Full opinion text
OPINION AND ORDER HARMON, District Judge. Pending before the Court in the above referenced cause alleging securities fraud under Texas statutory and common law inter alia are (1) Defendant Schuyler M. Tilney’s (“Tilney’s”) motion to dismiss (instrument # 47) Plaintiffs’ First Amended Complaint under Fed.R.Civ.P. 9(b) and 12(b)(6); and (2) Defendants Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch & Company, Inc.’s (collectively, “Merrill Lynch’s”) partial motion to dismiss (# 48) Plaintiffs’ First Amended Complaint. Plaintiffs American National Insurance Company, American National Investment Accounts, Inc., SM & R Investments, Inc., American National Property and Casualty Company, Standard Life and Accident Insurance Company, Farm Family Life Insurance Company, Farm Family Casualty Insurance Company, and National Western Life Insurance Company were purchasers or “holders” of Enron and Enron-related securities from 1997-2001, the “relevant” period of alleged wrongdoing. Specifically, Plaintiffs American National Insurance Company, American National Investment Accounts, Inc., SM & R Investments, Inc., and Standard Life and Accident Insurance Company bought Enron common stock during the “relevant” period. American National Insurance Company purchased Enron commercial paper and an Enron bond in 2001. Farm Family Life Insurance Company and Farm Family Casualty Insurance Company purchased Enron preferred stock in 1993, and Farm Family Life Insurance additionally purchased an Enron bond in 1992; these entities held these securities throughout the relevant period. Finally, National Western Life Insurance Company bought Enron bonds in 1992 and 1993 and continued to hold them through the relevant period. #46 at ¶ 37. Plaintiffs claim they suffered substantial losses in the value of their securities when Enron collapsed and filed for bankruptcy protection on December 2, 2001. Plaintiffs allege that Defendants helped Enron conceal its deteriorating financial condition from the investing public and conspired with Enron to “cook its books” through deceptive transactions, specifically the Nigerian Barge, Power Trades, and LJM2 transactions in the end of 1999 and in 2000, with ongoing effects. Merrill Lynch and others purportedly devised or executed these transactions to hide Enron’s fraudulent accounting from rating agencies and investors, as well as issued through its analysts, even as Enron was descending into bankruptcy in late 2001, “buy” or “strong buy” recommendations for Enron securities, which Merrill Lynch knew would be “widely disseminated in the financial news media” and would be “available to Plaintiffs and other investors.” First Amended Complaint (# 46) at ¶¶ 34, 510-24. “The conspiracy amounted to a giant Ponzi scheme whereby Defendants helped Enron raise ever-increasing amounts of cash to make outstanding debt payments and maintain a facade of “ ‘normal’ operations.” ” # 46 at 4, ¶ 26. The complaint further asserts that the Nigerian Barge Transaction and the Power Trades Transaction resulted in Enron’s recognition of approximately $60 million in income for the fourth quarter of 1999, raising net income from $199 million to $259 million, a 30% increase; the transactions also enabled Enron to meet its earnings targets. Id. at ¶¶ 329-30. The ultimate result was to increase Enron’s stock price and enable Enron to raise millions of dollars from the bond market at investment grade interest rates. Id. at ¶330. The factual allegations against Merrill Lynch and Tilney are mostly contained in ¶¶ 304-464 of the First Amended Complaint (# 46). The governing complaint asserts four causes of action under Texas law: (1) aiding and abetting statutory fraud by Enron under the Texas Securities Act, Texas Revised Civil Statute Annotated Article 581-33 F(2) (West 2002) (“TSA”); (2) aiding and abetting statutory fraud by Enron under Section 27.01(d) of the Texas Business and Commerce Code (West 2002); (3) common law fraud; and (4) conspiracy to commit fraud. In essence Defendants’ motions seek to dismiss the last three causes of action, all holder claims, and possible time-barred claims asserted under the TSA. I. Standards of Review As stated in 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure Civ.3d § 1204 at 104-05 (West 2004), The manner and details of pleading in the federal courts are governed by the Federal Rules of Civil Procedure regardless of the source of substantive law to be applied in the particular action.... It no longer can be doubted that the rules regarding the standard of specificity to be applied to federal pleadings, the pleadings allowed in the federal courts, the form of the pleadings, the special requirements for pleading certain matters, the allocation of the burden of pleading among the parties, and the signing of pleadings by an attorney of record or an unrepresented party, all are governed by the federal rules and not by the practice of the courts in the state in which the federal court happens to be sitting. See also In re Enron Corp. Sec., Derivative & “ERISA” Litig., 388 F.Supp.2d 780, 783-84 (S.D.Tex.2005) (and cases cited therein). A. Rule 9(b) Federal Rule of Civil Procedure 9(b) provides, In 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 must be averred generally. “In every case based upon fraud, Rule 9(b) requires the plaintiff to allege as to each individual defendant ‘the nature of the fraud, some details, a brief sketch of how the fraudulent scheme operated, when and where it occurred, and the participants.” Hernandez v. Ciba-Geigy Corp. USA, 200 F.R.D. 285, 291 (S.D.Tex.2001). In a securities fraud suit, the plaintiff must plead with particularity the circumstances constituting the alleged fraud: Rule 9(b) requires the plaintiff to “ ‘specify the statements contended to be fraudulent, identify the speaker, state when and where the statements were made, and explain why the statements were fraudulent.’ ” Southland Securities Corp. v. INSpire Ins. Solutions, Inc., 365 F.3d 353, 362 (5th Cir.2004), quoting Williams v. WMX Technologies, Inc., 112 F.3d 175, 177-78 (5th Cir.1997), cert. denied, 522 U.S. 966, 118 S.Ct. 412, 139 L.Ed.2d 315 (1997). “ ‘In cases concerning fraudulent misrepresentation and omission of facts, Rule 9(b) typically requires the claimant to plead the type of facts omitted, the place in which the omissions should have appeared, and the way in which the omitted facts made the representations misleading.’” Carroll v. Fort James Corp., 470 F.3d 1171, 1174 (5th Cir.2006), quoting United States ex. rel. Riley v. St. Luke’s Episcopal Hosp., 355 F.3d 370, 381 (5th Cir.2004). Although Rule 9(b) allows a plaintiff to plead intent to deceive or defraud generally, a mere conclusory statement that the defendant had the required intent is insufficient; the plaintiff must set forth specific facts that raise an inference of fraudulent intent, for example facts that show the defendant’s motive. Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1068 (5th Cir.1994); Melder v. Morris, 27 F.3d 1097, 1102 (5th Cir.1994). Intent to deceive or defraud usually must be proved by circumstantial evidence, but to establish a material fact, that evidence “ ‘must transcend mere suspicion.’ ” IKON Office Solutions, Inc. v. Eifert, 125 S.W.3d 113, 124 (Tex.App.-Houston [14th Dist.] 2003, pet. denied). Although a party’s intent to defraud is determined at the time the party made the misrepresentation, “it may be inferred from the party’s subsequent acts after the representation is made.” Id.; see also Spoljaric v. Percival Tours, Inc., 708 S.W.2d 432, 434 (Tex.1986). The court should not view each piece of circumstantial evidence separately, but should weigh the evidence as a whole. IKON, 125 S.W.3d at 124. “Intent is a fact question uniquely within the realm of the trier of fact because it so depends upon the credibility of the witnesses and the weight to be given to their testimony.” Spoljaric v. Percival Tours, Inc., 708 S.W.2d at 434. The Fifth Circuit, although construing Rule 9(b) strictly, has recognized an exception and permits the requirements to be “relaxed” where facts relating to the fraud are “peculiarly within the perpetrator’s knowledge”; then the alleged fraud “may be pled on information and belief, provided the plaintiff sets forth the factual basis for his belief.” United States ex rel. Russell v. Epic Healthcare Management Group, 193 F.3d 304, 308 (5th Cir.1999), citing United States ex rel. Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir.1997) (warning that the exception “must not be mistaken for license to base claims of fraud on speculation and conclusory allegations.”). The relaxed standard is not applicable where the information is available from another source or where the plaintiff fails to allege a factual basis for his beliefs. Sealed Appellant I v. Sealed Appellee I, 156 Fed.Appx. 630, 634 (5th Cir.2005) (plaintiff must allege sufficient factual basis for his belief defendant committed fraud, e.g., particular documents containing false statements, identified by number, date or otherwise, or explain how he tried, but failed to obtain the information, whom he contacted, etc.). A dismissal for failure to plead with particularity in accordance with Rule 9(b) is treated as a Rule 12(b)(6) dismissal for failure to state a claim. Lovelace v. Software Spectrum, Inc., 78 F.3d 1015, 1017 (5th Cir.1996). If it appears that given an opportunity to amend the pleading, the plaintiff would be able to state a claim upon which relief could be granted, the court should grant leave to amend. People’s Choice Home Loan, Inc. v. Mora, No. 3:06-CV-1709-G, 2007 WL 708872, *4 (N.D.Tex. Mar. 7, 2007), citing Kennard v. Indianapolis Life Ins. Co., 420 F.Supp.2d 601, 608-09 (N.D.Tex.2006). B. Rule 12(b)(6) Dismissal under Rule 12(b)(6) is disfavored and a motion to dismiss under the rale is rarely granted. Lowrey v. Texas A & M University System, 117 F.3d 242, 247 (5th Cir.1997). The court must construe the complaint liberally in favor of the plaintiff and all well pleaded facts must be taken as true and any doubts regarding the sufficiency of the claim must be resolved in favor of the plaintiff. Id.; Jones v. Alcoa, Inc., 339 F.3d 359, 362 (5th Cir.2003). Nevertheless conclusory allegations and unwarranted factual deductions will not suffice to avoid a motion to dismiss. United States ex rel. Willard v. Humana Health Plan of Texas, Inc., 336 F.3d 375, 379 (5th Cir.2003). Dismissal is not proper “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.” Lowrey, 117 F.3d at 247, citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). II. Applicable Substantive Law A. TSA A claim for secondary liability for another party’s primary violations of the TSA art. 581-33(F)(2) may be based on either (1) control person liability (“[a] person who directly or indirectly controls a seller, buyer, or issuer of a security”) or on (2) aider and abettor liability (permitting suit against one “who directly or indirectly with intent to deceive or defraud or with a reckless disregard for the truth or the law materially aids a seller, buyer, or issuer of a security.”). Plaintiffs’ claims against Merrill Lynch and Tilney here fall into the second category. An aider and abettor is jointly and severally liable with the primary violator “to the same extent as if he were” the primary violator. Art. 581-33(F)(2). To state a claim for aider and abettor liability under the TSA, a plaintiff must allege that (1) there was a primary violation of the securities laws, here allegedly by Enron, (2) the aider and abettor had a general awareness of his role in the violation, (3) the aider and abettor gave substantial assistance in the violation, and (4) the aider and abettor intended to deceive the plaintiff or acted with reckless disregard for the truth of the primary violator’s misrepresentations. In re Enron Corp. Sec., Derivative & ERISA Litig., 235 F.Supp.2d 549, 568 (S.D.Tex.2002). See also Sterling Trust Co. v. Adderley, 168 S.W.3d 835, 842 (Tex.2005) (holding that as the statute’s scienter requirement for aiding and abetting, “the TSA’s 'reckless disregard for the truth or the law’ standard means that an alleged aider can only be held liable if it rendered assistance ‘in the face of a perceived risk’ that its assistance would facilitate untruthful or illegal activity by the primary violator.... In order to perceive such a risk, the alleged aider must possess a “general awareness that his role was part of an overall activity that was improper.” ”). Furthermore, “the TSA does not require the aider to have had direct dealing with the defrauded party; indeed a person who ‘materially aids a seller’ may have no contact at all with the investors.” Sterling Trust, 168 S.W.3d at 843. The TSA also does not require an investor to prove he relied on alleged misrepresentations or omissions. In re Westcap Enterprises, 230 F.3d 717, 726 (5th Cir.2000). B. Section 27.01 of the Texas Business and Commerce Code For a primary violation of the statute the elements of fraud under the Texas Business and Commerce Code § 27.01(a)(1) (2002) in relevant part are: (1) false misrepresentation of a past or existing material fact ... (A) made to a person for the purpose of inducing that person to enter into a contract; and (B) relied on by that person in entering that contract. Plaintiffs have alleged facts to show that Enron, though not a party here, was such a primary violator. Moreover, because the statute is derived from common law fraud, Plaintiffs must show that they actually and justifiably relied upon Enron’s allegedly fraudulent misrepresentations. Haralson v. E.F. Hutton Group, Inc., 919 F.2d 1014, 1025 & n. 4 (5th Cir.1990), abrogated on other grounds, Gustafson v. Alloyd Co., Inc., 513 U.S. 561, 115 S.Ct. 1061, 131 L.Ed.2d 1 (1995). The burden to show “justifiable” reliance is lighter than that for “reasonable reliance.” Id. at 1025. “To determine justifiability, courts inquire whether-given a fraud plaintiffs individual characteristics, abilities, and appreciation of facts and circumstances at or before the time of the alleged fraud-it is extremely unlikely that there is actual reliance on the plaintiffs part.” Id. at 1026. Unlike common law fraud, Section 27.01 does not require proof of a defendant’s knowledge or recklessness in order to recover actual damages. Diversified, Inc. v. Walker, 702 S.W.2d 717, 723 (Tex. App.-Houston [1st Dist.] 1985, writ refd n.r.e.) (“Sec. 27.01 is generally less demanding than common law fraud, imposing liability upon the maker of a misrepresentation without proof that he intended to deceive or knowledge that the representation was false.”); Robbins v. Capozzi, 100 S.W.3d 18, 26 (Tex.App.-Tyler 2002, no pet.) (“A cause of action for statutory fraud differs from the common law cause of action only in that it does not require proof that the false representation was made knowingly or recklessly,” but it must be made with the intent to induce the claimant into entering the transaction), citing Larsen v. Carlene Langford & Assoc., Inc., 41 S.W.3d 245, 248 (TexApp.-Waco, 2001, pet.denied); Fletcher v. Edwards, 26 S.W.3d 66, 77 (Tex.App.-Waco 2000, pet. denied). Plaintiffs bring their claims against Merrill Lynch and Tilney under § 27.01(d) for aiding and abetting Enron: A person who (1) has actual awareness of the falsity of a representation ... made by another person and (2) fails to disclose the falsity of the representation ... to the person defrauded, and (3) benefits from the false representation or promise commits the fraud described in Subsection (a) of this section and is liable to the person defrauded for exemplary damages. Actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness. C. Common law Fraud To prevail on a cause of action for common law fraud under Texas law, a plaintiff must prove that the defendant (1) made a misstatement or omission (2) of material fact (3) with the intent to defraud (4) on which the plaintiff relied, and (5) which proximately caused the plaintiff injury. Hernandez v. Ciba-Geigy Corp. USA, 200 F.R.D. 285, 291 (S.D.Tex.2001), citing Williams v. WMX Technologies, Inc., 112 F.3d 175, 177 (5th Cir.1997). See also Oppenheimer v. Prudential Sec. Inc., 94 F.3d 189, 194 (5th Cir.1996) (“The elements that are necessary to state a claim of common law fraud are basically identical [to those for statutory fraud]. The elements of a fraud are a material misrepresentation, which was false and which was either known to be false when made or was asserted without knowledge of its truth, which was intended to be acted upon, which was relied upon and which caused injury.”). “[A] defendant who acts with knowledge that a result will follow is considered to intend the result.” Ernst & Young, L.L.P. v. Pacific Mutual Life Ins. Co., 51 S.W.3d 573, 578-80 (Tex.2001) (concluding that Texas jurisprudence is consistent with the standard of the Restatement (Second) of Torts § 531 (1977) that the fraudfeasor intend or have “reason to expect” that the third party will act in reliance on the misrepresentation). (b) ... Importantly, rather than cooperate with, and testify before, governmental bodies investigating Enron's collapse, Tilney refused to testify by invoking his Fifth Amendment privilege against self-incrimination. He has also repeatedly invoked the Fifth Amendment in connection with Enron. (c) That Tilney benefited from his aid in concealing Enron’s false representations and omissions of material fact may also be inferred by Tilney's invocation of his Fifth Amendment rights. The Texas Supreme Court has recognized a cause of action for common law fraud when (a) a party conceals or fails to disclose a material fact within the knowledge of that party, (b) the party knows that the other party is ignorant of the fact and does not have an equal opportunity to discover the truth, (c) the party intends to induce the other party to take some action by concealing or failing to disclose the fact, and (d) the other party suffers injury as a result of acting without knowledge of the disclosed fact. Bradford v. Vento, 48 S.W.3d 749, 754-55 (Tex.2001). “Fraudulent concealment or non-disclosure is a subcategory of fraud that occurs when a party with a duty to disclose a material fact fails to disclose that fact.” GMAC Commercial Mortgage Corp. v. East Texas Holdings, Inc., 441 F.Supp.2d 801, 807 (E.D.Tex.2006), citing Schlumberger Technology Corp. v. Swanson, 959 S.W.2d 171, 181 (Tex.1997) (“Rebanee is an element of fraud. Fraud by nondisclosure is simply a subcategory of fraud because where a party has a duty to disclose, the non-disclosure may be as misleading as a positive misrepresentation of facts [citations omitted].”), and Bradford, 48 S.W.3d at 754-55. For fraud based on non-disclosure, the defendant must have a duty to disclose. When particular circumstances impose on a person a duty to speak, silence can constitute a false representation. World Help v. Leisure Lifestyles, Inc., 977 S.W.2d 662, 670 (Tex.App.-Fort Worth 1998, pet. denied). An affirmative duty to disclose may arise in four circumstances: (1)where there is a fiduciary or confidential relationship between the parties; (2) where a person voluntarily discloses information, he must disclose the whole truth; (3) when a person makes a representation and new information makes that earlier misrepresentation misleading or untrue; and (4) when a person makes a partial disclosure and conveys a false impression. Hoggett v. Brown, 971 S.W.2d 472, 487 (Tex.App.-Houston [14th Dist.] 1997, pet. denied); Id. See also Union Pacific Resources Group, Inc. v. Rhone-Poulenc, Inc., 247 F.3d 574, 586 (5th Cir.2001); GMAC Commercial, 441 F.Supp.2d at 808. A plaintiff must allege facts showing that a defendant had such a duty to disclose under Rule 9(b). Carroll, 470 F.3d at 1174. Where a duty to disclose exists, the elements of fraud by nondisclosure are “(1) a party conceals or fails to disclose a material fact within the knowledge of that party; (2) the party knows that the other party is ignorant of the fact and does not have an equal opportunity to discover the truth; (3) the party intends to induce the other party to take some action by concealing or failing to disclose the fact, and (4) the other party suffers injury as a result of acting without knowledge of the undisclosed fact.” Celanese Corp. v. Coastal Water Authority, 475 F.Supp.2d 623, 637, 2007 WL 471160, *8 (S.D.Tex. Feb.9, 2007) (applying Texas law), citing Daugherty v. Jacobs, 187 S.W.3d 607, 618 n. 3 (TexApp.-Houston [14th Dist.] 2006, no writ), and Custom Leasing, Inc. v. Texas Bank & Trust Co. of Dallas, 516 S.W.2d 138, 142 (Tex.1974). Texas also recognizes a common law fraud cause of action where the false representation was made with the intent of reaching and deceiving a third person and thereby causing that third party injury; privity is not required between the fraud-feasor and the person he is trying to influence. Section 531 of the Restatement (Second) of Torts (1977) requires more than probability of reliance and more than an obvious risk that a misrepresentation might be repeated to the third party; the fraudfeasor must “have information that would lead a reasonable man to conclude there is an especial likelihood that it will reach those persons and will influence their conduct.” Ernst & Young, 51 S.W.3d at 581, citing § 531 cmt. d (1977). Reliance is an element of common law fraud, regardless of whether the fraud is by affirmative misrepresentation or by nondisclosure. Celanese Corp. v. Coastal Water Authority, 475 F.Supp.2d 623, 637 (S.D.Tex.2007) (applying Texas law). Because one must often determine whether particular circumstances impose a duty to disclose information where the claim is based on a failure to disclose and whether plaintiffs justifiably relied on a misrepresentation or nondisclosure, “[r]eliance is ordinarily a question of fact for the fact-finder” and “is not a proper matter for dismissal on the pleadings.” Id., citing Jones v. Ray Ins. Agency, 59 S.W.3d 739, 754 (Tex.App. —Corpus Christi 2001, pet. denied, 92 S.W.3d 530 (Tex.2002)), and 1001 McKinney Ltd. v. Credit Suisse First Boston Mortgage Capital, 192 S.W.3d 20, 30 (Tex.App.-Houston [14th Dist.], 2005, pet. denied) (“In the context of common law fraud, courts have uniformly treated the issue of justifiable reliance as a question for the factfinder.... The question of justifiable reliance depends heavily on the relationship between the parties and their relative sophistication”). D. Conspiracy to Defraud The elements of a cause of action for civil conspiracy in Texas are (1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as the proximate result. Juhl v. Airington, 936 S.W.2d 640, 644 (Tex.1990). The fourth element is sometimes phrased as a meeting of the minds “to accomplish an unlawful purpose or to accomplish a lawful purpose by unlawful means.” Transport Insurance Co. v. Faircloth, 898 S.W.2d 269, 278 (Tex.1995). The “gist” of a “civil conspiracy” is the injury the conspirators intend to cause. Conspiracy is a derivative tort, because recovery is not based on the conspiracy, i.e., the agreement, but on the injury from the underlying tort, here allegedly fraud. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex.1996). Thus to be liable for conspiracy, a defendant must also participate in the underlying fraud. Id. Furthermore, if a plaintiff cannot adequately allege with particularity or ultimately prove an element of the underlying fraud, the conspiracy claim also fails. Hernandez v. Ciba-Geigy Corporation USA 200 F.R.D. 285, 292 (S.D.Tex.2001); United States ex rel. Riley v. St. Luke’s Episcopal Hosp., 355 F.3d 370, 380 (5th Cir.2004). Typically a conspiracy is proved by circumstantial evidence. Schlumberger, 435 S.W.2d at 858, citing Jernigan v. Warner, 12 Tex. 189 (1854). “Circumstantial evidence may be used to establish any material fact, but it must constitute more than mere suspicion.” Transport, 898 S.W.2d at 278, citing Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 927-28 (Tex.1993) (“some suspicion linked to other suspicion produces only more suspicion, which is not the same as evidence.”); Schlumberger, 435 S.W.2d at 858 (“vital facts may not be proved by unreasonable inferences from other facts and circumstances”; any vital fact must be proved “by evidence amounting to something more than a mere scintilla”). The evidence can include acts by or statements of the alleged conspirators. International Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567, 581-82 (Tex. 1963) (“The general rule is that conspiracy liability is sufficiently established by proof showing concert of action or other facts and circumstances from which the natural inference arises that the unlawful overt acts were committed in furtherance of common design, intention, or purpose of the alleged conspirators.”). III. Factual Allegations Against Merrill Lynch and Tilney The complaint alleges that when Enron was unable to sell at a profit several power-generation barges located off the coast of Nigeria, Enron’s Treasurer, Jeff McMahon, proposed to Merrill Lynch’s relationship banker, Robert Furst, that Merrill Lynch “buy” an interest in the Nigerian Barge project by having a Merrill Lynch SPE (later dubbed “Ebarge”) purchase stock in an Enron subsidiary for $28 million and in return receive certain future revenue from sales of electricity to Nigeria under a power purchase agreement. #46 at ¶¶ 333-34. Accompanied by an “Appropriation Request” explaining that Merrill Lynch would be assuming no risk because it would be relieved of the investment within six months by Enron, a December 21, 1999 Merrill Lynch interoffice memorandum stated that Enron saw the transaction “as a bridge to permanent equity” and enumerated, as the terms of the short-term deal, that (1) Enron would book “$12MM in earnings,” (2) Merrill Lynch’s “hold would be for less than six months,” and (3) Merrill Lynch would enjoy a 22.5% return. Id. at ¶ 334. According to the complaint, the SEC determined that because Enron provided $21 million of the purchase price to the Merrill Lynch SPE through a loan that was non-recourse to Merrill Lynch, Merrill Lynch only had to provide $7 million, strictly as an accommodation to Enron, which a Merrill Lynch internal document described as a “relationship loan.” Id. at ¶ 335. Furst then urged approval of the deal because “Enron was an important client, and because of the magnitude of financial benefits available to both Enron and Merrill Lynch.” Id. at ¶ 381. The complaint further points out that James Brown, a Merrill Lynch managing director, warned Merrill Lynch at the time that the deal could lead to “reputational risk, specifically aid[ing and]/abet[ting] Enron income manipulation.” Id. at ¶¶ 341-42. Meeting on December 22, 1999 regarding the proposed transaction, Merrill Lynch’s Debt Markets Committee, in light of Brown’s voiced concern, insisted that Enron guarantee that Merrill Lynch’s participation would not exceed six months and let Enron know that Merrill Lynch expected future Enron business. Id. at ¶ 345. The complaint further alleges that Til-ney, the Managing Director of Global Energy and Power, Global Marks & Investment Banking for Merrill Lynch, and others at Merrill Lynch were sent a memorandum, dated December 21, 1999, seeking quick consideration and approval of the Nigerian Barge transaction with Enron by the Debt Markets Commitment Committee. Id. at 336. The memorandum emphasized, so Tilney knew, there would be no risk for Merrill Lynch because Fastow guaranteed that Merrill would be taken out of the deal in six months and that it would receive $28 million in cash flow (¶ 336-37) for its short-term services. The complaint alleges that Tilney “was a very strong supporter of the Nigerian Barge Transaction” according to sworn testimony of Merrill Lynch managing directors James Brown on April 28, 2003 and Jeffrey Kronthal on May 7, 2003 (¶ 339), that he “put on a lot of undue pressure to get deals closed-no matter what the legal issues or barriers were” (¶ 319), and that he “pushed for and strongly recommended approval” of the Nigerian Barge and Power Trades as “one of Enron’s highest priorities” because “they would enable Enron to achieve ‘off-balance sheet’ treatment for certain assets.” The complaint further states that Tilney, along with Merrill Lynch’s Davis and Daniel Bayly, received verbal confirmation from Fastow on December 22, 1999 that Enron would take Merrill Lynch out of the deal within six months and that they told Fastow that Merrill Lynch expected future Enron business as a reward # 46 at ¶ 347. Merrill Lynch drafted a letter agreement on December 23, 1999 which recited that Merrill Lynch’s equity interest would “be subsequently sold to third party equity investors or purchased by Enron or an affiliate” and that Merrill Lynch, the “exclusive advisor” for the transaction, would receive “a yield of 15.00% per annum” on its investment. The complaint asserts, “Thus, Merrill Lynch knew that the risk of ownership of the barges never passed from Enron and therefore also knew that Enron could not account for the transaction as a sale under GAAP rules.” Id. at ¶ 348. The letter agreement that Merrill Lynch and Enron actually entered into on December 29, 1999 eliminated the specific yield figure to be paid to Merrill Lynch and the promise to take Merrill Lynch out of the deal within six months because their inclusion would have prevented Enron from accounting for the transaction as a sale under GAAP rules and for properly recognizing revenue from the transaction. Id. at ¶¶ 348-40. The Nigerian Barge Transaction closed on December 29, 1999; it allowed Enron to report about $12 million in earnings in the fourth quarter of that year in its quarterly and annual financial reports. Id. at ¶ 351. Six months later, Merrill Lynch sent an email and was drafting a letter on June 14, 2000 to remind Enron about the guaranteed takeout, when Enron told Merrill Lynch that LJM2, an Enron affiliate, would purchase Merrill Lynch’s $7,525 equity interest in the Nigerian Barge SPE because no third-party buyer had been found for the barges. Id. at ¶¶ 352-55. That purchase had been presented to the Merrill Lynch LJM2 limited partners, who included Tilney, Bayly, Furst, and Brown, as early as March of 2000, so these Merrill Lynch employees knew or had reason to know that Enron was proposing to have LJM2 purchase the barges from Merrill Lynch; the Merrill Lynch LJM2 limited partners also knew from their arrangement with Enron that the purpose of the transaction was to manipulate Enron’s 1999 statements, but they did not tell any non-Merrill Lynch limited partners. Id. at ¶ 356. Thus the Merrill Lynch limited partners alone profited from the transaction, while the other limited partners unknowingly invested in what was an unprofitable deal for them. Id. Merrill Lynch gained a $525, 000 premium on the transaction (a 15% interest rate, annually) and a $250,000 “advisor” fee, totaling an annual 22.14% return, as agreed beforehand, on its six-month, guaranteed $7 million “investment” in the Nigerian Barge Transaction. Plaintiffs highlight the indictment and conviction of several Merrill Lynch executives for criminal conduct in connection with the Nigerian Barge Transaction even though the convictions were overturned by the Fifth Circuit on the counts of conspiracy and wire fraud based on the government’s “honest services” theory of fraud. See, e.g., # 46 at ¶¶ 358-69. United States v. Brown, et al., CR NO. H-03-363 (S.D.Tex.), aff'd in part, rev’d in part, and vacated in part, 459 F.3d 509 (5th Cir.2006), cert. denied, 75 U.S.L.W. 3397, - U.S. -, 127 S.Ct. 2249, 167 L.Ed.2d 1089 (2007) (No. 06-975). The government has since decided to retry the case under a different fraud theory. Meanwhile, the complaint asserts, Merrill Lynch, in an agreement with the Department of Justice dated September 17, 2003, admitted that it is liable for conspiracy with Enron to commit fraud for all its employees’ misconduct during the Nigerian Barge Transaction and the Power Trades Transaction (discussed infra) and has accepted responsibility for any acts by its employees giving rise to an violation of federal criminal law, and would not make any public statements, in litigation or otherwise, that contradict its acceptance of responsibility. Id. at ¶¶ 369-71, 394. According to the complaint, also in late 1999 Enron again approached Merrill Lynch with another “entirely risk-free” deal, the “Power Trades Transaction,” that would artificially inflate Enron’s reported income for that year by approximately $50 million. Id. at ¶ 375. “Because of the accounting trickery” that would be involved in reporting the transaction, Enron required Merrill Lynch to enter into a confidentiality agreement, executed on December 8, 1999 by Enron North American Corporation and Merrill Lynch Capital Markets, that barred Merrill Lynch from disclosing any information about the proposed electricity trade transactions. Id. at ¶ 376. Furthermore Enron offered Merrill Lynch $17 million as an incentive to participate in the deal. Id. at ¶ 377. Merrill Lynch’s Dan Gordon, with the help of Furst and Tilney, then prepared a memorandum outlining the proposed deal, which involved two back-to-back options, and sent it to the Special Transactions Review Committee (“STRC”) to explain the deal. Id. at ¶ 378. The memorandum, which “highlighted the transaction’s positive aspects,” stated that Enron would sell to Merrill Lynch a physically-settled call option, while Merrill Lynch simultaneously would sell Enron a financially-settled call option, with the terms of both regarding quantity, pricing, market locations and terms nearly identical, in essence cancel-ling each other out. Id. No energy was actually ever exchanged under these contracts. Id. Gordon’s memorandum characterized the options as “mirror image[s]” and observed, “the proposed transaction is ‘back to back’ and is therefore ‘delta-neutral’ ” Id. Thus Merrill Lynch knew that there was no commodity price risk and that the transactions were linked. Id. at ¶ 379. A December 29, 1999 memorandum states that the documentation is ready and that the controlling agreements “will ‘cross-default’ to one another. As such, in the event that one trade ‘dissolves’ the other trade will also ‘dissolve.’ ” Id. The memorandum further indicated that Merrill Lynch would be paid $17 million based partly on “the benefits enjoyed by ENRON as a result of the transaction.” Id. at ¶ 380. A complaint filed by the SEC alleged, “Enron was initially surprised regarding the size of the fee because the transaction posed little risk to Merrill Lynch, but ultimately agreed to pay a $17 million fee given the importance of the transaction to its year-end earnings.” Id. at ¶ 386. That complaint further asserted that the STRC, when it reviewed the transaction, also knew that the fee “bore no relationship to any work or risk undertaken by Merrill.” Id. at ¶ 386. Plaintiffs’ complaint charges, “If the Power Trades were actual trades driven by market forces, the large discrepancy in option premiums (Enron was obligated to pay $17 million in excess of what it was scheduled to receive from Merrill Lynch) would not exist. The only purpose to this discrepancy was a way for Enron to compensate Merrill Lynch for participating in the transaction.” Id. at ¶ 387. Furst and Tilney pushed for immediate approval of the transactions, emphasizing that they were among Enron’s highest priorities, to allow Enron to achieve “off-balance sheet” treatment for certain assets and because Enron was an important client and the transaction would bring size-able financial benefits to both participants. Id. at ¶ 381. The STRC met twice on December 30, 1999. In the first meeting, concern was expressed about the propriety of Enron’s planned accounting for the transactions and the effect they could have on Enron management compensation. Id. at ¶ 382. Realizing that the sole purpose of the transactions was to generate approximately $50 million in bogus income for Enron, and that the Power Trades Transaction had no legitimate business purpose, the STRC rejected the deal. Id. at ¶ 383. After the first meeting, Furst and Tilney contacted Richard Causey for assurances that the proposed accounting treatment had actually been approved by Enron and Arthur Andersen. Id. During the second meeting of the STRC that same day, Tilney and Furst informed the STRC that “Enron’s only purpose for the [Power Trades] transaction was to achieve year-end earnings, a true cooking of the books-arrangement” (¶ 383). Thus Merrill Lynch’s management knew there was no legitimate business purpose behind the transactions. Moreover Causey confirmed that Enron would report $50-60 million as earnings on the transactions, that this amount was material to Enron, and that it would affect senior management bonuses. Id. at ¶ 383. Furthermore Causey objected to Merrill Lynch’s speaking with Arthur Andersen directly about the Power Trades, so Merrill Lynch agreed instead to receive a letter from Enron stating that Arthur Andersen had approved Enron’s intended accounting. Id. Causey signed a letter with such representations; it also stated that Merrill Lynch had not provided any accounting advice to Enron, nor had Enron relied on Merrill Lynch in any way to determine the appropriate market value of the power trades. Id. at ¶ 384. “For use as a future potential defense,” the letter was preserved in Merrill Lynch’s internal files with the statement, “Merrill Lynch did not Design or Contribute to the Accounting Components of the Proposed Transaction.” Id. at ¶ 385. On December 31, 1999, in time for Enron to report falsified earnings in its annual financial reports, Merrill Lynch closed the Power Trades Transaction with the knowledge that Enron’s accounting of the trades would manipulate its year-end earnings. Id. at ¶¶ 385, 388. In late May, 2000, according to the complaint, Enron requested that Merrill Lynch unwind the deal early and without receiving the promised $17 million fee. Id. at ¶ 389. In an email from Tilney to Dan Gordon, Tilney stated, “We were clearly helping them make earnings for the quarter and year-end (which had a great value in their stock price, not to mention personal compensation). What would you think was a fair number in the absence of relationship issues?” Id. at ¶ 389. The deal was unwound on June 30, 2000, with no energy ever having changed hands and with a payment of only $8.5 million to Merrill Lynch, half the amount originally agreed. Id. at ¶ 390. The complaint asserts that in supporting and pushing for approval of both the Nigerian Barge Transaction and the Power Trades Transaction, Tilney “acted with reckless contempt for the law and the truth” because even prior “to approving the transactions, Tilney knew that Enron’s accounting for the Nigerian Barge Transaction and the Power Trades Transaction would be both untruthful and, because they would be incorporated in SEC filings, illegal” (Id. at ¶ 492); that after Enron’s collapse Tilney continued the coverup of the fraudulent nature of the transactions (¶ 452); that instead of “explaining away his and Merrill’s” malfeasance to the Permanent Subcommittee on Investigations, “Tilney instead invoked his Fifth Amendment right against self incrimination” (¶ 454); and that his and others’ “failure to alert Plaintiffs and the investing public about the Enron misrepresentations Defendants helped make false ... confirms ... Merrill Lynch’s aid to Enron’s fraud and their willing, knowing, and purposeful participation in conspiracy with Enron to commit fraud” (¶ 456). The complaint also conclusorily alleges that Tilney “had extremely close relationships with Enron executives” (later identified as Jeff McMahon and Andrew Fastow, and Fastow’s wife) and that he “conspired with and aided Enron’s fraud.” Id. at ¶¶ 22, 316, 318. The complaint claims that following the collapse of Enron, after a criminal investigation, the Enron Task Force of the Department of Justice determined that Merrill Lynch had violated federal criminal laws in the Nigerian Barge and Power Trades Transactions. The complaint also asserts that the Securities and Exchange Commission’s and the Department of Justice’s investigations produced evidence that “establishes that Merrill Lynch conspired with Enron to cook its books and aid Enron in promulgating false financial statements.” Id. at ¶¶ 325-26. The complaint highlights, id. at ¶ 22, the fact that Tilney was fired by Merrill in September 2002 after he invoked his Fifth Amendment rights and refused to testify in an investigation into Enron’s collapse being conducted jointly by the Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”). Plaintiffs further claim that Tilney’s invocation of the Fifth Amendment “creates an inference of Tilney’s intentional wrongdoing.” Id. at ¶ 491. Regarding Merrill Lynch’s equity analysts, the complaint asserts that Enron required its investment banks and their employees to be “Enron boosters.” Id. at ¶ 396. Merrill Lynch accordingly “routinely and frequently produced and distributed glowing reports about Enron, about Enron’s management and about Enron’s prospects,” indeed “even after Merrill knew that Enron was technically insolvent.” Id. at ¶¶ 397, 405. As examples the complaint quotes from 2001 reports by Donato Eassey, Leo Kelser, and other Merrill Lynch analysts. Id. at ¶ 399-405. It also details the termination of analyst Jon Olson after Olson downgraded his rating of Enron stock from “buy” to “hold” on July 15, 1997, and Enron complained. Id. at ¶¶ 406-08, 411. His replacement, Donato Eassey, immediately upgraded Enron’s equity rating on November 16, 1998. Id. at ¶ 409. According to a January 18, 1999 email from Merrill Lynch’s Investment Banking Division to Merrill Lynch’s president, Merrill Lynch was later rewarded with “two significant mandates by Enron .... Total fees to Merrill Lynch for these two transactions alone should be $40-50 million.” Id. at ¶ 410. As a final basis for Merrill Lynch’s alleged liability, Plaintiffs assert that Merrill Lynch, Enron and others conspired to use LJM2, which was created in late 1992, “which devised and participated in a wide variety of investments and convoluted transactions which had the effect of transferring Enron wealth from Enron’s investors to Enron CFO Andrew Fastow and to LJM2’s limited partners,” and which was used to hide Enron’s liabilities and to perpetuate the Ponzi scheme. # 46 at ¶ 417. Although knowing from the start that Fas-tow’s dual roles, as Enron’s Chief Financial Officer, charged with protecting shareholders, and as a controller and decision-maker of LJM2, constituted an improper and obvious conflict of interest, Merrill Lynch proceeded with the placement of loans to LJM2 that generated substantial fees and allowed its executives (“select investors”) to invest in the SPE with unusually high rates of return. Id. at ¶¶ 419-20, 436. Specifically, Merrill Lynch established ML/LJM2, an investment vehicle through which its executives committed to invest about $16.6 million; Tilney committed $750,000. Id. at ¶ 436-39. Enron also used LJM2 to take Merrill Lynch out of the Nigerian Barge transaction. Id. at ¶428. Collecting substantial fees for its services, Merrill Lynch was instrumental in helping Fastow set up LJM2 and was the primary placement agent for seeking capital commitments for LJM2, for which Merrill Lynch was paid over $3 million. Id. at ¶ 430. Merrill Lynch never admitted publicly that the Nigerian Barge Transaction, the Power Trades Transaction, and LJM2 were used to promulgate false information about Enron’s finances or that Merrill Lynch’s recommendations to investors to purchase or hold Enron securities were based on false information. IY. Briefing on Motions to Dismiss A. Tilney’s Motion to Dismiss (# 47) Tilney seeks dismissal of the First Amended Complaint (1) to the extent that it includes claims for damages in connection with plaintiffs’ “holder claims”; (2) to the extent that it includes conspiracy and statutory and common law fraud claims for failure to state a claim and failure to allege fraud with particularity; and (3) because Plaintiffs’ Texas Securities Act claims are time-barred by the statute of limitations. Tilney provides no authority for his arguments nor supporting facts, but “adopts and incorporates herein the points and authorities set forth in support of the motion to dismiss” filed by the other Defendants. # 47 at 2. B. Merrill Lynch’s Partial Motion to Dismiss (# 48) Merrill Lynch repeats Tilney’s first two grounds for dismissal, but cites authority for them and analyzes the law as applied to the facts alleged in the First Amended Complaint. Merrill Lynch maintains that “holder” claims should be dismissed as matter of law because neither Texas statutory nor common law recognizes a cause of action based on them. By definition, holder claims do not arise from the purchases or sales of securities during the period of alleged wrongdoing and are therefore outside the scope of Section 27.01(a)(1)(A)(B) of the Texas and Commerce Business Code (2005) (requiring that an allegedly false representation of a material fact have been “made to a person for the purpose of inducing that person to enter into a contract; and relied on by that person in entering into a contract”), and they are outside the scope of Article 581-33(A)(2) of the TSA (2005) (requiring that a buyer allege that it purchased materials from the person against whom it alleges liability for an untrue statement or omission of a material fact). See Barsky v. Arthur Andersen, LLP, et al., No. Civ. A. H-02-1922, 2002 WL 32856818, *2 n. 3 (S.D.Tex. Aug.16, 2002). Other jurisdictions agree and have rejected holder claims under state or federal law or severely restricted them for significant policy reasons. See, e.g., Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 734-35, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975) (limited private cause of action under § 10(b) and Rule 10b-5 to purchasers and sellers of securities in part because one “who neither purchases nor sells securities but sues instead for intangible economic injury such as loss of a noncontrac-tual opportunity to buy or sell[] is more likely to be seeking a largely conjectural and speculative recovery in which the number of shares involved will depend on the plaintiffs subjective hypothesis”); Chanoff v. U.S. Surgical Corp., 857 F.Supp. 1011, 1018 (D.Conn.1994) (under Connecticut law, claims for damages based on the plaintiffs failure to sell or hedge their stock “too speculative to be actionable”), aff'd, 31 F.3d 66 (2d Cir.1994); Amlund v. Deloitte & Touche LLP, 199 F.Supp.2d 461, 489 (E.D.Va.2002) (“the claims of the retaining shareholders here fail adequately to plead causation between the misrepresentation and the harm”). Courts that have allowed holder claims have required the plaintiffs to meet heightened pleading standards and, in some cases, to prove that plaintiffs held onto securities as a result of information that they received through direct communications with the defendants. See, e.g., Rogers v. Cisco Sys., Inc., 268 F.Supp.2d 1305 (N.D.Fla.2003); Small v. Fritz Cos., Inc., 30 Cal.4th 167, 132 Cal.Rptr.2d 490, 65 P.3d 1255 (2003). Moreover, argues Merrill Lynch, the holder claims are derivative of a harm suffered directly by Enron, which filed for bankruptcy on December 2, 2001, and therefore are causes of action that belong to Enron’s bankruptcy estate and that cannot be brought directly by Plaintiffs. An action for damages based on a diminution in the value of a company’s securities is a derivative claim that cannot be brought directly by shareholders. Smith v. Waste Management, Inc., 407 F.3d 381, 385 (5th Cir.2005) (“when a corporation, through its officers, misstates its financial condition, thereby causing a decline in the company’s share price when the truth is revealed, the corporation itself has been injured”); Kramer v. Western Pacific Indus., Inc., 546 A.2d 348, 353 (Del.1988) (“Any devaluation of stock is shared collectively by all the shareholders, rather than independently by the plaintiff or any other individual shareholder”); Loewen v. Galligan, 130 Or.App. 222, 228, 882 P.2d 104 (Or.App. 1994) (an individual may not bring a direct claim against directors and officers where the only injury alleged is a diminution in the value of the company’s securities). Once a bankruptcy petition has been filed, derivative claims become property of the debtor’s estate. 11 U.S.C. § 541(a)(1) (defining property of the estate as “all legal and equitable interests of the debtor in property.”); Schertz-Cibolo-Universal City v. Wright (In re Educators Group Health Trust), 25 F.3d 1281, 1283-84 (5th Cir.1994) (when a corporation is in bankruptcy, a cause of action for direct damages to company is considered property of estate as a “legal and equitable interest of debtor” and cannot be pursued by individual plaintiffs); Matter of Consolidated Bancshares, Inc., 785 F.2d 1249, 1253-54 (5th Cir.1986) (“If an action belongs to a corporation under Texas law, then the action becomes the property of the estate once the bankruptcy petition is filed.”). The statutory and common law fraud claims must be dismissed for lack of factual specificity under Rule 9(b), insists Merrill Lynch. The First Amended Complaint (# 46) fails to allege specific misrepresentations or material omissions, nor does it plead adequately Plaintiffs’ reliance on such. Merrill Lynch insists that the First Amended Complaint, although filed long after the close of discovery and with the benefit of it, makes only conclusory allegations that Merrill Lynch made misrepresentations about Enron’s financial condition on which Plaintiffs justifiably relied. They merely refer generally to Enron’s financial statements filed with the SEC, “upbeat analyst reports” from Merrill Lynch that portrayed “Enron as a strong, well-managed company with excellent growth prospects” or recommendations “touting” Enron that were “disseminated through various media” to plaintiffs and on which they justifiably relied. Not a single instance of a misrepresentation by Merrill Lynch to one of the Plaintiffs is identified, nor have Plaintiffs adequately pled justifiable reliance with specific facts. As for Plaintiffs’ conspiracy claims, Merrill Lynch points out, “Civil conspiracy is a derivative tort and a defendant’s liability for conspiracy depends on participation in some underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable.” RTLC AG Products, Inc. v. Treatment Equipment Co., 195 S.W.3d 824, 833 (Tex.App.2006). “The elements of a civil conspiracy are: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or course of action; (4) one or more unlawful, overt acts; and (5) damages as a proximate result.” Id., citing Tri v. J.T.T., 162 S.W.3d 552, 556 (Tex.2005). The Fifth Circuit has held that civil conspiracy to commit a tort sounds in fraud and is governed by Rule 9(b)’s requirement that it be pled with particularity. Castillo v. First City Bancorporation of Texas, Inc., 43 F.3d 953, 960 (5th Cir.1994). Merrill Lynch contends that the claim has no factual support pled with the particularity required by Rule 9(b), but only boilerplate and conclusory statements that Defendants and Enron had an agreement to accomplish an unlawful common plan to defraud the investing public generally and Plaintiffs specifically. There are no allegations that representatives of Enron met with Merrill Lynch representatives and reached a “meeting of the minds” that they would work together on the various fraudulent transactions alleged. C. Plaintiffs’ Response in Opposition (#51) 1. Tilney’s Individual Arguments for Dismissal Relating to Tilney’s bare-bones assertion that the TSA claims are barred by the statute of limitations, Plaintiffs complain it is a conclusory statement made without citation to authority or provision of any factual support. First of all, the “holders,” i.e., National Western, Farm Family Life Insurance Company, and Farm Family Casualty Insurance Company, do not assert any TSA claims against Merrill Lynch. Furthermore, under the TSA’s general limitations period and period of repose, claims must be brought the earlier of (a) more than three years after the discovery of the untruth or omission, or after discovery should have been made by the exercise of reasonable diligence or (b) within five years after the sale. Tex.Rev.Civ. Stat. art. 581-33(H)(2). Plaintiffs insist that the limitations began to run after December 2, 2001, when Enron filed for bankruptcy. Plaintiffs’ suit against Tilney was filed on October 11, 2002, less than one year later. They point out that Tilney, who, as a Rule 12(b)(6) movant, bears the burden of demonstrating that Plaintiffs can prove no set of facts to support their claims and entitle them to relief, has not stated, no less demonstrated, that Plaintiffs discovered or should have discovered their claims on any earlier date. Moreover, a limitations bar is a fact question not appropriate for resolution on a motion to dismiss. Childs v. Haussecker, 974 S.W.2d 31, 44 (Tex.1998). If a defendant moves for summary judgment on the affirmative defense of statute of limitations, he has the burden of conclusively establishing that defense, i.e., when the cause of action accrued and if the discovery rule applies, negating it by demonstrating there is no genuine issue of material fact as to when the plaintiff discovered the injury or in the exercise of reasonable diligence should have discovered it. Id.; KPMG Peat Marwick v. Harrison County Housing Finance Corp., 988 S.W.2d 746, 748 (Tex. 1999). Plaintiffs also challenge as meritless Tilney’s objection that they have failed to plead fraud with particularity against him because they have not alleged any specific misrepresentations made by him. Instead they argue that Tilney has continually asserted his Fifth Amendment rights in refusing to answer questions, to testify before the Securities and Exchange Commission and the Department of Justice, or to participate in discovery. Plaintiffs state that they only allege aider and abettor and conspiracy claims against Tilney. Moreover Plaintiffs maintain that in a civil action a defendant’s refusal to testify is a basis for drawing adverse inferences against him at trial. Baxter v. Palmigiano, 425 U.S. 308, 318, 96 S.Ct. 1551, 47 L.Ed.2d 810 (1976) (the “prevailing rule” is “that the Fifth Amendment does not forbid adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them”). Indeed, his refusal to testify could be the basis for granting a summary judgment against him. U.S. v. Two Parcels of Real Prop. Located in Russell County, 92 F.3d 1123, 1128 (11th Cir.1996). They urge the Court to deny his motion to dismiss under Rule 9(b) because of his assertion of his Fifth Amendment rights. Plaintiffs insist they have allegations in the complaint specifying Merrill Lynch’s misrepresentations, both affirmative and by omission, upon which Plaintiffs relied. Merrill Lynch allegedly failed to disclose the truth while its analysts (agents of Merrill Lynch) issued a steady stream of reports and recommendations containing information from Enron’s financial statements that Merrill Lynch knew to be false. A duty to disclose is not limited to confidential or fiduciary relationships; when a person voluntarily discloses information, he has a duty to disclose the whole truth, to disclose new information when he is aware that it is necessary to prevent the earlier representation from being misleading or untrue, or when he makes a partial disclosure and conveys a false impression. Merrill Lynch had such a duty here under the facts alleged (Merrill Lynch knew the Nigerian Barge Transaction, Power Trades Transaction, and LJM2 were to help Enron “cook its books,” the major impact they had on Enron’s year-end financial reports, Donato Eassey’s use of falsified financial data, the firing of Olson for honestly downgrading Enron stock, indeed its manipulation of the analysts making such reports). In addition to its active manipulation, Merrill Lynch allegedly knew that its agents/analysts were issuing affirmative misrepresentations in its name, based on false financial data that it helped to create, but remained silent. Quaak, 445 F.Supp.2d at 141 (where the analyst was “kept in the dark” about the fraudulent data the defendant helped to create, the defendant should not be shielded from liability). Plaintiffs maintain that they have adequately alleged Merrill Lynch’s knowledge of Enron’s true financial condition and fraudulent financial statements and Merrill Lynch’s participation in making the financial statements false. Plaintiffs also insist that they have adequately pled against Tilney causes of action for conspiracy to commit fraud and for a secondary violation of § 27.01(d) of the Texas Business & Commerce Code and of section 33 F of the TSA, based upon Enron’s misrepresentations to Plaintiffs in Enron’s financial statements and affirmative misrepresentations and omissions relied upon by Plaintiffs. First Amended Complaint, # 46 at 9 ¶ 37, at 105 ¶ 460, at 14-19 ¶¶ 57-76. They also claim they have adequately pled facts from which a person could at least infer a conspiracy with Enron and violation of § 27.01(d), noting allegations that Tilney pushed for Merrill Lynch’s approval of the Nigerian Barge transaction, knew about the verbal assurances from Andrew Fastow that resulted in the fraudulent accounting for the transaction, and urged Merrill Lynch to participate in the Power Trades Transaction. Id. at ¶¶ 319, 336, 378, 339, 347-56, 389. 2. Joint Claims in Motions to Dismiss Plaintiffs argue that where fraud claims are based upon a civil conspiracy, each co-conspirator is liable for acts in furtherance of the conspiracy committed by any of the conspirators. Akin v. Dahl, 661 S.W.2d 917, 921-22 (Tex.1983). Thus they conclude the allegations of wrongful misrepresentations are sufficient. Similarly, Section 27.01(d) provides that a person commits the same fraud as the person making the misrepresentation when the person has actual awareness of the falsity of the misrepresentation made by the other person, fails to disclose that falsity to the defrauded person, and benefits from that misrepresentation. Section 27.01(d) also provides, “Actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness.” Plaintiffs assert that Defendants had actual awareness of the falsity of Enron’s representations in its financial statements filed with the SEC. Plaintiffs have made allegations and quoted from sworn statements of Enron officers (Richard Causey, Andrew Fastow, Ben Glisan, Mark Koenig, Kevin P. Hannon, Timothy Despain, and Michael Kopper) who stated that Enron’s financial results were manipulated and the SEC financial statements were false and misleading. For instance, Richard Causey, Enron’s Chief Accounting Officer from 1998 until Enron filed fo