Full opinion text
ORDER REGARDING DEFENDANTS’ MOTIONS TO DISMISS AND PLAINTIFFS’ MOTION TO STRIKE EXHIBITS AND PORTIONS OF DEFENDANTS’ MOTIONS GARY ALLEN FEESS, District Judge. I. INTRODUCTION Wet Seal, Inc. (“Wet Seal”) is a specialty retailer that sells clothing to young women, specifically teenagers. For some period of time, Wet Seal managed successfully to navigate the choppy seas of this marketplace. By mid-2002, however, it started losing money, and by early 2003 its overall same store sales were declining. Indeed, Wet Seal’s stock price dropped by almost 75% by the beginning date of the class period in this case. The continuing declines, the potential risks associated with those declines and with the fundamentals of its business, and the vagaries of its marketplace were regularly disclosed in its 10-Q and 10-K filings with the SEC from mid-2002 through late 2004. The record before this Court clearly describes a company that, by late 2003, could best be described as a “turn around” candidate and that would properly have been characterized as a speculative investment. In 2003, as its difficulties mounted, Wet Seal made changes in its management and hired a new designer and, in the second half of the year, implemented new initiatives to turn itself around. A key element of the turnaround was the development of a line of clothing for the 2004 back-to-school season, one of two periods (the other being the Christmas season) that were critical to its overall profitability. While undergoing these turn around efforts, Wet Seal made a number of statements regarding its current performance and its hopes of returning to profitability after its new line was delivered to its retail stores. In the end, however, the 2004 back-to-school line did not succeed, and the company took a $75 million charge against revenues when it became clear that its cash flow would not be sufficient to support the value of its long-lived and tax assets. At about the same time that it took the charge, Wet Seal announced that its new designer had left the company. These announcements caused Wet Seal’s stock price, which had already suffered huge declines over the prior two years, to suffer sizeable further declines. Shortly after the announcement of the charge, the first of several cases in this putative class action were filed in this Court, bringing securities-fraud claims against Wet Seal and certain of its current and former officers and directors, as well as against former Wet Seal shareholder La Senza Corporation (“La Senza”) and two of its officers, who were also Wet Seal directors during the Class Period. The complaints were later consolidated, and in September 2005, the Court granted all Defendants’ motions to dismiss the Consolidated Amended Complaint (“CAC”) with leave to amend. The Court found that the CAC failed to satisfy the particularity requirements of the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(b) (“PSLRA”), for claims under the Securities Exchange Act of 1934 (“the 1934 Act”), 15 U.S.C. §§ 78j(b), 78t(a), 78t-1(a), and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5. The Court noted that the CACC failed to plead a sustainable theory as it essentially attacked the inability of Defendants accurately to predict the failure of the 2004 back-to-school clothing line. (Hearing Tr. at 7.) The theory, and the support for it, have not been strengthened adequately in Lead Plaintiffs’ “First Amended Class Action Amended Complaint” (“FACC”). The problem with the FACC, like the CAC, is that it is premised largely on the idea that management and members of the board knew the new line would fail, which in turn meant that they knew that Wet Seal would fail to recapture its customer base and to generate sufficient cash flows to support its balance sheet. But Plaintiffs fail to plead the concrete facts that support their premise — they do not explain the precise information, known to Defendants but not the investing public, that indicated the 2004 line would fail. The omission of such facts from the FACC is fatal, because Defendants repeatedly warned that, if the 2004 back-to-school line were not successful, they might face charges to earnings or insolvency. These disclosures mean Defendants’ conduct was more consistent with their understanding of the difficult financial condition of the company and their honest hope that their turn-around efforts would succeed and thereby return Wet Seal to profitability. Viewed in context, then, each aspect of the FACC is inadequate. To the extent that the FACC asserts that Defendants committed fraud by violating Generally Accepted Accounting Principles (“GAAP”) as a result of alleged delays in writing off the value of certain assets, Plaintiffs have not pled facts to show why the charge was untimely, and therefore cannot show that financial statements submitted prior to the charge were false or misleading. The decision to take the charge turned largely on the question of whether the “long-lived assets” and the “tax assets” of the company could be supported by future cash flows, which Defendants hoped would increase with the introduction of the 2004 back-to-school line. The FACC, like the CAC, leads largely to the inference that management believed in its turnaround strategy until actual sales fiyures indicated the 2004 back-to-school line would not catch on, at which point Wet Seal properly took the charge against assets. Moreover, to the extent Plaintiffs point to other statements of optimism, they fail to allege facts showing that these statements were in fact false and known to be so, and they ignore contemporaneous cautionary statements contained in press releases and quarterly filings with the SEC. Instead, Plaintiffs present conclusory allegations of intra-cor-porate strife, many of which fail to include adequate corroborating details to satisfy the heightened pleading standard of the PSLRA, and many of which focus on facts that were disclosed to the public. Similarly, the lack of corroborating details defeats the claims that certain Defendants traded on material non-public information — in short, Plaintiffs fail to explain just what that information was. To summarize, the FACC does not meet the heightened pleading requirements of the PSLRA. It fails to plead, with the requisite particularity, that the named Defendants made knowingly false statements about any material matter either directly or by violating GAAP (Section 10(b) and Rule 10b-5), that they controlled someone who violated these provisions (Section 20(a)), or that the La Senza Defendants traded on material nonpublic information (Section 20A). Accordingly, Defendants’ motions to dismiss the FACC are GRANTED WITHOUT LEAVE TO AMEND as to all claims. II. STATEMENT OF FACTS A. Overview This is a federal securities case purportedly brought on behalf of all persons who purchased publicly traded securities of Wet Seal between November 20, 2003 and August 19, 2004 (the “Class Period”). (FACC ¶ 1.) Wet Seal, certain of its officers and directors, and, La Senza, a major shareholder, allegedly issued false and misleading financial reports and statements during the Class Period. {Id. ¶ 2.) The FACC sets forth three categories of allegedly false statements: (1) press releases announcing financial results, including monthly and quarterly sales and revenue information, and SEC filings, which allegedly contained financial information that violated GAAP; (2) statements of optimism that Wet Seal’s consistently diminishing sales trends would be reversed if its 2004 back-to-school line were successful, and that Defendants were confident about Wet Seal and the turnaround; and (3) allegedly false statements by La. Senza officers reassuring the public that it did not sell its Wet Seal stock because of any material non-public information. B. The Turnaround Plan and Alleged Motive for Fraud After enjoying considerable success through mid-2002, Wet Seal’s business had declined dramatically by the beginning of the Class Period. (Id. ¶¶ 25-31.) Wet Seal’s stock price fell from $37 per share in early 2002 to $10 per share in November 2003. (Historical Prices for Wet Seal (Ex. 28).) Additionally, Plaintiffs contend that by February 2003, eight months prior to the start of the Class Period, Wet Seal needed to close at least 50 underperform-ing stores and to record, under GAAP, a loss for tens of millions of dollars in impaired store assets. Defendant Irving Teitelbaum, then the CEO of Wet Seal and Chairman and CEO of La Senza, was allegedly informed of the need to close these stores by a “director level” employee in Wet Seal’s real estate department, which monitored store profitability. In addition, by November 2003 Wet Seal had experienced over 20 consecutive months and five consecutive quarters of losses and still needed to close at least 50 stores. (FACC ¶ 2.) Moreover, given a cash shortage and a new credit line that was set to expire, Defendants needed to extend Wet Seal’s credit line and obtain additional cash. (Id.) In the second half of 2003, though, Wet Seal began to implement a turnaround program intended to return the company to profitability. (2003 Form 10-K at 3-5, 11-12 (Ex. 2).) As part of its turnaround strategy, Wet Seal hired new management; for instance, Peter Whitford was hired as President/CEO for Wet Seal in June 2003, Allan Haims was brought in as President of the Wet Seal division in August 2003, and Victor Alfaro, a famous fashion designer, was retained as Senior Vice President/Creative Director for the Wet Seal division. (8/20/03 Press Release (Ex. 6); FACC ¶ 29.) The 2004 back-to-school line was the centerpiece of Wet Seal’s turnaround strategy, as Whitford stated that “[w]e look forward to introducing some promising new merchandising strategies — the full effects of which are expected to materialize in our back-to-school and fall lines.” (FACC ¶ 44.) Whitford also stated that Alfaro would “develop a fresh new look for next year’s [2004] spring and back-to-school” lines. (Id.) C. Alleged Deception about Wet Seal’s Progress and the Back-to-School Line In late 2003, Whitford represented that Wet Seal stores were “continuing to gain ground ... putting us on track to meet our sales estimates.” (Id. ¶ 44(c).) He also indicated that Victor Alfaro “is an employee of Wet Seal. His time is 100 percent with Wet Seal.” (Id. ¶ 44(f).) After previewing the back-to-school line in February 2004, Defendant Whitford stated that he believed the new designs were “fresh,” “relevant,” and “unique to Wet Seal.” (Id. 44(g).) In March 2004, Whit-ford stated that Wet Seal was “on track to deliver improved financial performance in the fall, in line with our turnaround plan.” (Id. ¶ 44(c).) However, Plaintiffs contend that the 2004 back-to-school fine, which Plaintiffs characterize as disastrous, contradicted Wet Seal’s public assurances about its turnaround plan. (Id. ¶¶ 44-51.) Infighting between Haims and Alfaro and prolonged absences by Alfaro allegedly caused Wet Seal to resurrect an old and failed line of clothing from Zutopia — a division of Wet Seal geared towards a younger age group — for its 2004 back-to-school line. Moreover, although Wet Seal previewed its back-to-school line for analysts on June 8, 2004 and received at least some positive feedback (Exs. 18, 19, 20, 21, 22), Wet Seal ordered only 65% of the inventory it needed to meet its projected sales for the back-to-school line, in purported acknowledgment that the line would not be a success. (FACC ¶¶ 45(d), 45-51.) Moreover, because Wet Seal purchased half of the line on the open market, in addition to using Zutopia’s designs, Plaintiffs allege that the line lacked a cohesive look. Therefore, Plaintiffs contend that the back-to-school line “flopped” and its failure was confirmed by Defendants, who no later than June 2004 sold off portions of its line to “jobbers,” a term for merchants who buy overruns from retailers and then sell them at discounted prices. (Id. ¶¶ 45, 53-54.) Nonetheless, purportedly in support of an illusion that Wet Seal was progressing towards a successful turnaround and in the course of reporting false financial results in violation of GAAP, Defendants made comments such as Defendant Whitford’s June 8, 2004, statement that “I am pleased to report that we are on plan to achieve that turnaround.” (Id. ¶ 44(k).) In addition, Douglas Felderman, who became CFO in April 2004, and Whitford signed Wet Seal’s June 10, 2004 Form 10-Q that again failed to reflect the allegedly necessary writedown of Wet Seal’s impaired assets. Plaintiffs argue that by reporting the allegedly required impairment charges, Defendants would have created formidable obstacles to securing the new credit line and a potential equity investment to raise the cash Wet Seal needed. (Id. ¶¶ 3, 36-41.) Therefore, Defendants allegedly worked to “maintain[] the illusion” of a turnaround, of which the 2004 back-to-school line was the centerpiece, until after Wet Seal secured a new credit line and additional cash from equity sales, and until after shareholder La Senza sold 100% of its Wet Seal shares. (Id. ¶¶ 4-5, 24.) According to Plaintiffs, the scheme succeeded. In part based on the allegedly inflated asset valuation, Wet Seal secured a $50 million credit facility on June 1, 2004, which replaced a previous credit facility that was due to expire at the end of that month. (Id. ¶¶34, 65-74.) On June 30, 2004, Wet Seal also concluded a private equity placement netting $27.2 million. (Id. ¶¶ 74.) D. Insider Sales Allegedly continuing with the fraud, on July 7, 2004 Haims claimed that positive reaction to the back-to-school line had him “highly confident” about the upcoming season. (Id. ¶ 55(l).) Moreover, in a press release the next day, Whitford stated that “[w]e remain confident that the new assortment ... will deliver a better operating performance in the second half of the year.” (Id. ¶ 44(m).) Based on those allegedly false statements, analysts upgraded their ratings of Wet Seat. (Id. ¶ 46.) Plaintiffs allege that while possessing material, nonpublic information, such as (1) the need to close 50 underperforming stores (id. ¶ 26), (2) the fact that the Alfaro back-to-school line was simply an assemblage of Zutopia and open-market designs, (id. ¶ 50), (3) the fact that portions of the line had “flopped” and already been sold to jobbers in June 2004, (id. ¶ 54), and (4) adverse daily sales reports (id. ¶ 80), Teitelbaum and Gross, Secretary of Wet Seal, worked to extricate La Senza — of which Teitelbaum and Gross were both also officers and directors — from Wet Seal by selling 100% of La Senza’s 10% equity possession in Wet Seal. Indeed, La Senza sold its 3.1 million shares for proceeds of almost $15.8 million between July 13 and 19, 2004. (Id. ¶ 75.) In the midst of La Senza’s selloff, Teitel-baum allegedly lied to the market in saying that the sales were “not a vote of no confidence” in Wet Seal, and La Senza’s CEO Anna Palestini claimed that La Senza decided to sell its Wet Seal shares because “Wet Seal is not part of our strategy,” because La Senza was working to become a “pure-play” lingerie retailer and Wet Seal was not a lingerie marketer. (Id. ¶ 83.) Plaintiffs maintain that these statements were designed to hide La Senza’s true motive to abandon Wet Seal before the announcement of material adverse news that would greatly diminish the trading price of Wet Seal common stock. They also allege that La Senza had previously represented that it had already become a “pure play” lingerie retailer, which suggested that its ownership interest in Wet Seal was not inconsistent with that posture, and also that it continued to hold assets in other businesses that were “far removed” from women’s apparel. (Id. ¶¶ 78, 82.) E. The Adverse Disclosures On August 5, 2004, Wet Seal disclosed its poor sales performance for the four weeks ending July 31, 2004, and Wet Seal’s shares closed at $3.00 per share, a one-day 30% drop. (Id. ¶ 57.) On August 9, 2004, Wet Seal disclosed that Alfaro had left the company and the stock fell 28%. (Id. ¶¶ 58-59.) In six days, Wet Seal shares lost 61% of their value on volume of 23 million shares. (Id. ¶ 59.) Also on August 9, 2004, Haims, allegedly lying, said that “[w]e believe that our new Fall merchandise is both fashion forward and unique and is receiving positive feedback from our customers.” (Id. ¶ 44(n).) On August 19, 2004, Wet Seal announced to the market a net loss from continuing operations of $3.20 per share for the quarter ending July 31, 2004. (Id. ¶ 60.) Wet Seal explained the loss by stating that in light of disappointing sales results in the initial back-to-school season and recent financial performance, “management believes it is unlikely that the company writ recover or realize the carrying value of [certain long-lived] assets” and that “[a]s a result, the company ha[d] taken a non-cash charge totaling $75.5 million.” (Id.; 8/19/04 Press Release (Ex. 16).) Wet Seal’s shares then fell to $.85 per share on August 20, 2004. (FACC ¶ 6.) The same day, the Orange County Register reported Defendant Whitford’s statement that “[t]he business has been in decline for such a long period of time that Wet Seal has lost its customer base.” (Id. ¶ 62.) Plaintiffs’ claims are founded on the idea that Wet Seal had lost — and knew it had irretrievably lost — its customer base since the beginning of the Class Period, and that its claims otherwise were merely a charade to shift some of the fallout to unsuspecting investors. (Id.) Ill DISCUSSION A. The Legal Standard for Averments of Securities Fraud Unlike most pleadings, the PSLRA imposes a heightened standard for claims of securities fraud. Fischer v. Vantive Corp (In re Vantive Corp. Secs. Litig.), 283 F.3d 1079, 1084-85 (9th Cir.2002) (“Vantive ”); 15 U.S.C. § 78u-4(b). “The purpose of this heightened pleading requirement was generally to eliminate abusive securities litigation and particularly to put an end to the practice of pleading ‘fraud by hindsight.’ ” Id. (citation omitted). The statute provides: In any private action arising under this title ... in which the plaintiff alleges that the defendant— (A) made an untrue statement of a material fact; or (B) omitted to state a material fact necessary in order to make the statements made, in the light of the circumstances in which they were made, not misleading; the complaint shall specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed. 15 U.S.C. § 78u-4(b)(l); accord Vantive, 283 F.3d at 1085, In re Syncor Int’l Corp. Secs. Litig., 327 F. Supp 2d 1149, 1156 (C.D.Cal.2004). Thus, specific false statements must be pled with particularity. This means that “a plaintiff must provide a list of all relevant circumstances in great detail.” Janas v. McCracken (In re Silicon Graphics Sec. Litig.), 183 F.3d 970, 984 (9th Cir.1999) (“Silicon Graphics”) (emphasis added). Further, the complaint must “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2) (emphasis added). In other words, a complaint may properly be rejected if it fails to “allege contemporaneous facts in sufficient detail and in a manner that would create a strong inference that the alleged adverse facts were known at the time of the challenged statements.” Vantive, 283 F.3d at 1085 (citing Ronconi v. Larkin, 253 F.3d 423, 435 (9th Cir.2001)); see also Sparling v. Daou (In re Daou Sys.), 411 F.3d 1006, 1015 (9th Cir.2005) (“Daou ”). The requirement of a “strong” inference of scienter means that “the court must consider all reasonable inferences to be drawn from the allegations, including inferences unfavorable to the plaintiffs.” Gompper v. VISX, Inc., 298 F.3d 893, 897 (9th Cir.2002) (emphasis in original); accord, e.g., Emplrs. Teamsters Local Nos. 175 & 505 Pension Trust Fund v. Clorox Co., 353 F.3d 1125, 1134 (9th Cir.2004) (“Clorox”). Indeed, the Supreme Court has recently emphasized that “[t]he strength of an inference cannot be decided in a vacuum.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., — U.S.-,-, 127 S.Ct. 2499, 2510, 168 L.Ed.2d 179 (2007). Accordingly, under the PSLRA, “[a] complaint will survive ... only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any opposing inference one could draw from the facts alleged.” (Id.) In addition, although the Court considers the allegations in the complaint “as a whole” in assessing the required strong inference, Livid Holdings Ltd., 416 F.3d at 948; No. 8J( Employer-Teamster Joint Council Pension Trust Fund v. Am. W. Holding Corp., 320 F.3d 920, 932 (9th Cir.2003) (“America West”). Nevius v. Read-Rite Corp. (In re Read-Rite Corp. Secs. Litig.), 335 F.3d 843, 846 (9th Cir. 2003)(“Read-Rite”), the Court must also analyze scienter separately for each alleged misrepresentation and each defendant. The two Circuit courts to address the issue and several courts in the Ninth Circuit — including this Court in ruling on the previous motions to dismiss- — -have accepted that prior case law allowing group pleading “did not survive the PSLRA. As such, the individual defendants cannot be liable for the false statements found in the complaint on a group-pleading theory.” Syncor, 327 F.Supp.2d at 1172 (emphasis added) (Baird, J.); accord South-land Sec. Corp. v. INSpire Ins. Solutions Inc., 365 F.3d 353, 364-65 (5th Cir.2004): Makor Issues & Rights, Ltd. v. Tellabs, Inc., 437 F.3d 588, 602-03 (7th Cir.2006) (citing Southland) In re Lockheed Martin Corp. Secs. Litig., 272 F.Supp.2d 928, 936 (CD.Cal.2002) (Pfaelzer, J.). In addition, plaintiffs cannot allege “intent” in general terms or simply “motive and opportunity” or “recklessness,” but instead must “plead, at a minimum, particular facts giving rise to a strong inference of deliberate or conscious recklessness.” Silicon Graphics, 183 F.3d at 979; Livid Holdings Ltd., 416 F.3d at 948. “Thus the complaint must allege that the defendant made false or misleading statements either intentionally or with deliberate recklessness or, if the challenged representation is a forward looking statement, with ‘actual knowledge ... that the statement was false or misleading.’ ” Vantive, 283 F.3d at 1085 (citing 15 U.S.C. § 78u-5(c)(1)(B)(i)) (alteration in Vantive). B. Preliminary Considerations: The Scope of the Record 1. The Legal Standard Defendants submit a variety of exhibits in support of their motions to dismiss, and properly request that the Court take judicial notice of all of them. As one court has summarized the applicable standard: In a motion to dismiss, a Court may take judicial notice of documents attached to or referenced in the complaint without converting the motion into one [for] summary judgment where the authenticity of the documents are not in dispute .... In addition, the court may consider public fílings, including SEC filings .... Syncor, 327 F.Supp.2d at 1156 (citations omitted, emphases added). As well as SEC filings, the Court may also take judicial notice of other matters of public record such as press releases, analyst reports, news articles, and conference call transcripts in cases such as this, where they are relied upon by the complaint. See, e.g., In re Copper Mountain Secs. Litig., 311 F.Supp.2d 857, 863-64 (N.D.Cal.2004) (“Copper Mountain”); see also In re Homestore.com. Inc. Secs. Litig., 347 F.Supp.2d 814, 817 (C.D.Cal.2004) (“Home-store”); In re Guess?, Inc. Secs. Litig., 174 F.Supp.2d 1067, 1068 (C.D.Cal.2001) (“Guess? ”). Such documents as analyst reports, however, may only be considered “when they are submitted to establish ‘whether and when certain information was provided to the market’ not the truth of the matters asserted in the reports.” See In re Infonet Servs. Corp. Secs. Litig., 310 F.Supp.2d 1106, 1116 (C.D.Cal.2003) (“Infonet”) (quoting In re PetSmart, Inc. Secs. Litig., 61 F.Supp.2d 982, 987 n. 1 (D.Ariz.1999) (“PetSmart ”)). However, courts regularly accept that facts in such documents may properly be considered substantively, where plaintiffs rely on the same documents and they are central to the allegations of intent to defraud. See PetSmart, 61 F.Supp.2d at 987 n. 1; Infonet, 310 F.Supp.2d at 1116. In addition, on a motion to dismiss securities fraud claims, “the court may consider the full text of the relevant documents to determine whether the plaintiffs have alleged material misrepresentations or omissions,” without converting the motion to a motion for summary judgment. Infonet, 310 F.Supp.2d at 1113 (citing In re Stac Elecs. Secs. Litig., 89 F.3d 1399, 1405 n. 4 (9th Cir.1996) (“Stac Electronics”)). At least where plaintiffs do not dispute the authenticity of certain reports, the Ninth Circuit has reasoned: As the district court pointed out, ‘having raised questions about [officers’] stock sales, based [her] allegations on [officers’] SEC filings, and submitted expert declarations that rely on the SEC forms at issue, [Brody] can hardly complain when [the officers] refer to the same information in their defense.’ Silicon Graphics, 183 F.3d at 986; see also Infonet, 310 F.Supp.2d at 1116 n. 10. In the same vein: [D]ocuments crucial to the plaintiffs claims but not explicitly incorporated in a complaint can be noticed in order to prevent a plaintiff from surviving a Rule 12(b)(6) motion by deliberately omitting references to documents upon which their claims are based. Wietschner v. Monterey Pasta Co., 294 F.Supp.2d 1102, 1109 (N.D.Cal.2003) (citing Parrino v. FHP, Inc., 146 F.3d 699, 706 (9th Cir.1998)) (taking judicial notice of SEC forms and press releases that were “clearly, if indirectly, referenced in the Complaint as integral to the stock sale allegations made in the Complaint.”). 2. Plaintiffs’ Motion to Strike Although Plaintiffs do not challenge most of Defendants’ submissions, they move to strike certain exhibits and references in the briefs thereto, as follows: —Exhibits 9 [Press Release], 18-22 [Analyst Reports], and 29 [SEC filing] to the Avrith Declaration; —Exhibits A, B, G, M and T [La Senza Entities’ Filings with Canadian Securities Administrators], D-F and S [Wet Seal SEC filings], and K-L [La Senza Press Releases] to the Longo Declaration; and —Exhibit 9 [Newspaper article] to the Nagler Declation Plaintiffs accuse Defendants of improperly referring to matters that are not incorporated into the FACC and therefore are not properly considered on a motion to dismiss. Plaintiffs request that if the Court chooses to consider these exhibits, that the motion be converted into one for summary judgment and Plaintiffs be allowed to take discovery pursuant to Fed.R.Civ.P. 56(f). Plaintiffs’ contentions lack merit. First, the Court may properly take judicial notice of the SEC filings as public records of undisputed authenticity. See, e.g., MGIC Indent. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir.1986); see also In re Gupta Corp. Secs. Litig., 900 F.Supp. 1217, 1228 (N.D.Cal.1994) (“Gupta Corp.”); Plevy, 38 F.Supp.2d at 821 (taking judicial notice of SEC filings, even those “not specifically mentioned” in the complaint). Moreover, to the extent that Defendants submit documents that were filed publicly pursuant to the laws of Canada, (see Longo Deck, Exs. A, B, G, & T), the documents are analogous and judicially noticeable in the same manner as the SEC documents. In ruling on a motion to dismiss under the PSLRA, “the court may take judicial notice of information that was publicly available to reasonable investors at the time the defendant made the allegedly false statements.” Copper Mountain, 311 F.Supp.2d at 864 (citation omitted). Plaintiffs base their objection to the Canadian filings on the Supreme Court’s acceptance of the “general principle that foreign law is to be proved as a fact.” Black Diamond S.S. Corp. v. Robert Stewart & Sons, 336 U.S. 386, 397, 69 S.Ct. 622, 93 L.Ed. 754 (1949). However, Defendants are not calling into question an issue of foreign law, but are instead referring to publicly available documents, and thus Plaintiffs’ distinction between domestic and Canadian filings is unpersuasive. Moreover, several of the documents that Plaintiffs challenge were referred to by Plaintiffs in their FACC or opposing papers, or were submitted previously by Defendants in support of their motions to dismiss the CAC and were not objected to. (Ex. 9 [Press Release], Exs. 18-22 [Analyst Reports], Ex. 29 [SEC filing], & Exs. M, T [La Senza filings].) These documents are therefore properly subject to judicial notice now for this additional reason. See, e.g., Copper Mountain, 311 F.Supp.2d at 864 (“As it is a record in the court’s own file, it is the proper subject of judicial notice.”). And even if objection to these documents had not been waived, Defendants submit them for the availability of information to the market (such as with respect to the quality of the back-to-school line), rather than for the truth of any matter. These documents are therefore likewise subject to judicial notice as matters of public record and unquestioned authenticity. Finally, with respect to press releases submitted as Exhibits K and L to the Longo declaration, La Senza Defendants disagree with Plaintiffs’ assertion that these documents are “not referred to or relied upon in the FAC[C]” by noting the explicit allegation that “[n]owhere in the 2003 annual report or in any other public statement prior to La Senza’s sale of its Wet Seal stock did La Senza, Teitelbaum or Gross suggest that La Senza’s investment in Wet Seal is inconsistent with La Senza’s long-term strategy.” (FACC ¶ 82 (emphasis added).) In essence, then, the FACC refers to the universe of La Senza’s public statements, of which Exhibits K and L are a part. The Ninth Circuit has accepted that “if a plaintiffs claims are predicated upon a document, the defendant may attach the document to his Rule 12(b)(6) motion, even if the plaintiffs complaint does not explicitly refer to it.” Parrino, 146 F.3d at 706 (emphasis added); see also Syncor, 327 F.Supp.2d at 1156; Copper Mountain, 311 F.Supp.2d at 864. This law is applicable here, and means the press releases are properly part of the record. For all these reasons, Defendants’ requests for judicial notice are GRANTED, and Plaintiffs’ motion to strike is DENIED, as is the request to convert the motion into one for summary judgment. C. Claims Against All Defendants Pursuant to Section 10(b) and Rule 10b-5 To state a violation of Section 10(b) and Rule 10b-5, see 15 U.S.C. § 78j(b), 17 C.F.R. § 240.10b-5, a plaintiff must allege: (1) a misrepresentation or omission; (2) of material fact; (3) made with scienter; (4) upon which plaintiffs relied; (5) in connection with the purchase or sale of securities; and (6) proximately resulting in injury to the plaintiffs. “[A] fact is material if there is a substantial likelihood that a reasonable investor would consider it important in his or her decision making.” In re Immune Response Secs. Litig., 375 F.Supp.2d 983, 1020 (S.D.Cal.2005) (quoting America West, 320 F.3d at 934 (internal citations omitted)). Here, Plaintiffs essentially claim three categories of misrepresentation give rise to liability under Section 10(b) and Rule 10b-5. First, they contend Wet Seal’s financial statements from November 20, 2003 to August 19, 2004 were rendered misleading by improper accounting practices, and therefore that the statements amounted to actionable misrepresentations attributable to Wet Seal and the officers that signed the statements (Whitford, Deckop, Gross, Felderman, and Teitelbaum). Second, they claim Deckop, Halms, and Whitford (“the Officer Defendants”), and therefore Wet Seal, made false statements about the success of the turn-around plan, and specifically the success of the 2004 back-to-school line. Third, Plaintiffs allege Teitel-baum and La Senza CFO Anna Palestini lied to the market in their public explanations for La Senza’s sale of its Wet Seat stock. As discussed below, however, Plaintiffs fail adequately to plead that any of these purported misrepresentations were actionable. 1. Plaintiffs’ GAAP Allegations Fail The first category of purported misrepresentation arises from alleged accounting improprieties, which Plaintiffs contend made Wet Seal’s financial statements materially false. However, Plaintiffs fail adequately to allege the accounting violations in the first instance, and even if they had, they fail adequately to allege that the accounting practices were accompanied by the requisite scienter. a. Plaintiffs Have Failed Adequately to Allege a Violation of GAAP Plaintiffs correctly argue that GAAP violations can give rise to Section 10(b) liability. “Financial statements filed with the Commission which are not prepared in accordance with generally accepted accounting principles will be presumed to be misleading or inaccurate, despite footnote or other disclosures, unless the Commission has otherwise provided.” 17 C.F.R. § 210.4 — 01(a)(1); see also Miller v. Pezzani (In re Worlds of Wonder Sec. Litig.), 35 F.3d 1407, 1418 (9th Cir.1994) (“WOW”) (“[A] company that ‘substantially overstates its revenues by reporting consignment transactions as sales ... makes false or misleading statements of material fact.’ ” (citations omitted and alteration in original)). Here, Plaintiffs point to the $75 million impairment charge that Wet Seal eventually took on August 19, 2004, and contend GAAP required Wet Seal to take that charge as early as November 1, 2003. As a result of the delay, the FACC alleges that Wet Seal’s financial statements and announcements of quarterly results in the period from November 20, 2003 to August 19, 2004 were false. (Id. ¶35.) Such “false statements” — through signatures on Wet Seal filings — were allegedly made by Defendants Whitford, Deckop, Felderman, Teitelbaum, and Gross (though not Haims). Indeed, this is the only kind of false statement attributed to Felderman and Gross. In support of the GAAP claims, Plaintiffs reiterate many allegations the Court deemed insufficient in rejecting the CAC. They also add that (1) many of the stores were “run down,” and (2) Wet Seal needed to close 50 underperforming stores, but refused to do so. Plaintiffs make no attempt to elaborate on the allegation of “run down” stores, and provide only slightly more detail as to the need to close stores. They allege that a director-level employee in Wet Seal’s real estate department, which evaluated profitability of Wet Seal stores, told then-CEO Irving Teitel-baum in February 2003, which was before the Class Period, that Wet Seal needed to close 50 underperforming stores, and explained how these stores were draining profitability. (FACC ¶¶ 96-98.) Ironically, Plaintiffs do not recount the reasons for the profitability drain in the FACC; they merely allege that the real estate director told Teitelbaum the reasons, but without specifying what those reasons were. In any event, the profitability drain was purportedly “confirmed” (though the FACC does not indicate to whom) by a post-Class Period analysis that indicated approximately 90% of Wet Seal’s losses were attributed to 10%, or approximately 50, of Wet Seal’s stores. (Id. ¶ 97.) But the FACC does not connect up the underperforming stores with the alleged GAAP violation. First, Plaintiffs simply contend that Statement of Financial Accounting Standards (“SFAS”) No. 144 required that Wet Seal determine whether its long-lived assets were impaired, since indications of possible impairment existed. (Pis.’ Opp. to Wet Seal Mot. at 6; see SFAS No. 144; FACC ¶¶ 8, 37.) Although Plaintiffs are correct that SFAS No. 144, paragraph 8 describes the circumstances when a long-lived asset should be tested for recoverability (Neville Deck, Ex. 7), the standard does not provide that the need to test equates to an obligation to write down. Moreover, citation to SFAS No. 144 does not further Plaintiffs’ case because the FACC includes no allegations that this testing was not done, and a 10-K indicates that it was done. (Ex. 2 at F-8.) Thus, nothing in the discussion of SFAS No. 144 suggests that Wet Seal violated GAAP by waiting to August 2004 to write down certain of its assets. In short, whether or not GAPP requires that charges be taken under specified circumstances, Plaintiffs have not established that those circumstances were present pri- or to August 2004. Thus, for example, although Plaintiffs allege Teitelbaum was told of a need to close stores, they fail to include any underlying reasons for this advice, without which they have not shown a GAAP violation. Similarly, Plaintiffs fail to allege any facts supporting the reliability of the post-Class Period report that purportedly confirmed the existence of 50 underperforming stores' — such as who prepared it, the source of its information, or the stores to which it referred. The omission of these details renders essentially meaningless the allegation regarding the existence of such a report. See Silicon Graphics, 183 F.3d at 985 (“We would expect that a proper complaint which purports to rely on the existence of internal reports would contain at least some specifics from those reports as well as such facts as may indicate their reliability.”). Equally unavailing is Plaintiffs’ contention that given Wet Seal’s cumulative losses, GAAP required that a loss reserve be recorded for deferred tax assets. They cite to SFAS No. 109, “Accounting for Income Taxes,” which provides that “[Forming a conclusion that a valuation allowance is not needed is difficult if there is negative evidence such as cumulative losses in recent years.” (Nagler Dec!., Ex. 8 [SFAS No. 109] (emphasis added); see Pis.’ Opp. to Wet Seal Mot. at 6; FACC ¶¶ 3841.) However, this does not mean that an earlier recording was required, and Plaintiffs do not allege any facts showing that the conclusion or testing was improperly made or done. Because SFAS No. 144 also notes that “significant judgment is required in developing estimates of future cash flows” to test a long-lived asset for recoverability (SFAS No. 144, ¶819; see also id. ¶622), that Wet Seal cash flow estimates proved in hindsight to be too optimistic does not mean that the failure to take an impairment charge earlier was a violation of GAAP. Further, the FACC contains no facts showing that Wet Seal’s estimates of income from the assets in question — i.e., the underperforming stores — were less than their carrying value, or that Wet Seal’s estimates were unfounded. Plaintiffs attempt to cure this defect by pointing to allegations that “by November 2003, Wet Seal had lost its customer base, suffered 20 straight months of declining store sales and had five straight quarters of significant losses.” (Pis.’ Opp. to Wet Seal Mot. at 6 (citing FACC ¶¶ 2, 31).) They add that Wet Seal had internal reports showing the financial drain from 50 underper-forming stores. (Pis.’ Opp. to Wet Seal Mot. at 6 (citing FACC ¶¶ 33, 96-98).) Even in them opposing papers, therefore, Plaintiffs cannot state the necessary facts. They simply reiterate: “Faced with the decision to reveal a true financial picture, threatening its needed financing, Wet Seal elected to delay taking the required charges and instead misled investors about the turnaround of its business.” (Pis.’ Opp. to Wet Seal Mot. at 6 (citing FACC ¶ 33).) This conclusory allegation falls well short of the particularity required by the PSLRA. In short, Plaintiffs simply do not provide enough information about the allegedly underperforming stores — even in light of their other allegations of Wet Seal’s weakened position — to lead reasonably to the inference that GAAP was violated. Not surprisingly, other courts have rejected claims similar to those presented here. DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th Cir.1990)(dismissing claim that an alleged delay in 'writing down a loan violated GAAP); In re ICN Pharms, Inc., 299 F.Supp.2d 1055, 1065 (C.D.Cal. 2004) (“ICN”) (“even a delinquent write-down of the impaired assets, without anything more, does not state a claim of securities fraud, stating at best a bad business decision ” (emphasis added)); Wenger v. Lumisys, Inc., 2 F.Supp.2d 1231, 1245 (N.D.Cal.1998) (“[disclosure of accurate historical data does not become misleading even if less favorable results might be predictable by the company in the future”); see also Santa Fe Indus., Inc. v. Green, 430 U.S. 462, 477, 97 S.Ct. 1292, 51 L.Ed.2d 480 (1977) (stating that not all instances of “corporate mismanagement” fall within the purview of Section 10(b)). Based on this authority, and the defects noted above, the Court concludes that Plaintiffs have failed adequately to plead a falsity in the form of a GAAP violation. b. Even if Plaintiffs Had Adequately Alleged GAAP Violations, Plaintiffs Have Failed Adequately to Allege Scienter as to GAAP Moreover, even if the FACC had alleged falsity in the form of a GAAP violation, it would nonetheless fail for lack of scienter. While it is true that “[violations of GAAP standards can also provide evidence of scienter,” Daou, 397 F.3d at 712, the mere publication of inaccurate accounting figures, or a failure to follow GAAP, without more, does not establish scienter. Rather, ... [t]he plaintiff must prove that the accounting practices were so deficient that the audit amounted to no audit at all, or an egregious refusal to see the obvious, or to investigate the doubtful, or that the accounting judgments which were made were such that no reasonable accountant would have made the same decisions if confronted with the same facts. DSAM Global Value Fund v. Altris Software, Inc., 288 F.3d 385, 390 (9th Cir.2002) (citation omitted): see also In re U.S. Aggregates, Inc. Secs. Litig., 235 F.Supp.2d 1063, 1073 (N.D.Cal.2002) {“U.SAggre-gates ”) (referring to DSAM for the proposition that “even an obvious failure to follow GAAP does not [without more] give rise to an inference of scienter”). Indeed, even deliberate GAAP violations do not by themselves establish scienter. In re Nuko Info. Sys., Inc. Secs. Litig., 199 F.R.D. 338, 344 (N.D.Cal.2000) (citing WOW, 35 F.3d 1407, 1426 (9th Cir.1994); Hockey v. Medhekar, 30 F.Supp.2d 1209, 1224 (N.D.Cal.1998)). Here, Plaintiffs fail adequately to plead facts giving rise to the requisite strong inference of scienter because: (1) they do not allege that any individual Defendant knew or was reckless in disregard of the GAAP violations; and (2) they attribute fraudulent motives to Defendants that are at best implausible. i. The FACC Does Not Adequately Allege Individual Knowledge or Reckless Disregard of GAAP Violations The FACC’s first defect is that it, like the CAC, lacks any allegation that individual officers knew that Wet Seal’s financial reports or statements were false or misleading because the charges to earnings needed to be taken earlier, or that they were deliberately reckless in connection with the same. This defect alone is fatal to the GAAP claims, because to adequately allege that Wet Seal’s financial statements were fraudulent, Plaintiffs were required to provide details concerning the individual defendants’ roles in the alleged accounting fraud. See In re Pac. Gateway Exch., Inc. Sec. Litig., 169 F.Supp.2d 1160, 1167 (N.D.Cal.2001). Therefore, [u]nlike a case in which the court found sufficient pleading detail, Plaintiffs have failed both to substantiate that Defendants committed a violation of GAAP and have failed to provide detailed evidence of the contemporaneous decision-making behind the alleged accounting errors that would combine to show the required scienter .... ICN, 299 F.Supp.2d at 1065 (emphasis added); cf. Daou, 411 F.3d at 1018, 1023 (finding a pleading sufficient where plaintiffs referred to specific evidence that the defendants knew the financials were based on fraudulent accounting and “personally directed” violations of stated accounting policy and GAAP (emphasis added)); In re McKesson HBOC Secs. Litig., 126 F.Supp.2d 1248, 1272-1273, 1275 (N.D.Cal. 2000) (“McKesson ”) (finding scienter where a defendant “allegedly encouraged improper recognition of contingent, consignment, and fictitious sales, and he resisted ... initial attempts to regularize accounting procedures”). To the contrary, Plaintiffs have not alleged anything about individual officers’ involvement in the alleged improper accounting. {See Officers’ Reply at 7.) Nonetheless, Plaintiffs contend they establish scienter because certain issues are of such importance to a company that it would be “patently incredible” to argue that high-level executives did not know about them. While the sheer importance of such issues may sometimes give rise to a strong inference of scienter, see, e.g., America West, 320 F.3d at 943 n. 21; see also In re Northpoint Commc’ns Group, Inc., Secs. Litig. & Consol. Cases, 221 F.Supp.2d 1090, 1104-05 (N.D.Cal.2002) (“Northpoint ”). Plaintiffs have not established that the need to take the accounting charge was one of them. Thus, the failure to allege individual culpability remains fatal. ii. Plaintiffs’ Allegations of Motives to Defraud are Unavailing Similarly insufficient are Plaintiffs’ allegations as to potential motives to defraud with improper accounting practices. Plaintiffs’ main contention as to motive is that Defendants delayed taking the impairment charge so as to appear more attractive to lenders (from whom they needed to secure a $50 million line of credit) and also to investors (from whom they needed to secure a major private equity placement). (FACC ¶¶ 34, 65-74.) They also allege that Defendant Whitford delayed taking the charge so as to increase the possibility that he would earn a bonus in 2004. However, a variety of facts in the record undercut these theories and make it more plausible that the delay in taking the charge was simply the result of optimism that the 2004 back-to-school line would spark a meaningful turnaround. (a). Wet Seal’s Disclosures Make It Unlikely Defendants Would Have Delayed Closing Stores to Trick Lenders or Investors First, Defendants’ purported motive of fooling lenders or private equity investors by delaying store closures is sharply undercut by Wet Seal’s actual practices, which involved detailed disclosures of the risks associated with underperforming stores. For example, Wet Seal announced the closure of 70 stores (from the Wet Seal division and others) at the beginning of the Class Period and before it obtained the fínancing which Plaintiffs contend motivated the “refusal” to close stores. (See 12/4/03 Conference Call Tr. at 3 (Ex. 23) (announcing closure of 16 Wet Seal and Arden 6. stores in 4Q 2003 and 23 Wet Seal and Arden B stores in 2004); 1/7/04 Press Release (Ex. 9) (announcing closure of 31 Zutopia stores by end of IQ 2004 or early 2Q 2004); see also Ex. 5.) Wet Seal also plainly warned that closing stores would require it to “write down the carrying value of these impaired assets to realizable value, a non-cash event which would negatively impact our earnings and earnings per share.” (2003 Form 10-K Ex. 99.1 at 2 (Ex. 2).) Additionally, the SEC filings referenced in the FACC reflect that Wet Seal in fact considered whether charges were required on a quarterly basis, and warned about possible charges to earnings if Wet Seal’s back-to-school season were not successful. For instance, the 12/15/03 10-Q described the importance of the back-to-school season, explained the risks associated with ongoing operating losses, noted the decline in comparable store sales, (3Q 2003 Form 10-Q at 11, 35, 36, 40 (Ex. 4); id., Ex. 99.1 at 2), and stated: In the future, we could decide to close stores or curtail operations that are producing continuing financial losses. If we do so, we would be required to write down the carrying value of these impaired assets to realizable value, a non-cash event which would negatively impact our earnings and earnings per share. (3Q 2003 Form 10-Q at 37 (Ex. 4); see also 11/20/03 Press Release (Ex. 7); 3/18/04 Press Release (Ex. 11).) The 3/30/04 and 6/10/04 SEC filings contained similar and more extensive disclosures and warnings. (2003 Form 10-K at 5-7, 11,13, F-8, F-9 (Ex. 2); id., Ex. 99.1 at 1, 2; IQ 2004 Form 10-Q at 8,15-16, 25, 26 (Ex. 5); id., Ex. 99.1 at 1, 4.) As another example, for IQ 2004 (ending May 1, 2004), Wet Seal again reported a loss in its share value and reported the continuing decline in its comparable store sales, warning specifically that it might be required to write down certain assets if losses continued. (IQ 2004 Form 10-Q at 8-9,17-18 (Ex. 5).) Wet Seal also even warned its investors about the possibility of bankruptcy. (IQ 2004 Form 10-Q Exhibit 99.1 at 1 (Ex. 5).) Thus, Wet Seal repeatedly disclosed the risks involved and the possibility that the hoped-for turnaround would never materialize. In addition, Wet Seal expressly warned about the possibility of an impairment charge if the back-to-school season did not succeed. As the Ninth Circuit reasoned in an analogous circumstance, the “detailed risk disclosure ... negates an inference of scienter.” WOW, 35 F.3d at 1425. (b). Plaintiffs Fail to Demonstrate that Whitford Would Have Delayed the Write-off to Increase His Bonus In addition to Wet Seal’s desire to raise capital and maintain its line of credit. Plaintiffs allege that Defendant Whitford had a motive to delay the charges to improve his prospects for a bonus based on Wet Seal’s earnings per share. But Whit-ford argues persuasively that because he did not receive a bonus for FY 2003 ending January 31, 2004, knowingly deferring a needed impairment charge beyond that date would have virtually ensured that he would also not receive a bonus for FY 2004, so he would have in fact been motivated to take it earlier. Thus, because Plaintiffs have not alleged facts that would square their motive theory with economic reality, they do not adequately allege fraudulent intent as to Whitford. E.g., Kalnit v. Eichler, 264 F.3d 131, 140-41 (2d Cir.2001). iii. The Most Reasonable Inference Derived from Defendants’ Statements Is Cautious Optimism, Not Fraud The defects in Plaintiffs’ pleadings set forth above mean that the most reasonable inference from the record is that Defendants simply delayed taking the charge hoping that the 2004 back-to-school line would succeed and thereby reverse Wet Seal’s declining fortunes. Several facts bolster this inference. First, given that the 2004 back-to-school line was released on July 12, 2004 and Wet Seal’s SEC disclosures indicate that the impairment existed as of July 31, 2004 (Doyle Deck, Ex. C at 8), a reasonable inference exists that no impairment was believed to exist at Wet Seal prior to preparation of the quarterly financials for the period ending July 31, 2004, and that when Defendants had time to analyze the early disappointing results of the back-to-school season, the write-downs were quickly taken (on August 19, 2004). In other words, Plaintiffs simply waited until the back-to-school line hit stores, but when it did not catch fire, Plaintiffs acknowledged the reality that Wet Seal would not recover. Notably, Plaintiffs do not foreclose this inference by alleging that, had the back-to-school line been successful, the impairment charge would still have been needed. In addition, this is not a case where Defendants used fraudulent accounting to portray a failing company as a profitable one. Even accepting Plaintiffs’ allegations as true, Defendants accurately portrayed Wet Seal as what it was — a struggling company seeking to turn itself around in a very competitive market. This also cuts against scienter and in favor of optimism. See PR Diamonds, Inc. v. Chandler, 364 F.3d 671, 686 (6th Cir.2004). Finally, Wet Seal’s financial statements — except for IQ 2004 — were certified by Deloitte, Wet Seal’s independent auditors. (2003 Form 10K at F-2 (Ex. 2).) Deloitte allowed Wet Seal to use its report prepared for the 2003 Form 10K even after the impairment was announced on August 19, 2004. (Ex. 23.2 to Wet Seal’s Amendment No. 1 to Registration Statement on Form S-3 (Ex. 29).) Although a clean audit opinion does not rule out a finding of scienter, “a clean audit may be considered in determining whether there is scienter.” In re Ramp Networks, Inc. Secs., 201 F.Supp.2d 1051, 1074 n. 6 (N.D.Cal.2002) (“Ramp ”). Therefore, the Court finds that the Deloitte approval weighs against scienter as well. For all of these reasons, the words of another court ring particularly true here: Plaintiffs have provided insufficient factual allegations to support both the extent of knowledge and the inference that the failure to recognize the alleged problems was attributable to fraud, rather than a lack of caution, a lack of solid information, a belief that it was part of the company’s grand expansion plans, or a momentary surplus of hubris.... Thus, Plaintiffs’ allegations do not comprise the kind of ‘strong circumstantial evidence’ needed to establish that Defendants made false or misleading statements either intentionally or with deliberate recklessness. ICN, 299 F.Supp.2d at 1065 (citing Guess?, 174 F.Supp.2d at 1078) In short, even if Plaintiffs had adequately alleged a violation of GAAP, their failure adequately to plead facts giving rise to a strong inference of scienter for GAAP violations — and in fact the dearth of information on how Wet Seal’s accounting decisions were made defeats Plaintiffs’ Section 10(b) claim on this basis. 2. Plaintiffs Fail Adequately to Allege Any Other Misleading Statements By Deckop, Haims, Whitford, and Wet Seal In addition to falsity in the form of GAAP violations, Plaintiffs contend Defendants Deckop, Haims, and Whitford (and hence Wet Seal) made a variety of other actionable misrepresentations in their comments to the market, each of which essentially involve optimistic statements about Wet Seal’s turnaround plan and the 2004 back-to-school line. However, many of the purported misrepresentations are inactionable because they amount merely to corporate puffery and fall within PSLRA’s safe harbor provision barring any claims based on forward-looking statements that are accompanied by meaningful cautionary language. Moreover, as discussed below, even where the alleged statements could constitute actionable statements of fact, Plaintiffs fail to specify any information known to particular corporate officers that was inconsistent with any of the statements attributed to them, and it is unreasonable to infer that the officers acted with fraudulent intent simply because they knew the 2004 back-to-school line was important generally to Wet Seal. Therefore, as with the GAAP allegations, Plaintiffs’ claims in this area fail for lack of an actionable misrepresentation as to many of the statements, and for lack of scienter as to all of them. a. Many of the Statements to Which Plaintiffs Refer Are Inactionable The allegedly misleading statements include: 1. Wet Seal on November 20, 2003 issued a press release quoting Whitford as saying, “We are pleased with the continuation of the month-over-month improvement in our sales trends, and are particularly encouraged by the progress we are making in building back to a positive transaction count....” (FACC ¶ 44(a).) 2. Whitford on November 20, 2003 stated that “I am personally very excited about the fashion [Alfaro] has developed ... and am looking forward to showing you the new assortment in the stores next year.” (FACC ¶ 44(b).) 3. Whitford on December 4, 2003 stated that Wet Seal stores were “continuing to gain ground ... putting us on track to meet our sales estimates for December” and emphasizing the “[w]e look forward to finishing out the year by building on the progress we have made thus far and establishing a strong foundation for a more promising year ahead.” (FACC ¶ 44(c).) 4. Whitford on January 8, 2004 assured investors that “the actions ... during the period position us well for the new year,” and added that “[w]e look forward to introducing some promising new merchandising strategies — the full effects of which are expected to materialize in our back-to-school and fall lines.” (FACC ¶ 44(d).) 5. Whitford also assured investors that Wet Seal was “on track to deliver improved financial performance in the fall, in line with our turnaround plan,” adding that “[w]e are beginning to see early signs of improvement in the Wet Seal division.” (FACC ¶¶ 4, 44(e).) 6. Deckop stated on March 18, 2004 that “we are seeing early signs of improvement in both divisions, but in particular for the Wet Seal division.” (FACC ¶ 44(f).) 7. Haims stated in a March 18, 2004 conference call that “[t]he early spring merchandise has performed in line with our expectations, and we are now refreshing the stores with a wider assortment____ [New executives who were announced in January 2004] are working closely with their new in-house design team headed by our Creative Director Victor Alfaro. They are extremely pleased with the energy Victor has brought to the Company and believe he [sic] will be excited as well when you see his collection in the back-to-school period. I know many of you have expressed an interest in previewing this collection, and we are currently working on plans to do that.” (FACC ¶ 44(f); 3/18/04 Conference Call Tr. at 6 (Ex. 24).) 8. Whitford indicated on May 6, 2004 that “the merchandise designs that I have seen are fresh, are relevant and are unique to Wet Seal.... ” (FACC ¶ 44(g).) 9. Whitford stated on May 20, 2004 that “[consistent with our turnaround plan, we are not anticipating a significant change in momentum in our business until the third quarter, when we expect to see the full benefits of our new merchandise assortment and all of our planned marketing initiatives.” (FACC ¶ 44(h).) 10. Haims was quoted in a July 7, 2004 newspaper article as stating that an “early positive reaction” to the new back-to-school line had him “highly confident” about the upcoming back-to-school season. (FACC ¶44(Z).) 11. Whitford stated on July 8, 2004 that “[w]e remain confident that the new assortment is a significant improvement on our prior fashion and will deliver a better operating performance in the second half of the year.” (FACC ¶ 44(m).) 12. Haims stated in an August 9, 2004 press release that “[w]e believe that our new fall merchandise is both fashion-forward and unique and is receiving positive feedback from our customers. We will continue to be aggressive in our promotional activity in order to meet the challenge of bringing her back to our stores.” (FACC ¶ 44(n).) As discussed below, the statements above are not actionable both because they amount to mere corporate puffery, and also because (with one exception) they were accompanied by significant cautionary language. i. Men Corporate Puffery Statements are not actionable if they “are vague and constitute run-of-the-mill corporate optimism on which no reasonable investor would rely.” Copper Mountain, 311 F.Supp.2d at 869. Predictions and forecasts which are not of the type subject to objective verification are rarely actionable under § 10(b) and Rule 10b-5____An inability to foresee the future does not constitute fraud, because the securities law approaches] matters from an ex ante perspective. Id. at 868 (citation and quotation marks omitted) (emphasis added). The same rule applies to statements that “lack[ ] a standard against which a reasonable" investor could expect them to be pegged.” In re Splash Tech. Holdings Secs. Litig., 160 F.Supp.2d 1059, 1077 (N.D.Cal.2001) (“Splash”) (citations omitted). “Interpretation of the ‘mere puffery’ rule has disting