursue liability for transactions, in which banks made loans disguised as equity investments or assets as not actionable, aiding and abetting under Central Bank because “[a]ny deceptiveness resulted from the manner in which Parmalat or its auditors described the. transactions on Parmalat’s balance sheets and elsewhere.” Barclays claims that the Parmalat court did not address the sufficiency of plaintiffs loss causation allegations for those transactions. Court’s Decision Barclays has raised a’ number of issues here, which should be resolved not only for Barclays’ motion, but with respect to those pending • from other Defendants. In the course of this litigation, the relevant law has evolved and been modified and clarified, often in different ways by different courts, and the Court has attempted to address the problem, at times retroactively, as here. In addition to the impact of Dura Pharmaceuticals, the Court also reexamines the allegations against Barclays under Central Bank’s preclusion of aiding and abetting claims under § 10(b). As indicated earlier, the Court reads the Dura Pharmaceuticals opinion more broadly than does Barclays. First the Court observes that Dura Pharmaceuticals addressed only § 10(b) claims of misrepresentations and omissions, which would fall under Rule 10b-5(b). Contrary to Barclays’ contentions, Dura Pharmaceuticals did not address an umbrella scheme involving secondary actors nor conduct under Rule 10b-5(a) and (c), as does Newby Lead Plaintiff, but focuses on the alleged misleading statements of Dura Pharmaceuticals’ own managers and officers. Its holding was narrow, i.e, that to allege loss causation a plaintiff pleading a fraud-on-the-market claim under § 10(b) must plead more than that it purchased stock at an inflated price because of a defendant’s misrepresentation (or wrongful conduct) and thus suffered a loss. The Supreme Court did not specify or rigidly limit what must be pled; nor did it require a corrective disclosure rather than other ways that “relevant truth begins to leak out” or “makes its way into the market place.” 125 S.Ct. at 1631-32. Nor did it require complete disclosure. Id. Moreover, it held that a complaint need give defendants only general notice under a subjective standard, i.e., “some indication of the loss and the causal connection that the plaintiff has in mind.” 125 S.Ct. at 1634. Nor need the defendant’s fraud be the exclusive cause of plaintiffs loss, but only a substantial cause. Id. at 1632. This Court also interprets the opinion as permitting the pleading of loss causation under the notice standard of Rule 8 rather than applying the heightened requirements of Rule 9(b). Moreover, because in reversing the Ninth Circuit’s lenient pleading standard for loss causation, merely that plaintiff purchased securities at an inflated price because of misrepresentations by defendants), Dura Pharmaceuticals left standing the stricter requirements of other courts and because the Fifth Circuit has not ruled on the question of pleading loss causation since the Supreme Court issued its opinion, this Court has applied the standard of the Second Circuit, i.e., that the plaintiffs loss was foreseeable and was caused by the materialization of the concealed risk. See, e.g., Lentell v. Merrill Lynch & Co., 396 F.3d 161, 173 (2d Cir.2005), cert. denied, — U.S. ---, 126 S.Ct. 421, 163 L.Ed.2d 321 (2005). Moreover, in certifying the Newby class, the Court relied on the analysis by Judge Kap-lan in In re Parmalat Sec. Litig., 376 F.Supp.2d 472 (S.D.N.Y.2005), in which, as in Newby, claims were asserted against not only the corporate defendant Parmalat, its officers and directors, but also against outside accountants, lawyers, and banks based on both misrepresentations under Rule 10b-5(b), and on a “device, scheme or artifice to defraud” and/or “any act, practice or course of business which operates or would operate as a fraud or deceit upon any person” in connection with the purchase of sale of any security under Rule 10b-5(a) and (c). The Court does the same here with regard to the allegations against Barclays. As indicated, in its opinion and order #4735 this Court adopted the SEC’s test for primary liability under Rule 10b-5(a) and (c). It appears to be in accord with Judge Kaplan’s analysis in Par-malat. Judge Kaplan pointed out that before the issuance of Central Bank, “the vast majority of Rule 10b-5 cases has targeted false or misleading statements, conduct prohibited by subsection (b) of the Rule” and did not focus on the language of subsections (a) and (c) other than to “target certain forms of manipulative trading activity.” Parmalat, 376 F.Supp.2d at 497. He opined, Presumably one reason for this is that the essence of fraud or deceit, at least at common law, is a misrepresentation that induces detrimental reliance. This theory of recovery is familiar, and it therefore was not controversial to base private damages actions for Rule 10b-5 violations on this pattern. Moreover, any deceptive device or practice, other than one involving manipulative trading activity, logically requires that somebody misrepresent or omit something at some point, even though the device could entail more than the misrepresentation. As it was widely agreed [before Central Bank ] that Rule 10b-5 prohibited misrepresentations and omissions, and aiding and abetting liability also was uncontroversial, the path of least resistance for a plaintiff suing based on a deceptive arrangement with multiple actors was to allege that one actor had misrepr