Full opinion text
OPINION AND ORDER KRAM, District Judge. TABLE OF CONTENTS I. INTRODUCTION.........................................................459 II. BACKGROUND...........................................................460 A. The Parties...........................................................460 B. The Factual Allegations................................................461 C. The Legal Claims......................................................465 III. LEGAL STANDARDS FOR DISMISSAL..........;..........'...............466 A. Motion to Dismiss Pursuant to Rule 12(b)(6) ..............'................466 B. Pleading under Federal Rules of Civil Procedure 8 and 9(b), and the PSLRA...................................... 466 IV. DISCUSSION.............................................................467 A. Section 10(b) and Rule 10b-5 Claims.....................................467 1. Liability for Misstatements and Omissions ............................467 i. The Alleged Misrepresentations.................................468 a. Materiality.................................................468 b. The Duty to Disclose.......................................469 (1) MMC’s Reported Earnings..............................469 (2) MMC’s Risk Disclosures................................471 (3) MMC’s Contingent Loss Reserves........................471 (4) The Magnitude of Contingent Commissions and Their Materiality to MMC’s Earnings........................472 (5) Statements Pertaining to MMC’s Business Practices........473 (6) Fraudulent Accounting..................................477 e. Misstatements Attributable to Defendants....................478 ii. Scienter......................................................480 a. MMC and Marsh................................ 481 b. The Individual Defendants........................,..........483 (1) The Senior Management Defendants......................484 (2) The Audit Committee Defendants........................487 c. D&T....................................................488 iii. Reliance......................................................489 iv. Loss Causation................................................490 2. Market Manipulation...............................................490 B. Section 11 Claims............................................’...........491 C. Section 18 Claims......................................................493 D. Control Person Claims: Section 15 and Section 20(a).......................493 E. State Law Claims............................................. 494 1. Common Law Fraud and Deceit.....................................495 2. Negligent Misrepresentation........................................495 3. State Securities Laws ..............................................496 V.CONCLUSION..............................-...............................496 I. INTRODUCTION On October 14, 2004, New York State Attorney General Eliot Spitzer (the “NYAG”) filed a civil complaint in New York State Supreme Court against Marsh & Mclennan Companies, Inc. (“MMC” or the “Company”) alleging that the Company “steered unsuspecting clients to insurers with whom it had lucrative payoff agreements, and that the firm solicited rigged bids for insurance contracts.” Press Release, Office of New York State Attorney General Eliot Spitzer, Investigation Reveals Widespread Corruption in Insurance Industry (Oct. 14, 2004), available at http://www.oag.state.ny.us/press/2004/ oct/oct14a_04.html. The following day, the first of approximately a dozen class action securities complaints was filed in federal court. Each complaint alleges that MMC, its subsidiary, Marsh Inc. (“Marsh”), its auditor, Deloitte & Touch LLP (“D & T”), and nearly two dozen directors and officers of MMC and Marsh are liable for numerous violations of the federal securities laws and assorted state laws. Upon plaintiffs’ motions, the Court consolidated these complaints and appointed The Public Employees’ Retirement System of Ohio, State Teachers’ Retirement System of Ohio, Ohio Bureau of Workers’ Compensation, and the State of New Jersey, Department of Treasury, Division of Investment as co-lead plaintiffs (“Plaintiffs”). Plaintiffs filed the Consolidated Class Action Amended Complaint shortly thereafter (the “Complaint”). In eight separate filings, the defendants now move to dismiss the Complaint in its entirety for failure to state a claim upon which relief can be granted, pursuant to Federal Rule of Civil Procedure 12(b)(6), and failure to plead fraud with particularity, pursuant to Federal Rule of Civil Procedure 9(b) and the Private Securities Litigation Reform Act of 1995 (“PSLRA”). For the reasons stated below, the motion is granted in part and denied in part. II. BACKGROUND A. The Parties This lawsuit has been brought as a class action on behalf of all persons that, between and including October 14, 1999 and October 13, 2004 (the “Class Period”), purchased or otherwise acquired securities issued by MMC (the “Class”). The co-lead plaintiffs are large, institutional investors with billions of dollars in assets and tens of millions of dollars of estimated losses. Plaintiffs allege that the members of the Class collectively lost “nearly $12 billion in market capitalization.” (Compl. ¶ 27.) In addition, Plaintiffs bring claims under state law on behalf of a subclass of state and municipal pension plans that purchased MMC securities during the Class Period (the “Pension Fund Subclass”). Plaintiffs name both corporate and individual defendants. MMC and Marsh are the primary corporate defendants. MMC is a public company providing professional services in the fields of risk and insurance, investment management, and consulting and human resources. Marsh, MMC’s principal subsidiary, provides risk and insurance services to clients. The Marsh subsidiary is wholly owned by MMC, generating approximately 60% of the parent corporation’s revenues. (Compl. ¶ 118.) Plaintiffs also name MMC’s independent auditing firm, D & T, which audited MMC’s financial statements throughout the Class Period. Plaintiffs name twenty individual defendants, most of them former or current directors and officers of MMC and Marsh: Jeffrey Greenberg, former Chief Executive Officer (“CEO”) and Chairman of MMC (“Greenberg”); Mathis Cabiallavetta, former Vice Chairman of MMC (“Cabiallavet-ta”); Roger E. Egan, former President and Chief Operating Officer of Marsh (“Egan”); Lewis W. Bernard, a director of MMC (“Bernard”); Peter Coster, former President of Mercer and a former director of MMC (“Coster”); Robert Erburu, a director of MMC (“Erburu”); Lawrence Lasser, former President and CEO of Putnam and a former director of MMC (“Las-ser”); Oscar Fanjul, a director of MMC (“Fanjul”); Ray J. Groves, former Chairman and CEO of Marsh and a director of MMC (“Groves”); Stephen R. Hardis, a director of MMC (“Hardis”); Gwendolyn S. King, a director of MMC (“King”); Right Honorable Lord Ian Bruce Lang of Monkton, a director of MMC (“Lang”); David A. Olsen, a director of MMC (“Olsen”); Robert J. Rapport, MMC’s Vice President, Chief Accounting Officer, and Controller during the Class Period (“Rapport”); Morton O. Schapiro, a director of MMC (“Schapiro”); Adele Simmons, a director of MMC (“Simmons”); John T. Sin-nott, former Chairman and CEO of Marsh and a former director of MMC (“Sinnott”); A.J.C. Smith, a former director of MMC, and the pre-Class Period Chairman and CEO of MMC (“Smith”); Sandra S. Wijn-berg, a senior Vice President and Chief Financial Officer of MMC (“Wijnberg”); and Michael Bischoff, a senior Vice President and head of Investor Relations during the Class Period (“Bischoff’). For pleading purposes, Plaintiffs commonly refer to the individual defendants by reference to various group aliases. The following groups are referenced in the Complaint: (1) Defendants Greenberg, Ca-biallavetta, Groves, Smith, Sinnott, Egan, Wijnberg, and Rapport (the “Senior Management Defendants”); (2) Defendants Fanjul, Hardis, King, Lang, Olsen, Schapi-ro, and Simmons (the “Audit Committee Defendants”); and (3) Defendants Green-berg, Wijnberg, Rapport, Cabiallavetta, Fanjul, Groves, Hardis, King, Lang, Olsen, Simmons, Sinnott, Smith, and Schapiro (the “Individual Section 11 Defendants”). The corporate and individual defendants will be referred to collectively as “Defendants.” B. The Factual Allegations Plaintiffs’ principal material allegations are summarized below. This summary takes as true Plaintiffs’ allegations and factual assertions, but in no way constitutes factual findings by the Court. The global insurance marketplace consists of four primary entities: (1) insurance companies that provide insurance; (2) clients in need of various types of liability and casualty insurance; (3) risk managers who evaluate clients’ loss exposure and advise them on the type of insurance needed; and (4) brokers that match clients with insurance providers on the basis of the clients’ needs and the nuances of the insurance marketplace. MMC is the world’s largest insurance broker, providing risk and insurance brokerage services to a predominately corporate clientele worldwide. (Compl. ¶¶ 112-18.) Throughout the Class Period, MMC marketed itself as a client-focused brokerage, emphasizing its establishment of a “level playing field” for insurance providers, “completeness” in its disclosure of bids to clients, and commitment to “bidding integrity” between insurers. (Compl. ¶ 122.) Clients pay brokers a commission for locating the best insurer for their needs. (Compl. ¶ 117.) In addition, many brokers, including MMC, receive additional, “contingent commissions” directly from insurance companies, pursuant to “placement service agreements” (“PSAs”) and “market service agreements” (“MSAs”). These contingent commissions are typically based on an insurance company’s book of business with the broker, renewal rates, and the profitability of the business placed by the broker. Because brokers have a fiduciary duty to serve their client’s best interests, contingent commission agreements collected from insurance providers present them with a direct conflict of interest. Accordingly, state insurance agencies, such as the New York State Insurance Department (“NYSID”), have established guidelines to regulate brokers’ disclosure of the contingent commissions they receive from insurance companies. Though contingent commission agreements have always existed within the insurance industry, MMC pioneered the manipulation of such agreements to drive increasingly higher revenues. (Compl. ¶¶ 123-30.) MMC’s manipulation of contingent commission agreements was exemplified by the formation of Marsh’s “Global Broking” division, which was formed in order to control business placement and maximize the Company’s receipt of contingent commissions. By centralizing the negotiation of contingent commission agreements in one department, MMC enhanced its ability to steer business to those insurance providers that paid the Company the highest contingent commissions and used the Company’s size as leverage to force insurance companies to pay greater contingent commissions in exchange for MMC’s placement of business. MMC management mandated that all negotiation of contingent commission agreements be routed through Global Broking. (Compl. ¶¶ 13H0.) A central part of MMC’s business plan throughout the Class Period was to raise the Company’s revenues by promoting the interests of the insurance providers with which it had contingent commission agreements. By steering business to the insurance providers offering the most lucrative contingent commissions, MMC collected higher fees. For example, one PSA between MMC and insurance provider American Insurance Group, Corp. (“AIG”) provided MMC with a bonus of 1% of all renewal premiums if clients renewed with AIG at rate of 85% of higher. MMC would receive greater percentage bonuses based on higher renewal rates, e.g., a 2% bonus for a 90% rate or a 3% bonus for a 95% rate. Global Broking and Company executives emphasized the importance of PSAs and MSAs to employees and directed brokers to steer clients to insurers paying the highest contingent commissions. (Compl. ¶¶ 141-56.) MMC employed a variety of techniques to steer clients to specific insurance providers. For instance, MMC began rating insurance companies based on how advantageous their contingent commission agreements were to the Company, rather than on the quality of the insurer’s services or the price competitiveness of its policies. These ratings were compiled into tiering reports, which were then used by Global Broking executives to ensure that Marsh focused its broking business on the insurance companies with which it had the most favorable contingent commission agreements. (Compl. ¶¶ 157-61.) In addition to rating carriers based on how lucrative the contingent commission contracts were for MMC, the Company also instituted a “pay-to-play” system through which Marsh would refuse to place business with a provider unless it entered a contingent commission agreement. (Compl. ¶¶ 162-69.) Internally, Marsh encouraged its employees to place contracts with friendly insurance carriers by praising and promoting employees who placed business with those providers that had entered into the most favorable contingent commission agreements with MMC. (Compl. ¶¶ 170-78.) MMC even engineered a system of bid-rigging, steering business to preferred insurers in order to maximize the Company’s contingent commission revenues. In one example of bid manipulation, Marsh created three types of quotes, known as “A,” “B,” and “C” quotes. When an insurance provider’s existing coverage of a MMC client was up for renewal, Marsh .would solicit an “A” quote from that provider, informing the provider of the target premium and policy terms for the quote. If the incumbent provider agreed to bid the “A” quote, it would keep the business, regardless of whether it was capable of providing more favorable terms. Marsh would then create the appearance of a competitive bidding process by soliciting higher, “B” or “C” quotes from competing insurance providers. By agreeing to provide less favorable quotes to Marsh, the other providers would receive assurances that they would be protected by the Company when they were the incumbent provider. (Compl. ¶¶ 179-215, 226-31.) MMC’s disclosure of its contingent commission agreements was subject to regulation by the NYSID. Under a NYSID regulatory order promulgated in 1998, known as Circular Letter 22, brokers were required to disclose to their clients the existence and amount of contingent commissions and the reasons for such payments. (Compl. ¶¶ 126, 232.) MMC’s disclosure to clients, however, was often misleading. (Compl. ¶ 244.) The reticence with which MMC revealed the nature of its contingent commissions was compounded by its insufficient disclosure of the importance of contingent commissions to MMC’s revenues. Under an agreement entered into with the Risk and Insurance Management Society (“RIMS”), MMC was required to provide its clients with a calculation (called an “average contingency factor” or “ACF”) that reflected the amount that MMC received from contingent commissions, in comparison to all premiums placed by MMC in a given year. (Compl. ¶¶ 126, 242-43.) Under the agreement, however, MMC often provided its clients with “technically accurate, but potentially misleading” responses to relevant inquiries. (Compl. ¶ 244.) MMC’s financial statements during the Class Period reveal that the, ■ nature of contingent commissions was insufficiently disclosed to investors as well, touting the provision of services for contingent commissions, rather than revealing that contingent commissions were in fact kick-backs for improper steering agreements. The following explanation - of contingent commissions in MMC’s 2003 Annual Report is illustrative: Market services revenue is derived from agreements Marsh has with most of its principal insurance markets. Under these agreements, Marsh is paid for services provided to the market, including: access to a global distribution network that fosters revenue generation and operating efficiencies; intellectual capital in the form of new products, solutions and general information on emerging developments in the insurance marketplace; the development and provision of technology systems and services that create efficiencies in doing business; and a wide range of administrative services. Payments under markét service agreements are based upon such factors as the overall volume, growth, and in limited cases profitability, of the total business placed by Marsh with a given insurer. (Compl. ¶ 575.) Similar descriptions of contingent commissions are contained in MMC’s SEC filings throughout the class period. (Compl. ¶¶ 232-41.) MMC’s improprieties during the Class Period were not limited to Marsh’s insurance business, but were widespread throughout the Company. Mercer, MMC’s consulting and human resources subsidiary, entered into secretive arrangements with employee benefit vendors and insurers which provided it with incentives to steer its .clients to the vendors and insurers that gave it the most lucrative kickbacks. (Compl. ¶¶ 251, 254-63.) Putnam, MMC’s mutual fund business, engaged in illicit market-timing and late-trading activities for the benefit of favored investors at the expense of the rest of its clients. As a result of these activities, Putnam paid $111 million to settle regulatory actions against it. (Compl. ¶¶ 252, 275-76.) Additionally, Trident, an investment partnership between MMC and its senior officers and directors, is currently under investigation by the SEC with respect to the propriety of potentially conflict-ridden related-party transactions. (Compl. ¶¶ 253, 277-83.) On October 14, 2004, the NYAG filed a civil complaint against MMC and Marsh, alleging that the Company was engaged in improper steering and bid-rigging activities. Additionally, the NYAG announced that two of AIG’s employees had pleaded guilty to criminal charges in connection with their dealings with MMC. MMC immediately issued a press release announcing that it took the NYAG’s allegations seriously and had been cooperating with the NYAG investigation since it began in the spring. Nevertheless, the share price of MMC common stock dropped from $46.13 to $34.85 that same day. (Compl. ¶¶ 284-88.) The following day, MMC announced its suspension of MSAs and the resignation of Marsh’s CEO, Defendant Groves. The share price of MMC common stock further dropped from its October 14 close to $29.20. (Compl. ¶¶ 289-93.) On October 18, 2004, MMC issued a press release regarding the effect of MSAs on MMC revenue, indicating that MMC collected $845 million in MSA revenue in 2003, representing 12% of MMC’s $6.9 billion risk and insurance services revenue and 7% of the Company’s $11.6 billion total revenue. (Compl. ¶ 294.) In the following months, the Company announced the resignation of Defendants Greenberg and Egan, ethical reforms pertaining to its insurance brokerage transactions, the restructuring of the MMC Board of Directors, and the creation of an $850 million restitution fund to settle the NYAG’s civil complaint. (Compl. ¶¶ 301-14.) Also during this time, various MMC employees faced criminal liability in New York, and the Company was subjected to additional regulatory action outside that state. (Compl. ¶¶ 316-18.) Over the course of approximately one-hundred pages and three-hundred paragraphs of the Complaint, Plaintiffs allege that Defendants made public statements misstating MMC’s financial results, omitting material facts, and misrepresenting the Company’s business practices. (Compl. ¶¶ 323-646.) The alleged misstatements and omissions fall into seven general categories: (1) MMC misstated its earnings by failing to disclose that contingent commission revenues were derived from improper steering and bid manipulation; (2) MMC misstated its earnings by failing to reserve for contingent losses from its steering and bid manipulation; (3) MMC failed to disclose the magnitude of contingent commissions and their materiality to the Company’s revenue; (4) MMC failed to disclose the risks that contingent commissions might be discontinued or that MMC would face litigation or regulatory action; (5) MMC misrepresented the true nature of the services provided in exchange for contingent commissions; (6) MMC made material misrepresentations regarding its commitment to clients and adherence to ethical practices; and (7) MMC falsely represented that Marsh’s clients were fully apprised of contingent commissions. In addition, Plaintiffs allege that MMC engaged in fraudulent accounting by failing to comply with GAAP and SEC regulations, thus MMC is liable for issuing, and D & T is liable for certifying, MMC’s misleading financial statements. (Compl. ¶¶ 647-746.) Without exception, Plaintiffs’ allegations of securities fraud derive from the steering and bid manipulation scheme. C. The Legal Claims Count I alleges that Defendants MMC, Marsh, D & T, Greenberg, Cabiallavetta, Egan, Fanjul, Groves, Hardis, King, Lang, Olsen, Rapport, Schapiro, Simmons, Sin-nott, Smith, and Wijnberg made materially misleading statements and omissions throughout the class period and engaged in a scheme to manipulate the market for MMC securities in violation of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 promulgated thereunder. Count II alleges that Defendants MMC, Marsh, Greenberg, Cabiallavetta, Egan, Fanjul, Groves, Hardis, King, Lang, Olsen, Rapport, Schapiro, Simmons, Sinnott, Smith, and Wijnberg controlled primary violators of the securities laws in violation of Section 20(a) of the Exchange Act. Count III alleges that Defendants MMC, D & T, Greenberg, Cabiallavetta, Fanjul, Groves, Hardis, King, Lang, Olsen, Rapport, Schapiro, Simmons, Sinnott, Smith, Wijnberg, Bernard, Coster, Erbu-ru, and Lasser are liable for materially untrue statements and omissions contained in MMC’s - Fébruary 13, 2003 prospectus supplement, filed in connection with its 4.850% bond offering under an earlier registration statement, in violation of Section 11 of the Securities Act of 1933 (“Securities Act”). Count IV alleges that Defendants Greenberg, Cabiallavetta, Fanjul, Groves, Hardis, King, Lang, Olsen, Schapiro, Simmons, Sinnott, Smith, Bernard, Coster, Er-buru, and Lasser controlled primary violators of Section 11 of the Securities Act, in violation of Section 15 of the Securities Act. Count V alleges that Defendants MMC, D & T, Greenberg, Cabiallavetta, Fanjul, Groves, Hardis, King, Lang, Olsen, Rapport, Schapiro, Simmons, Sinnott, Smith, Wijnberg, Bernard, Coster, Erburu, and Lasser are liable for materially false or misleading statements or omissions contained in MMC’s Exchange Act filings, in violation of Section 18 of the Exchange Act. Count VI alleges that Defendants MMC, D & T, Greenberg, Cabiallavetta, Egan, Fanjul, Groves, Hardis, King, Lang, Olsen, Rapport, Schapiro,- Simmons, Sinnott, Smith, and Wijnberg are liable to the Pension Fund Subclass for common law fraud and deceit. Count VII alleges that Defendants MMC, Greenberg, Cabiallavetta, Egan, Fanjul, Groves, Hardis, King, Lang, Olsen, Rapport, Schapiro, Simmons, Sinnott, Smith, Wijnberg, Bernard, Coster, Erbu-ru, and Lasser are liable to the Pension Fund Subclass for negligent misrepresentation. Count VIII alleges that Defendants MMC, D & T, Greenberg, Cabiallavetta, Egan, Fanjul, Groves, Hardis, King, Lang, Olsen, Rapport, Schapiro, Simmons, Sin-nott, Smith, Wijnberg, Bernard, Coster, Erburu, and Lasser are liable to the Pension Fund Subclass for violations of state securities laws. Defendants have filed eight separate motions to dismiss the Complaint for failure to state a claim upon which relief can be granted and failure to plead with particularity. The moving papers of the Defendants will be referred to by the following aliases: (1) Defendants MMC, Marsh, Cabiallavetta, Coster, Rapport, Smith, Wijnberg, and Bischoff (“Corporate”); (2) Defendant Greenberg (“Greenberg”); (3) Defendant Egan (“Egan”); (4) Defendants Bernard, Erburu, Fanjul, Hardis, King, Lang, Olsen, Schapiro, and Simmons (“Independent Directors”); (5) Defendant Las-ser (“Lasser”); (6) Defendant Groves (“Groves”); (7) Defendant Sinnott (“Sin-nott”); (8) Defendant D & T (“D & T”). III. LEGAL STANDARDS FOR DISMISSAL A. Motion to Dismiss Pursuant to Rule 12(b)(6) Under Federal Rule of Civil Procedure 12(b)(6), “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), cited in Shah v. Meeker, 435 F.3d 244, 246 (2d Cir.2006). The role of the court is “merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.” Levitt v. Bear Stearns & Co., 340 F.3d 94, 101 (2d Cir.2003) (internal citations omitted). Accordingly, courts should not dismiss a claim unless, “after accepting all the allegations in the Complaint as true and drawing all reasonable inferences in [the plaintiffs’] favor, the Complaint fails to allege any set of facts that would entitle [them] to relief.” Caiola v. Citibank, N.A., 295 F.3d 312, 321 (2d Cir.2002). In considering a motion to dismiss, the “court must limit itself to facts stated in the complaint or in documents attached to the complaint as exhibits or incorporated in the complaint by reference.” Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir.1991); see also San Leandro Emergency Medical Group Profit Sharing Plan v. Philip Morris Cos., 75 F.3d 801, 808-09 (2d Cir.1996) (holding that documents “integral” to the complaint are properly considered on a motion to dismiss). In addition, “[o]n a motion to dismiss a securities action, a district court may consider documents required to be publicly filed with the S.E.C. that bear on the adequacy of disclosure.” City of Sterling Heights Police and Fire Ret. Sys. v. Abbey Nat’l, PLC, 423 F.Supp.2d 348, 355 (S.D.N.Y.2006) (citing Kramer, 937 F.2d at 773-74). Accordingly, the Court considers the allegations of the Complaint, documents incorporated therein, and any “publicly filed documents appended to” Defendants’ motions to dismiss. Id. (citation omitted). B. Pleading under Federal Rules of Civil Procedure 8 and 9(b), and the PSLRA While the rules of pleading in federal court generally require only “a short and plain statement” of the plaintiffs claim for relief, Fed. R. Civ. Proc. 8, averments of fraud must be “stated with particularity.” Fed. R. Civ. Proc. 9(b). The PSLRA has expanded on Rule 9(b)’s pleading requirements in the context of securities fraud allegations. “That statute insists that securities fraud complaints ‘specify’ each misleading statement; that they set forth the facts ‘on which [a] belief that a statement is misleading was ‘formed’; and that they ‘state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.’ ” Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 345, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005) (quoting 15 U.S.C. §§ 78u-4(b)(1), (2)). The Second Circuit evaluates a securities complaint’s compliance with Rule 9(b) and the PSLRA by means of a common formulation. “A complaint must: (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.” Stevelman v. Alias Research Inc., 174 F.3d 79, 84 (2d Cir.1999) (internal quotation marks and citations omitted). Failure to plead with the requisite particularity is a ground for dismissal. IV. DISCUSSION A. Section 10(b) and Rule 10b-5 Claims Count I of the Complaint alleges violations of Section 10(b) of the Exchange Act and Rule 10b-5. Section 10(b) prohibits conduct “involving manipulation or deception, manipulation being practices ... that are intended to mislead investors by artificially affecting market activity, and deception being misrepresentation, or nondisclosure intended to deceive.” Ganino v. Citizens Utils. Co., 228 F.3d 154, 161 (2d Cir.2000) (quoting Field v. Trump, 850 F.2d 938, 946-47 (2d Cir.1988)). Rule 10b-5 uses similar language to describe the unlawful behavior proscribed by Section 10(b), making it illegal, (a) To employ any device, scheme, or artifice to defraud, (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (c) To engage in 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 or sale of any security. 17 C.F.R § 240.10b-5. Plaintiffs allege that Defendants deceived investors by making various misstatements and omissions during the Class Period in violation of Rule 10b-5(b), and, in less detail,, that Defendants are liable for their scheme to manipulate the market for MMC securities in violation of Rule 10b-5(a) & (c). 1. Liability for Misstatements and Omissions Plaintiffs claim that Defendants made misstatements and omissions concerning MMC’s allegedly improper collection. of contingent commissions and the nature of the Company’s business practices. A claim for relief under the deception branch of Section 10(b) and Rule 10b-5 may only be sustained where plaintiffs allege that the defendants “(1) made misstatements or omissions of material fact; (2) with scienter; (3) in connection with the purchase or sale of securities; (4) upon which plaintiffs relied; and (5) that plaintiffs’ reliance was the proximate cause of their injury.” Lentell v. Merrill Lynch & Co., 396 F.3d 161, 172 (2d Cir.2005) (quoting In re IBM Sec. Litig., 163 F.3d 102, 106 (2d Cir.1998)). Plaintiffs are required to adequately allege each of these elements — material misrepresentations, scienter, connection, reliance, and loss causation — in order to sustain a claim. Defendants move to dismiss the Rule 10b — 5(b) claims on the grounds that Plaintiffs fail to plead (1) any actionable misrepresentations, (2) facts supporting a strong inference of scienter, (3) reliance, or (4) loss causation. i. The Alleged Misrepresentations The allegations of the Complaint focus predominantly on MMC’s collection of contingent commissions. Plaintiffs do not allege that contingent commissions are per se illegal, nor that contingent commissions constitute fictional revenue, only that MMC maximized contingent commission revenues by engaging in improper behavior (i.e., steering and bid manipulation) and then misled the investing public by making affirmative misstatements and failing to disclose this behavior. Defendants argue that Plaintiffs allege mere corporate mismanagement, which there is no duty to disclose, and that they fail to state any materially misleading statements. a. Materiality “At the pleading stage, a plaintiff satisfies the materiality requirement of Rule 10b-5 by alleging a statement or omission that a reasonable investor would have considered significant in making investment decisions.” Genino, 228 F.3d at 161 (citations omitted). The Second Circuit has “consistently rejected a formulaic approach to assessing the materiality of an alleged misrepresentation,” but has advised that, “when presented with a Rule 12(b)(6) motion, ‘a complaint may not properly be dismissed ... on the ground that the alleged misstatements or omissions are not material unless they are so obviously unimportant to a reasonable investor that reasonable minds could not differ on the question of their importance.’ ” Id. at 162 (quoting Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.1985)). In the context of alleged omissions, “there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the ‘total mix’ of information made available.” Basic Inc. v. Levinson, 485 U.S. 224, 231, 108 S.Ct. 978, 99 L.Ed.2d 194 (1988) (citing TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976)). Plaintiffs argue that Defendants’ failure to disclose the alleged misconduct at Marsh constitutes a material omission. The Complaint alleges that contingent commissions comprised more than 16% of MMC’s risk and insurance revenues, and over 50% of the Company’s total profits, by 2003. (Compl. ¶ 104.) Further, Plaintiffs allege that MMC claimed to be a client-focused company and that it derived the majority of its revenue from its provision of risk and insurance services to its clients. (Compl. ¶¶ 3, 102.) Despite MMC’s representations and the importance of its provision of client services to the Company’s revenues, the steering and bid manipulation at Marsh was widespread. This contention is supported by specific factual allegations of systemic steering within Marsh’s Global Broking division and MMC’s abrupt elimination of all such agreements immediately after the NYAG complaint was filed. (Compl. ¶¶ 226, 26.) Taking the allegations of the Complaint as true, the Court finds that Plaintiffs have sufficiently alleged the materiality of the undisclosed misconduct to MMC’s bottom line. A rational jury could conclude that a reasonable investor would find it significant that MMC was generating substantial earnings from its improper business practices and jeopardizing the client relationships central to its largest business segment by placing insurance business with the insurance providers offering MMC the highest commissions, rather than those providers offering the insurance packages best suited to the clients’ needs. The Complaint sufficiently alleges the nondisclosure of material information. b. The Duty to Disclose Simply alleging the nondisclosure of material information, however, is insufficient to state an actionable misrepresentation absent a duty to disclose. “As the Supreme Court has made elearQ ... the concepts of materiality and duty to disclose are different.” Glazer v. Formica Corp., 964 F.2d 149, 156 (2d Cir.1992) (citations omitted); see also In re Time Warner Inc. Sec. Litig., 9 F.3d 259, 267 (2d Cir.1993). “When an allegation of fraud is based upon nondisclosure, there can be no fraud absent a duty to speak.” Chiarella v. United States, 445 U.S. 222, 235, 100 S.Ct. 1108, 63 L.Ed.2d 348 (1980). This “duty to speak” arises in only limited situations. Of course, specific statutes and regulations create affirmative duties to disclose information, but another duty arises more generally. “When a corporation does make a disclosure — whether it be voluntary or required — there is a duty to make it complete and accurate.” Roeder v. Alpha Indus., Inc., 814 F.2d 22, 26 (1st Cir.1987), cited in Glazer, 964 F.2d at 157. In other words, corporations have á duty to disclose all facts necessary to ensure the completeness and accuracy of their public statements. Thus, with respect to allegations of corporate mismanagement, disclosure is required where “a failure to disclose facts that amount to mismanagement may render other statements misleading.” In re NTL Inc. Sec. Litig., 347 F.Supp.2d 15, 27 (S.D.N.Y.2004); see also In re JP Morgan Chase Sec. Litig., 363 F.Supp.2d 595, 617 (S.D.N.Y.2005); In re Atlas Air Worldwide Holdings, Inc. Sec. Litig., 324 F.Supp.2d 474, 494 n. 11 (S.D.N.Y.2004). The same proposition holds true for allegations of uncharged criminal conduct. Though courts have held that the securities laws do not impose a duty to disclose uncharged criminal conduct, see United States v. Matthews, 787 F.2d 38, 49 (2d Cir.1986); In re Citigroup, Inc. Sec. Litig., 330 F.Supp.2d 367, 377 (S.D.N.Y.2004), corporations are obligated to disclose facts necessary to ensure that their statements are not misleading. This duty applies to the disclosure of criminal conduct to the same extent it applies to the disclosure of any other material information. See Menkes v. Stolt-Nielsen S.A., No. 3:03CV409(DJS), 2005 WL 3050970, at *7 (D.Conn. Nov.10, 2005); In re Par Pharm., Inc. Sec. Litig., 733 F.Supp. 668, 675 (S.D.N.Y.1990). In light of these principles, the key considerations of the Court’s inquiry are whether (a) the alleged omissions, even if grounded in corporate mismanagement or criminal conduct, are sufficiently connected to Defendants’ existing disclosures to make those public statements misleading, or (b) the Defendants failed to disclose material information required by specific regulations and statutes. Each of the alleged misrepresentations must be analyzed with these considerations in mind. (1) MMC’s Reported Earnings Because the securities laws do not impose a general duty to disclose corporate mismanagement or uncharged criminal conduct, the allegation that MMC misstated its earnings merely by failing to disclose the misconduct at its Marsh subsidiary is not actionable. Plaintiffs do not allege that MMC failed to fully and accurately report the Company’s income from contingent commissions. There is no allegation that MMC misstated the amount of revenue received from specific transactions or that it reported phantom or untimely profits. Absent an allegation that MMC reported income that it did not actually receive, the allegation that a corporation properly reported income that is alleged to have been, in part, improperly obtained is insufficient to impose Section 10(b) liability. See In re Sofamor Danek Group, Inc., 123 F.3d 394, 401 & n. 3 (6th Cir.1997) (“It is clear that a violation of federal securities laws cannot be premised upon a company’s disclosure of accurate historical data.”); Greenstone v. Carnbex Corp., 777 F.Supp. 88, 91 (D.Mass.1991) (dismissing securities claim because the plaintiff did “not allege that the revenues actually received by Carnbex differed from those reported to the SEC,” but argued “instead that the reports would have been more accurate and complete if the defendants had revealed their improper activities because such activities allegedly influenced the financial success of Carnbex”), aff'd 975 F.2d 22 (1st Cir.1992). A court in this District recently considered the motion to dismiss of a company that was sued after investors learned that a significant portion of its revenues were derived from illegal practices. See In re Van der Moolen Holding N.V. Sec. Litig., 405 F.Supp.2d 388, 392 (S.D.N.Y.2005). The court held that statements which “put the sources of [the defendant’s] revenue at issue” were sufficient to give rise to Section 10(b) liability because the company failed to disclose the role of improper conduct in generating that revenue. Id. at 401. This proposition is reasonable, as statements falsely attributing the company’s success to factors other than the improper conduct may be regarded as misleading by virtue of what is not disclosed. However, In re Van der Moolen may be interpreted to hold that the statements which put the sources of revenue at issue triggered a general duty to disclose, thereby rendering all of the company’s statements of its revenue figures misleading. Id. at 413-27 (including revenue figures and financial statements in an appendix of alleged false and misleading statements). According to this theory of liability, a single misstatement regarding a company’s revenues could conceivably create liability for the company’s revenue disclosures throughout the Class Period. This Court is of the opinion that a company’s misleading statements about the sources of its revenue do not make the company’s statements of the revenue figures misleading; rather, liability is limited to the misleading statements themselves. If actual revenues derived from improper conduct were a sufficient basis of Section 10(b) liability, then the statement of those revenues should be actionable without requiring that plaintiffs point to a statement putting the source of those revenues at issue. As noted above, however, the isolated statement of actual revenues allegedly generated by improper activities does not create Section 10(b) liability. See In re Sofamor Danek Group, 123 F.3d at 401. Holding that accurate revenue figures are misstated by virtue of a company’s misleading statements about the business practices generating that revenue, while withholding liability for revenue figures unaccompanied by misleading statements would lead to inequitable results. Imagine that Company A and Company B each engage in improper business practices, but properly report their revenue from those activities. Company A, which states its revenue without issuing misleading companion statements that put the sources of the revenue at issue, would be sheltered from liability. Meanwhile Company B, which issues misleading statements regarding its revenue, would be liable not only for those misleading statements, but for the misstatement of its revenue figures as well. The only difference between the actions of these companies is the existence of misleading statements putting the sources of their revenues at issue. Therein lies the deception; thus, liability properly attaches solely to the misleading statements. See In re Par Pharm., 733 F.Supp. at 678 (limiting liability to statements in which the subject matter of the statement is sufficiently connected to the undisclosed misconduct); Menkes, 2005 WL 3050970, at *7-8 (same). Consequently, Plaintiffs’ allegation that MMC misstated its earnings, by failing to disclose the existence of steering and bid manipulation is insufficient to state a claim under Section 10(b). (2) MMC’s Risk Disclosures Plaintiffs also allege that MMC failed to disclose the risk that contingent commissions might be discontinued or that the Company would be subject to litigation, regulatory action, or other penalties. Nearly identical allegations were held insufficient to state a claim in In re Citigroup. The reasoning of that case applies equally here. With respect to a company’s failure to disclose impending litigation, there is no requirement “to make disclosures predicting such litigation,” absent an allegation that the litigation “was substantially certain to occur during the relevant period.” In re Citigroup, 330 F.Supp.2d at 377; see also In re Par Pharm., 733 F.Supp. at 678; Ballan v. Wilfred American Educ. Corp., 720 F.Supp. 241, 248 (E.D.N.Y.1989). Plaintiffs do not adequately allege that MMC was likely to be subjected to litigation—during the Class Period for the misconduct alleged in the Complaint. Furthermore, once the NYAG investigation began in the spring of 2004, MMC disclosed its existence in the relevant SEC filings and discussed the changing regulatory environment in the media. (Compl. ¶¶ 608, 620, 637.) As for the allegation that Defendants failed to disclose the risk that- contingent commitments might be discontinued, Plaintiffs fail to allege that MMC made any “projections or future predictions in the challenged documents” that it would continue to- collect • contingent commissions. In re Citigroup, 330 F.Supp.2d at 378. Nor did Defendants have “a duty to speculate about the effects of discovery of the [steering] scheme on the company’s future prospects.” Id. (citing In re Par Pharm., 733 F.Supp. at 678); see also In re Par Pharm., 733 F.Supp. at 678 (defendants were “not obligated to speculate as to the myriad of consequences, ranging from minor setbacks to complete ruin, that might have befallen the company if the [unlawful] scheme was discovered, disclosed or terminated”). Defendants can not be held liable for failing- to make similarly speculative disclosures regarding the possibility that its contingent commission revenues may some day be discontinued. Plaintiffs essentially allege that Defendants had a duty to disclose the existence of improper business practices prior to any indication that those practices were under scrutiny. Such a general duty to disclose corporate mismanagement or uncharged criminal conduct has been rejected. Furthermore, to the extent that Defendants were aware of the .shifting regulatory landscape and the potential effects on the collection of contingent commissions, Defendants’ public disclosures were adequate. (3) MMC’s Contingent Loss Reserves In an attempt to tie Marsh’s undisclosed misconduct to a specific regulatory disclosure requirement, Plaintiffs allege that MMC misstated its earnings during the Class Period by failing to reserve for contingent losses stemming from Marsh’s improper steering and bid manipulation. (See, e.g., Compl. ¶¶ 324-25, 331-32, 333-34.) The duty to reserve for contingent losses arises under the Financial Accounting Standards Board’s Statement No. 5 (“FASB No. 5”): An estimated loss from a loss contingency ... shall be accrued by a charge to income if both of the following conditions are met: a. Information available prior to issuance of the financial statements indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements. It is implicit in this condition that it must be probable that one or more future events will occur confirming the fact of the loss. b. The amount of the loss can be reasonably estimated. Id. ¶ 8. Plaintiffs fail to properly allege that MMC violated either the accrual or reporting duty imposed by FASB No. 5. MMC eventually incurred a loss in the form of an $850 million restitution fund established pursuant to the settlement of the NYAG lawsuit, which was filed after the close of the Class Period and settled after the Company installed a new management structure. The investigation leading to the lawsuit did not begin until spring 2004, and the existence of the investigation was disclosed in all of MMC’s SEC filings subsequent to its commencement. (Compl. ¶¶ 608, 637.) Considering the longstanding industry practice of collecting contingent commissions, the lack of regulatory scrutiny during the Class Period, and the turnover in management prior to the settlement, the Complaint does not adequately allege that MMC should have reported a probability of litigation losses with respect to their collection of contingent commissions. See FASB No. 5, ¶ 36 (instructing corporations analyzing the application of FASB No. 5 to consider various factors such as “the progress of the case,” “the experience of the enterprise in similar cases, the experience of other enterprises, and any decision of the enterprise’s management as to how the enterprise intends to respond to the lawsuit”). Even if MMC had a duty to disclose the existence of an unasserted claim, the Company’s quarterly disclosures of the NYAG investigation were adequate. (Compl. ¶¶ 608, 637.) Furthermore, the allegations of the Complaint aré insufficient to explain how MMC could have reasonably estimated and accrued the loss amount at the time the financial statements were issued or at any time prior to settlement negotiations. See In re K-tel Int’l, Inc. Sec. Litig., 300 F.3d 881, 893 (8th Cir.2002) (dismissing complaint under FASB No. 5 because the plaintiffs failed “to provide any basis for the allegations or sources for the amounts, other than later financial disclosure made by [the defendant]”) (emphasis added). Accordingly, the allegations of the Complaint are insufficient to state a Section 10(b) claim that MMC breached its duty to reserve for contingent losses. (4) The Magnitude of Contingent Commissions and Their Materiality to MMC’s Earnings Plaintiffs cite a number of general regulatory provisions to support their argument that MMC had a duty to distinguish its contingent commission revenue from the rest of its risk and insurance services revenue because of its magnitude and materiality to MMC’s earnings. Yet Plaintiffs fail to identify any specific accounting standard or other authority requiring that a corporation’s financial statements separately report a particular type of its subsidiary’s revenue. Without exception, the rules invoked by plaintiffs are either beyond the scope of the misconduct alleged in the Complaint or insufficient to establish liability under Section 10(b). Contingent commissions were a consistent source of income prior to and throughout the Class Period. They did not constitute an “unusual or infrequent” revenue source, nor are there sufficient allegations that MMC should have expected that revenue source to change in some way that would require its disclosure under Regulation S-K, Item 303. Nevertheless, even if the Complaint’s allegations were sufficient to establish a violation of that regulation, the violation alone would be insufficient to establish Defendants’ liability under Section 10(b) and Rule 10b-5. See Oran v. Stafford, 226 F.3d 275, 288 (3d Cir.2000) (holding that “a violation of SK-303’s reporting requirements does not automatically give rise to a material omission under Rule 10b-5” because the materiality standards of the regulation and the rule differ substantially). Similarly, the revenue recognition requirements of SEC Staff Accounting Bulletin No. 101 do not demand that MMC separately identify contingent commission revenue apart from the rest of its risk and insurance services revenue. See SEC Staff Accounting Bulletin No. 101, 64 Fed. Reg. 68936 (1999). Nor do Plaintiffs allege that MMC failed to recognize its contingent commission revenue. The Plaintiffs fail to explain how an SEC Bulletin concerned with the timing of revenue recognition in financial statements implicates MMC’s duty to account for its risk and insurance services revenue any differently than it did throughout the Class Period. Plaintiffs also rely on SEC Staff Accounting Bulletin No. 99 (“SAB No. 99”) for the proposition that MMC had a duty to disclose the materiality of contingent commissions to MMC’s earnings. This reliance is misplaced. SAB No. 99 advises that quantity is not dispositive when determining whether a misstatement or omission of an item in a financial statement is material. See SEC Staff Accounting Bulletin No. 99, 64 Fed.Reg. 45150 (1999). As discussed above, however, MMC’s failure to disclose the existence of the alleged misconduct did not amount to a misstatement of its earnings, and, regardless of how contingent commission revenue might have been obtained, Plaintiffs do not allege that MMC omitted such revenue from its financial reports. Nor do Plaintiffs present authority establishing that SAB No. 99 creates a line-item disclosure requirement. Plaintiffs may not avoid their obligation to allege an actionable misstatement simply by arguing that a misstatement follow's from materiality. Absent some indication that a directly relevant regulatory disclosure requirement was violated and specific allegations of how the requirement was violated, Plaintiffs can not state a claim under Section 10(b) for MMC’s alleged failure to disclose the magnitude of contingent commissions and their materiality to earnings. See Iron Workers Local 16 Pension Fund v. Hilb Rogal & Hobbs Co., 432 F.Supp.2d 571, 585 (E.D.Va.2006) (dismissing a similar claim because plaintiffs “failed to establish that Defendants had a duty to disclose non-standard commissions on a line item basis”). (5) Statements Pertaining to MMC’s Business Practices Although the allegations regarding MMC’s earnings figures, risk disclosures, and regulatory violations fail to plead actionable omissions, certain statements regarding MMC’s business practices are adequately connected to the nondisclosure of steering and bid manipulation to state a claim under Section 10(b). Plaintiffs allege several distinct categories of statements pertinent to MMC’s business practices: (1) disclosures regarding the nature of the services provided in exchange for contingent commissions; (2) disclosures about MMC’s commitment to clients and adherence to ethical practices; and (3) disclosures that Marsh’s clients were fully apprised of contingent commissions. Certain statements within these categories are materially misleading by virtue of the undisclosed steering and bid manipulation employed by Marsh to maximize the Company’s contingent commissions. MMC’s 2003 10-K describes the source of contingent commission revenues as follows: Under these agreements, Marsh is paid for services provided to the markets, including: access to a global distribution network that fosters revenue generation and operating efficiencies; intellectual capital in the form of new products, solutions and general information on emerging developments in the insurance marketplace; the development and provision of technology systems and services that create efficiencies in doing business; and a wide range of administrative services. Payments under market service agreements are based upon such factors as the overall volume, growth, and in limited cases profitability, of the total business placed by Marsh with a given insurer. (Compl. ¶ 575.) The truthfulness of this and similar statements describing the services provided for contingent commissions is brought into question by Plaintiffs’ allegations that MMC actually received contingent commissions as kickbacks for steering business to the companies with which it had contingent commission agreements. (Compl. ¶¶ 232-41.) These statements put the source of contingent commission revenues at issue without disclosing information necessary to explain the true nature of the business practices employed to enhance those revenues. Defendants argue that these allegations are not pleaded with sufficient particularity. • Yet Plaintiffs state precisely which entities made the statements and the context of those statements: MMC made the misleading statements in the Company’s Annual Reports and its 10-K filings from 2000 to 2003. Plaintiffs also explain why these statements were misleading: because MMC collected the commissions in return for steering business to insurance providers, rather than for the general market services that they purported to provide. This level of specificity is sufficient to allege an actionable misrepresentation. MMC also argues that it “performed services that benefited both insurers and insureds,” thus the statements regarding the services provided for contingent commissions are not false. (Corporate Reply Br. 19.) However, taking as true Plaintiffs’ allegations that contingent commissions were collected in exchange for the provision of steering and bid manipulation, Plaintiffs have properly alleged that MMC’s disclosures concealed the true nature of its collection of contingent commissions, thus violated Section 10(b). See In re JP Morgan Chase, 363 F.Supp.2d at 618 (allegation that defendants made “misrepresentations and omissions that concealed the nature of the transactions the bank had conducted .... is precisely the type of deception that Section 10(b) prohibits”). The Court will not dismiss the Complaint merely because MMC contests a factual allegation that, if true, would be actionable. MMC will have the opportunity to rebut Plaintiffs’ contentions at trial or on summary judgment, but factual disputes are not properly decided at this stage of the proceedings. Even if the Court credited Defendants’ assertion that MMC truly did provide general market services in return for contingent commissions, the Complaint sufficiently alleges that contingent commissions and the services for which they were received could not be accurately described without reference to the widespread steering and bid manipulation employed to enhance those revenues. This argument is supported by ample allegations of the elaborate steering schemes utilized at Marsh and their centrality to Marsh’s collection of contingent commissions. (Compl. ¶¶ 141— 225.) In short, this category of misrepresentations is pleaded with sufficient specificity to conclude that MMC’s descriptions of the services provided for contingent commissions materially misled investors about the nature of the Company’s contingent commission revenues. Plaintiffs also allege that MMC misrepresented its commitment to clients and adherence to ethical practices throughout the Class Period. Certain misrepresentations alleged in this category, such as those regarding MMC’s “culture of excellence,” its “independence of thought and objective advice,” and the Company’s “dedication] to client service” and “eom-mit[tment] to building value for shareholders” amount to no more than puffery. (Compl. ¶¶ 543, 347, 417.) Broad, general statements such as these are insufficient to state a claim for securities fraud. See Lasker v. New York State Elec. & Gas Corp., 85 F.3d 55, 59 (2d Cir.1996) (per curiam); In re JP Morgan Chase, 363 F.Supp.2d at 633. Certain related statements, however, are sufficiently connected to the allegations of steering and pleaded with adequate particularity to withstand a motion to dismiss. MMC made a number of statements regarding the^ criteria brokers consider when placing insurance business for the Company’s clients. These representations are directly contradicted by the Complaint’s allegations of steering and bid manipulation. For instance, an April 2001 press release asserted that “[i]n a market where insurance rates are rising and coverage is more difficult to obtain, Marsh provides value to clients by developing the most cost-effective responses to the risks they face.” (Compl. ¶ 409 (emphasis added).) In addition, MMC repeatedly stated that the Company created insurance programs for its clients “that vary according to the risk profiles, requirements and preferences of clients.” (Compl. ¶¶ 452, 462, 489, 506, 573.) Defendants Groves and Egan’s comments in the 2003 Annual Report also speak directly to the reasons for the Company’s successful insurance placement: “We reach across markets to tap into risk capital wherever it exists, seeking the best terms, conditions, and prices. Our brokers’ knowledge of the interests of insurers for different types of risk and their relationships with senior underwriters are an advantage for clients as well as underwriters.” (Compl. ¶ 584 (emphasis added).) Each of these statements refers to the method by which Marsh makes insurance placements, asserting that Marsh tailors insurance packages for its clients according to the clients’ coverage requirements and financial needs. Plaintiffs specifically allege that these statements were made materially misleading by MMC’s failure to disclose that it directed clients to insurers to maximize the Company’s revenues under contingent commission agreements, rather than to serve the clients’ best interests or obtain the most cost-effective coverage options. (Compl. ¶ 8.) These allegations are sufficient to plead actionable misrepresentations. Cf. In re Sotheby’s Holdings, Inc. Sec. Litig., No. 00 Civ. 1041(DLC), 2000 WL 1234601, at *4 (S.D.N.Y. Aug.31, 2000) (statements about “intense” competition could be misleading where Sotheby’s had eliminated price competition with its primary competitor). Finally, Plaintiffs allege that Defendants falsely represented that MMC’s clients were fully apprised of contingent commissions. Many statements within this category are not actionable. For instance, Plaintiffs do not adequately plead the falsity of certain vague statements, such as a Marsh spokeswoman’s statement that “Marsh has made considerable effort to ensure its clients are well informed about [contingent commission] agreements” and Sinnott’s statement that “brokers are fine-tuning their transparency as their role becomes increasingly important.” (Compl. ¶¶ 343, 616.) To support their argument that MMC’s disclosures were, misleading, Plaintiffs rely in large part on the DPW Report issued by MMC’s legal counsel in January. 2005. (Compl. ¶ 315.) Yet that