Full opinion text
OPINION SWEET, District Judge. Defendants Donaldson, Lufkin & Jen-rette Securities Corporation (“DLJ”), Elizabeth Comerford (“Comerford”), Bear, Stearns & Co. Inc., Bear, Stearns Capital Markets Inc. (collectively, “Bear Stearns”), Howard Rubin (“Rubin”), and Merrill Lynch, Pierce, Fenner & Smith Inc. (“Merrill Lynch”) (together with DLJ, Comerford, Bear Stearns, and Rubin, the “Brokers”) have moved for partial dismissal of the Second Amended Complaint (“Complaint”) in this action pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Procedure for failure to state a claim upon which relief can be granted and for failure to plead fraud with particularity. Specifically, the Brokers move to dismiss the following claims: (1) breach of contract (Count III); (2) common law fraud (Counts IV and V); (3) violations of the Sherman and Donnelly Acts (Counts VI and VII); and (7) tortious interference with contracts (Counts XI and XII). The Brokers have also moved to dismiss Counts XIII through XXI of the Second Amended Complaint, which have been reasserted merely for the purposes of plaintiffs’ contemplated appeal. Plaintiffs have agreed, both in their papers and in correspondence to the Court, (see Letter from Seiler to Judge Sweet of 10/16/98, at 2), that these counts are deficient under the logic of Granite Partners, L.P. v. Bear, Stearns & Co., 17 F.Supp.2d 275 (S.D.N.Y. 1998) (“Granite II”), and that they should therefore be summarily dismissed. For the reasons set forth below, the Brokers’ motions will be granted in part and denied in part. Parties Plaintiff Granite Partners, L.P. (“Granite Partners”), a Delaware limited partnership, was established in January 1990 as an investment fund to invest primarily in mortgage-related securities on behalf of individuals and entities subject to United States taxation. Plaintiff Granite Corporation (“Granite Corp.”), a Cayman Islands corporation, was organized in January 1990 to invest primarily in mortgage-related securities on behalf of offshore investors and domestic tax-exempt entities, including foundations and pension funds. Plaintiff Quartz Hedge Fund (“Quartz”) (collectively with Granite Partners and Granite Corp., the “Funds”), a Cayman Islands corporation, was established in January 1994 as a vehicle to invest primarily in mortgage-related securities on behalf of offshore investors and others exempt from United States taxation. The Funds bring this action by and through the Litigation Advisory Board (the “LAB”), which was given the exclusive authority on behalf of and in the name of the Funds’ estates to commence, prosecute, settle, or otherwise resolve all unresolved claims and causes of action of the Funds’ estates by order of the United States Bankruptcy Court for the Southern District of New York. DLJ, Bear Stearns, and Merrill Lynch, all Delaware corporations with their principal places of business in New York City, are broker-dealers that transacted business with the Funds. Comerford, a resident of New York, was at all relevant times a senior vice president of DLJ. Rubin, a resident of New Jersey, was at all relevant times a senior managing director and the head CMO trader at Bear Stearns. Relevant Nonparties David J. Askin (“Askin”) is a resident of New Jersey. At all times relevant to this action, non-party Askin Capital Management, L.P. (“ACM”), a Delaware limited partnership, was a registered investment advisor, whose principal place of business was New York City. ACM was formed in January 1993 by Askin. Askin also served as ACM’s president, chief executive officer, and chief financial officer. ACM became the investment advisor to both Granite Corp. and Granite Partners (and Granite Partners’ sole general partner) on or about January 26, 1993. ACM has been the investment advisor to Quartz since its formation. Prior Proceedings The facts and prior proceedings in this action are set forth in prior opinions of this Court, familiarity with which is assumed. See Granite II, 17 F.Supp.2d at 275; Granite Partners v. Bear, Stearns & Co., 184 F.R.D. 49 (S.D.N.Y.1999). On April 7, 1994, the Funds filed petitions for relief under chapter 11 of the United States Bankruptcy Code. The chapter 11 trustee for the Funds (the “Trustee”) initially filed this action in the United States Bankruptcy Court for the Southern District of New York on September 12, 1996. The case was referred to this Court on October 18, 1996. On consent, this Court withdrew the reference from the Bankruptcy Court on December 3, 1996. On January 27, 1997, the Trustee submitted a Third Amended Joint Plan of Liquidation for the Funds (the “Plan”). Following the Bankruptcy Court’s confirmation of the chapter 11 Plan on March 2, 1997, this action has been pursued by the LAB, appointed pursuant to the Liquidation Plan. The LAB filed its First Amended Complaint in this action on August 4, 1997, naming, in addition to Bear Stearns, Rubin, DLJ, Comerford, and Merrill Lynch as defendants. In its First Amended Complaint, the LAB asserted the following claims: breach of contract, inducing and participating in breach of fiduciary duty, tortious interference with contracts, rescission of unauthorized trades, breach of duty, conversion, federal and state antitrust violations, pri-ma facie tort, common law fraud, negligent and innocent misrepresentation, breach of express warranty, unjust enrichment, objection to claims and interest, and equitable subordination. On August 25, 1998, the lion’s share of the LAB’s claims were dismissed in Granite II, 17 F.Supp.2d at 275. That decision granted the LAB leave to replead. On October 16, 1998, the LAB filed the Complaint that is the subject of the Brokers’ current motions to dismiss. Oral argument was heard on the instant motions on April 29, 1999, at which time the motions were deemed fully submitted. Additional materials were received from the parties through June 2,1999. Facts In considering a motion to dismiss, the facts alleged in the complaint are presumed to be true and all factual inferences must be drawn in the plaintiffs favor. See Mills v. Polar Molecular Corp., 12 F.3d 1170, 1174 (2d Cir.1993); Cosmas v. Hassett, 886 F.2d 8,11 (2d Cir.1989); Dwyer v. Regan, 777 F.2d 825, 828-29 (2d Cir.1985), modified by, 793 F.2d 457 (2d Cir.1986). Accordingly, the factual allegations considered here and set forth below are taken primarily from the LAB’s Complaint and do not constitute findings of fact by the Court. They are presumed to be true only for the purpose of deciding the present motions. Though the LAB’s Complaint differs in significant respects from its First Amended Complaint, the basic facts remain the same. As was explained in more detail in Granite II, this case arises out of the collapse in early 1994 of the Funds that were managed by Askin and ACM. The Funds invested primarily in collateralized mortgage obligations (“CMOs”) created by the Brokers and other broker-dealers. As the Complaint states, “CMOs are securities created from and collateralized by mortgage-backed securities formed from pools of residential mortgages or securities backed by such mortgages.” Compl. ¶ 26. ACM, through its president, Askin, purchased the securities for the Funds. The advisory and fiduciary relationships between ACM, or its predecessors, and the Funds were governed by investment advisory agreements. Because CMOs of the type purchased by the Funds vary in their sensitivity to interest rate fluctuations, and the Funds themselves had distinct investment strategies, ACM’s selection of the Funds’ securities was critical. Askin and ACM, the Funds’ investment advisor, had fiduciary and contractual obligations to the Funds to make investments with due care and in accordance with the Funds’ stated investment objectives. As-kin and ACM, however, did not fulfil those obligations, and repeatedly breached their fiduciary and contractual duties. As a result, the Funds acquired portfolios that were full of bullish CMOs, esoteric and highly “toxic” CMOs, and otherwise inappropriate securities. When short-term interest rates rose in early 1994, these securities radically eroded in value. The Complaint alleges that the Brokers took advantage of ACM and Askin’s shortcomings by recommending and selling to the Funds inappropriate and, at times, highly toxic CMOs. The Complaint also alleges that the Brokers deliberately supplied ACM and the Funds with erroneous “marks” purportedly representing the Brokers’ own valuations of the Funds holdings — a claim not explicitly made in the First Amended Complaint — despite contracts between the Funds and the Brokers requiring the provision of accurate and timely Broker marks. In their sales of securities to the Funds, the Brokers recouped significant profits — in part due to the Brokers’ charging of excessive markups. The LAB’s claims concerning the Brokers’ charging of excessive markups were also not explicitly made in the First Amended Complaint. The Funds obtained the majority of their CMOs pursuant to “repos,” a financing mechanism that allowed the Funds to pay only a fraction of the cost of each CMO in cash, borrowing the balance from the Brokers. After the Funds’ value began to erode in early 1994, the Funds’ holdings were liquidated pursuant to Pub-lie Securities Association Master Repurchase Agreements (“PSA Agreements”) between the Funds and the Brokers. Under these agreements, the Brokers were allowed to make margin calls on the Funds if the value of the securities held on “repo” fell below the amount that the Funds had borrowed, plus an agreed-upon “haircut.” Unable to meet margin calls issued by the Brokers, the Funds’ portfolios were liquidated. The Complaint alleges that the Brokers once again took advantage of the Funds during these liquidations. In particular, the Brokers are alleged to have liquidated the Funds’ holdings by “deeming” sales of the Funds’ securities to themselves at unreasonable, below-market prices. The Brokers allegedly colluded with each other to exchange sham bids, thus facilitating this bad-faith liquidation. Having obtained the Funds’ securities at artificially low prices, the Brokers then proceeded to sell those same securities on the open market — recovering profits far in excess of those they would have obtained had they liquidated the Fpnds’ portfolios in a non-collusive manner. The Brokers have moved to dismiss several repleaded claims that were present in the First Amended Complaint, as well as a few that were not. The Complaint realleg-es antitrust claims under the Sherman and Donnelly Acts that were dismissed in Ch-amte II (Counts VI and VII). The Complaint also includes claims of common law fraud (Count IV) and breach of contract (Count III), not present in the LAB’s First Amended Complaint, based upon the Brokers’ provision of erroneous marks, as well as a common law fraud claim premised upon the Brokers’ failures to disclose the excessive markups they charged 'the Funds for securities (Count V). Finally, the Complaint realleges claims for tortious interference with contracts similar to those that were dismissed in Granite II (Counts XI and XII). The Brokers have moved to dismiss these claims, but not several others that are not the subject of the instant opinion. Discussion I. Legal Standards A. Rule 12(b)(6) In deciding the merits of a motion to dismiss for failure to state a claim, all material allegations composing the factual predicate of the action are taken as true, for the court’s task is to “ ‘assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof.’ ” Ryder Energy Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2d Cir.1984) (quoting Geisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir.1980)). Thus, where it is beyond doubt that plaintiff can prove no set of facts in support of his or her claim that would warrant relief, a motion to dismiss must be granted. See H.J. Inc. v. Northwestern Bell Tel. Co., 492 U.S. 229, 249-50, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989); Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Additionally, on a Rule 12(b)(6) motion, consideration is limited to the factual allegations in the complaint, “to documents attached to the complaint as an exhibit or incorporated in it by reference, to matters of which judicial notice may be taken, or to documents either in plaintifff’s] possession or of which plaintiff[ ] had knowledge and relied on in bringing suit.” Brass v. American Film Techs., Inc., 987 F.2d 142, 150 (2d Cir.1993) (citing Cortee Indus., Ina v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir.1991)); Bissell v. Merrill Lynch & Co., 937 F.Supp. 237, 239 (S.D.N.Y. 1996), aff'd, 157 F.3d 138 (2d Cir.1998), cert. denied, —■ U.S.-, 119 S.Ct. 1039, 143 L.Ed.2d 47 (1999). The parties have submitted numerous exhibits, including deposition transcripts, that could not appropriately be considered on a motion to dismiss. Despite the voluminous nature of these exhibits, and the alacrity with which the parties have interwoven quarrels based upon these materials with contentions based upon the LAB’s actual pleadings, these exhibits have been ignored. However, certain documents not attached to the Complaint or explicitly incorporated by reference have been consulted where appropriate under the above standard. B. Rule 9(b) Federal Rules of Civil Procedure 9(b) requires that in all allegations of fraud, the circumstances constituting the fraud must be stated with particularity. See Shields v. Citytrust Bancorp, Inc., 25 F.3d 1124, 1127 (2d Cir.1994); In re Time Warner, Inc. Sec. Litig., 9 F.3d 259, 265 (2d Cir.1993); Shemtob v. Shearson, Hammill & Co., 448 F.2d 442, 445 (2d Cir.1971). Allegations of fraud must adequately specify the statements made that were false or misleading, give particulars as to the respect in which it is contended that the statements were fraudulent, and state the time and place the statements were made and the identity of the person who made them. See McLaughlin v. Anderson, 962 F.2d 187, 191 (2d Cir.1992); Cosmas, 886 F.2d at 11. II. The LAB Has Not Adequately Pleaded Violations of the Sherman and Donnelly Acts (Counts VI and VII) The LAB has brought suit against Bear Stearns, Rubin, DLJ, and Merrill Lynch pursuant to section 4 of the Clayton Act, which provides: [A]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue ... and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee. 15 U.S.C. § 15(a) (1997). According to the LAB, the Brokers committed underlying violations of section 1 of the Sherman Act, 15 U.S.C. § 1 (1997), by engaging in a conspiracy to exchange “lowball,” accommodation bids- during the initial liquidation of the Funds’ holdings. These bids were then used by the Brokers to justify deeming sales of those holdings to themselves at below-market prices. The LAB alleges that by agreeing to forestall a competitive auction the Brokers engaged in a conspiracy in violation of the Sherman Act. .The LAB also asserts that the Brokers’ collusive bidding scheme was illegal under New York’s Donnelly Act, N.Y. Gen. Bus. Law § 340 (McKinney’s 1996). Section 1 of the Sherman -Act reads, in relevant part: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony.... 15 U.S.C. § 1. While the Sherman Act, by its terms, prohibits any agreement or combination “in restraint of trade or commerce,” id., it has long been recognized that the Act was only intended to outlaw unreasonable restraints. See Bogan v. Hodgkins, 166 F.3d 509, 513 (2d Cir.1999) (“[T]he Supreme Court has read the Act to forbid only ‘unreasonable’ restraints, as a literal reading would absurdly bar all contracts. In particular not all cooperative conduct has a deleterious effect on competition; indeed, some cooperative arrangements foster rather than harm competition.”) (citations omitted). As a result, most antitrust claims are evaluated under a “rule of reason,” according to which “the finder of fact must decide whether the questioned practice imposes an unreasonable restraint on competition, taking into account a variety of factors, including specific information about the relevant business, its conditions before and after the restraint was imposed, and the restraint’s history, nature, and effect.” State Oil Co. v. Khan, 522 U.S. 3, 118 S.Ct. 275, 279, 139 L.Ed.2d 199 (1997); see Bogan, 166 F.3d at 513 n. 4. To allege unreasonable restraint of trade, something more than a private dispute must be alleged. The relevant product market must be identified, and the plaintiff must ‘“allege how the net economic effect of the alleged violation is to restrain trade in the relevant market, and that no reasonable alternate source is available’ to consumers in that market.” International Television Productions Ltd. v. Twentieth Century-Fox Television, 622 F.Supp. 1532, 1534 (S.D.N.Y.1985) (quoting Gianna Enters, v. Miss World (Jersey) Ltd., 551 F.Supp. 1348,1355 (S.D.N.Y. 1982)); see North Jersey Secretarial School, Inc. v. McKiernan, 713 F.Supp. 577, 583 (S.D.N.Y.1989). The economic impact in the relevant market must be specified, and the plaintiff must show that “the alleged restraint on trade tends or is reasonably calculated to prejudice the public interest.” Larry R. George Sales Co. v. Cool Attic Corp., 587 F.2d 266, 273 (5th Cir.1979). However, because certain types of restraints have both a predictable and pernicious effect -on competition, they are deemed unlawful per se. In the motions considered in Granite II, the Broker defendants maintained that the LAB had only alleged injury to the Funds themselves, not injury to the relevant market, and that this failure to plead restraint of trade required dismissal of the LAB’s antitrust claims. By contrast, the LAB sought to neutralize the inadequacy of its pleadings by urging that the Brokers’ alleged bid-rigging conspiracy be considered a per se violation of the antitrust laws. More specifically, the LAB suggested that because a horizontal bid-rigging scheme had been alleged, it was entitled to per se treatment and the LAB need not meet the demands of rule-of-reason analysis. As was explained in Granite II, however, because of the novel and complex nature of the market and instruments at issue in this case, the collusion alleged by the LAB did not constitute a per se violation of the Sherman Act. See 17 F.Supp.2d at 297. In its papers, the LAB has once again attempted to navigate a shortcut around rule-of-reason analysis, pressing that the so-called “quick look” rule of reason should be applied to its antitrust claims. The LAB’s entreaties notwithstanding, “quick look” rule-of-reason analysis would not be appropriate in this case. Abbreviated rule-of-reason analysis, as the Supreme Court has recently had occasion to observe, is only appropriate where “the great likelihood of anticompetitive effects can easily be ascertained,” and “an observer with even a rudimentary understanding of economics could conclude that the arrangements in question would have an anticompetitive effect on customers and markets.” California Dental Assoc. v. FTC, — U.S.-, 119 S.Ct. 1604, 1612-13, 143 L.Ed.2d 935 (1999). It was emphatically the holding of Granite II that the anticompetitive impact of the Brokers’ alleged bidding conspiracy was neither obvious nor easily ascertainable, and that therefore the LAB could not maintain its antitrust claims against the Brokers merely by alleging per se violations of the Sherman Act. As California Dental indicates, “quick look” rule-of-reason analysis is inappropriate for similar reasons. See id. The LAB’s request that the Court merely engage in yet another form of truncated antitrust analysis is thus meritless. To withstand a motion to dismiss, a plaintiff making a Sherman Act conspiracy claim must allege a concerted action by two or more persons that unreasonably restrains interstate or foreign trade or commerce. See In re Nasdaq Market-Makers Antitrust Litig., 894 F.Supp. 703, 710 (S.D.N.Y.1995); Three Crown Ltd. Partnership v. Caxton Corp., 817 F.Supp. 1033, 1047 (S.D.N.Y.1993); Broadcast Music, Inc. v. Hearst/ABC Viacom Entertainment Servs., 746 F.Supp. 320, 325 (S.D.N.Y.1990); accord International Distrib. Ctrs., Inc. v. Walsh Trucking Co., 812 F.2d 786, 793 (2d Cir.1987). The plaintiff “must do more than merely allege that a conspiracy exists, it must provide some factual basis for that allegation.” Fort Wayne Telsat v. Entertainment & Sports Programming Network, 753 F.Supp. 109, 115 (S.D.N.Y.1990); see Garshman v. Universal Resources Holding Inc., 824 F.2d 223, 230 (3d Cir.1987); Heart Disease Research Found, v. General Motors Corp., 463 F.2d 98, 100 (2d Cir.1972). For. example, the plaintiff must identify the relevant product market, the co-conspirators, and describe the nature and effects of the alleged conspiracy. See In re Nasdaq, 894 F.Supp. at 710-11; International Television Productions, 622 F.Supp. at 1537. While dismissal prior to giving a plaintiff ample opportunity for discovery should be granted sparingly in antitrust cases, see Hospital Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 746, 96 S.Ct. 1848, 48 L.Ed.2d 338 (1976), “ ‘[i]t is not ... proper to assume that the [plaintiff] can prove facts that it has not alleged or that the defendants have violated the antitrust laws in ways that have not been alleged.’ ” George Haug Co. v. Rolls Royce Motor Cars Inc., 148 F.3d 136, 139 (2d Cir.1998) (quoting Associated Gen. Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526, 103 . S.Ct. 897, 74 L.Ed.2d 723 (1983)). As the Second Circuit has held, establishing an unreasonable restraint of trade under the rule of reason involves three basic steps: “[P]laintiff bears the initial burden of showing that the challenged action has had an actual adverse effect on competition as a whole in the relevant market. ...” Capital Imaging Assocs. P.C. v. Mohawk Valley Medical Assocs., 996 F.2d 537, 543 (2d Cir.), cert, denied, 510 U.S. 947, 114 S.Ct. 388, 126 L.Ed.2d 337 (1993). If the plaintiff succeeds, the burden shifts to the defendant to establish the “pro-competitive ‘redeeming virtues’ ” of the action. Id. Should the defendant carry this burden, the plaintiff must then show that the same pro-competitive effect could be achieved through an alternate means that is less restrictive of competition. Id.; Bhan v. NME Hasps., Inc., 929 F.2d 1404, 1413 (9th Cir.), cert, denied, 502 U.S. 994, 112 S.Ct. 617,116 L.Ed.2d 639 (1991). K.M.B. Warehouse Distribs., Inc. v. Walker Mfg. Co., 61 F.3d 123, 127 (2d Cir.1995). To meet its initial burden a plaintiff bringing suit under the Sherman Act must “show more than just that he was harmed by defendants’ conduct.” Id. Rather, a plaintiff must show that the alleged restraint of trade had an actual adverse effect on competition as a whole-in the relevant market. See id.; see also Jefferson Parish Dist. No. 2 v. Hyde, 466 U.S. 2, 31, 104 S.Ct. 1551, 80 L.Ed.2d 2 (1984) (“Without a showing of actual adverse effect on ■competition, respondent cannot make out a case under the antitrust laws....”). This is so because the ultimate aim of the Sherman Act is to protect competition, as opposed to competitors. See Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962). As another Second Circuit decision, Capital Imaging Assocs., P.C. v. Mohawk Valley Med. Assocs., Inc., 996 F.2d 537 (2d Cir. 1993), has explained: Under [the rule of reason test] ... plaintiff bears the initial burden of showing that the challenged action has had an actual adverse effect on competition as a whole in the relevant market; to prove it has been harmed as an individual competitor will not suffice. Insisting on proof of harm to the whole market fulfills the broad purpose of the antitrust law that was enacted to ensure competition in general, not narrowly focused to protect individual competitors. Id. at 543. Additionally, it is' well-settled that “[a] private plaintiff may not recover damages under § 4 of the Clayton Act merely by showing ‘injury causally linked to an illegal presence in the market.’ ” Atlantic Richfield Co. [ARCO], v. USA Petroleum Co., 495 U.S. 328, 334, 110 S.Ct. 1884, 109 L.Ed.2d 333 (1990) (quoting Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977)). Rather, a private plaintiff must demonstrate the existence of “antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.” Brunswick, 429 U.S. at 489, 97 S.Ct. 690; see George Haug, 148 F.3d at 139 (“The antitrust injury requirement obligates a plaintiff to demonstrate, as a threshold matter, ‘that the challenged action has had an actual adverse effect on competition as a whole in the relevant market; to prove it has been harmed as an individual competitor will not suffice.’ ”) (quoting Capital Imaging, 996 F.2d at 543); Florida Seed Co. v. Monsanto Co., 105 F.3d 1372, 1375 (11th Cir.) (“In many instances, those displaced by a merger suffer an economic loss. However, this loss is not an antitrust injury because it does not flow from that which makes a merger unlawful. Injuries like that suffered by Florida Seed do not ‘coincide[ ] with the public detriment tending to result from the alleged violation.’ ”) 0quoting Todorov v. DCH Healthcare Auth., 921 F.2d 1438,1450 (11th Cir.1991)), cert, denied, — U.S.-, 118 S.Ct. 296, 139 L.Ed.2d 228 (1997). Even injuries with a causal connection to antitrust violations will not qualify as “antitrust injuries” unless they are “attributable to an anti-competitive aspect of the practice under scrutiny.” ARCO, 495 U.S. at 384, 110 S.Ct. 1884; see generally 2 Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 362a, at 209-16 (rev. ed.1995) (discussing antitrust injury requirements). As the ARCO Court noted, this antitrust injury requirement is conceptually distinct from the demands of the rule of reason or per se rule utilized by courts to determine whether a Sherman Act violation has occurred in the first instance: The per se rule is a method of determining whether § 1 of the Sherman Act has been violated, but it does not indicate whether a private plaintiff has suffered antitrust injury and thus whether he may recover damages under § 4 of the . Clayton Act. Per se and rule-of-reason analysis are but two methods of determining whether a restraint is “unreasonable,” i.e., whether its anticompetitive effects outweigh its procompetitive effects. The purpose of the antitrust injury requirement is different. It ensures that the harm claimed by the plaintiff corresponds to the rationale for finding a violation of the antitrust laws in the first place, and it prevents losses that stem from competition from supporting suits by private plaintiffs for either damages or equitable relief. 495 U.S. at 342,110 S.Ct. 1884. While the LAB’s Complaint contains allegations concerning market impact that were conspicuously absent from the First Amended Complaint, it fails to plead adequately the anti-competitive effect that is a necessary predicate to all antitrust violations. Moreover, even construing its allegations in favor the LAB, the Complaint fails to allege antitrust, as opposed to individual, injury—as is required in order to bring suit as a private attorney general under the Clayton Act. The gravamen of the LAB’s Sherman Act claim is that the Brokers engaged in a collusive scheme to offer each other “low-ball” bids, thus affording the Brokers the opportunity to liquidate the Funds’ holdings by “deeming” various sales to themselves at artificially low prices. According to the LAB, because these deemed sales were at a price significantly below the actual value of the Funds’ liquidated holdings, the Brokers were able to recover significant profits when they later resold those same securities in the secondary market. Had the initial liquidations occurred at market prices, the LAB contends, the Brokers would not have been able to recover those profits. Manifold market injuries have now been alleged in the Complaint. The LAB asserts that, “having colluded to obtain the Funds’ securities at below-market prices, on information and belief, the secondary traders employed by the Brokers were instructed to sell the securities as quickly as possible, so long as they realized, on a hedge adjusted basis, as least as much as they paid for them in the deemed sales.” Compl. ¶ 208. The LAB contends that, presented with the task of selling an unusually large volume of securities, DLJ and the other Brokers entered into massive hedging transactions calculated to provide protection against losses due to interest rate movements — provided that the Brokers sold'their positions quickly. See Compl. ¶¶ 208, 215. The end result of this massive liquidation, the LAB claims, was damage to the markets for esoteric CMOs — namely inverse IOs, inverse floaters, and super POs — as the flooding of the market crowded out market participants with long positions in those types of instruments, depressed prices below the instruments’ “intrinsic ‘recreation value,’ ” and resulted in the marking down of the securities held by other market participants. Compl. ¶¶ 209-11. As a result, so claims the LAB, margin calls were issued on other market participants and increased “haircuts” were demanded with respect to comparable instruments. See Compl. ¶ 212. According to the Complaint, the increased costs of capital resulting from the massive CMO sell-off also reduced the ability of highly leveraged firms to participate in the markets for inverse IOs, inverse floaters, and super POs. See Compl. ¶ 212. The short-term hedging strategy employed by the Brokers, which involved short sales of large amounts of United States Treasury and other governmental agency securities, also allegedly impacted interest rates and influenced the price of Treasury notes. See Compl. ¶ 217. To illustrate its claims of tangible market impact, the LAB refers periodically in its 'Complaint to specific funds and market participants that it believes were injured during the market stampede of 1994. See Compl. ¶¶ 209, 212-13. The LAB’s essential claim of injury derives from the liquidation of the Funds’ own holdings through deemed sales. Even assuming that those deemed sales were the result of a rigged bidding process, and that the Funds therefore recovered less in return than was their due, however, the LAB has not satisfactorily alleged that these sales had any impact whatsoever on the relevant market for CMOs. Rather, as the Complaint indicates, it is the later resale of the instruments by the Brokers that is claimed to have caused market damage. It is the subsequent hedging by the Brokers, in order to protect themselves from falling CMO values, and that hedging’s attendant impact on the market for Treasury notes, that is claimed to have damaged the market. Indeed, it is the second “liquidation” by the Brokers, not the initial liquidation in which the Funds’ holdings were deemed sold to the Brokers, that is alleged to have caused market injury. There is a critical disjunction, however, between the market injury asserted, the injury allegedly suffered by the Funds, and the Brokers’ alleged anticompetitive conspiracy. According to the LAB, the Brokers were able to recoup greater profits by deeming sales to themselves at artificially low prices and then reselling the CMOs on the open market. If true, this would no doubt be of great consternation to the Funds and to their various investors. However, despite the LAB’s transparent attempts to conflate the Brokers’ deemed sales and subsequent resales, nothing in the Complaint indicates that the subsequent resale by the Brokers was anything other than normal, given the state of the market, or that the collusive bidding arrangement among the Brokers did anything to impact the market in which the securities were resold. Even assuming that the Brokers intended to provide each other with lowball bids for the nefarious purposes stated in the Complaint, the LAB has failed to adequately allege any adverse effect on competition within the relevant market for CMOs. See K.M.B. Warehouse Dist., 61 F.3d at 130 (“Without some evidence of an adverse impact on competition in either the interbrand or intrabrand market, the fact that customers induce a seller to refrain from dealing with another potential customer in order to limit competition does not satisfy a plaintiffs initial burden under § 1. KMB’s evidence of defendants’ intent, even belief that what they were doing might be unlawful, is unavailing in the absence of evidence of anti-competitive effect.”) (citations omitted); Capital Imaging Assocs., 996 F.2d at 547 (“In sum, Capital’s position is simply that it has been harmed as an individual competitor. It has not shown that defendants’ activities have had any adverse impact on price, quality, or output of medical services offered to consumers in the relevant market.”); Sitkin Smelting & Ref. Co. v. FMC Corp., 575 F.2d 440, 448 (3d Cir.1978) (finding that collusive scheme involving sham bids, even if reprehensible, did not constitute antitrust violation, as plaintiffs failed to maintain “their burden to show that the combination in any substantial way either did or could affect interstate commerce by controlling market prices, imposing undue limitations on competitive conditions, or unreasonably restricting competitive opportunity.”); Jarmatt Truck Leasing Corp. v. Brooklyn Pie Co., Inc., 525 F.Supp. 749, 750 (E.D.N.Y.1981) (“No violation of section 1 of the Sherman Act is possible absent proof of anticompetitive effect beyond the injury to plaintiffs, and facts must be pleaded from which effect can be inferred.”). At most, the Complaint establishes that the Brokers were able to post significant gains where they may otherwise have suffered losses when reselling the CMOs. However, the Complaint also indicates that the Brokers had an inherent interest in quickly liquidating the instruments with which they had become saddled. The LAB’s implicit assumption that the Brokers would have held onto the liquidated instruments for a longer period of time, were they unable to quickly dispose of them at a profit, is unrealistic and unconvincing. After all, according to the LAB’s own pleadings the CMOs obtained from the Funds were highly volatile, even “toxic,” and the market for those CMOs was declining in the face of interest rate increases. Consequently, there is nothing in the Complaint that suggests that the resale of the CMOs was anything other than ordinary, given the market into which those CMOs were being dumped and the Brokers’ interest in relieving themselves as quickly as possible from the risks inherent in holding large quantities of quickly devaluing securities. While the markets were flooded with mortgage instruments at “fire sale” prices, see Compl. ¶ 210, by no means does this alone indicate that the Brokers’ collusive conduct was the cause. Moreover, while the short-term hedging strategy employed by the Brokers may well have been less profitable had the Brokers not initially obtained the Funds’ securities at artificially low prices, there is no indication that this strategy was used as a result of the Brokers’ collusive conduct— as opposed to the Brokers’ desire to unload a large quantity of securities in a short period of time. Given the LAB’s own explanation of the benefits of this hedging strategy, such hedging could be expected as short-term protection against interest rate fluctuations even had the Brokers obtained the Funds’ instruments at non-collusive prices. While the Brokers might have recovered an untoward windfall upon resale, even one impossible without improper collusion, the LAB has not alleged that the collusion itself had any impact whatsoever on the secondary market for CMOs, or upon the price at which the Funds’ CMOs were resold. Indeed, as with the liquidations of many other types of volatile securities, the massive dumping of CMOs onto the market by the Brokers and others might well have occurred regardless of the price at which the Brokers obtained the Funds’ instruments' — if only to minimize what could be anticipated to be considerable losses. After all, assuming the validity of the LAB’s own allegations, after the deemed sales of the Funds’ holdings the Brokers were in possession of a significant number of securities known within industry circles as “nuclear waste.” Furthermore, the injuries ostensibly suffered by the Funds do not “flow” from that which would render the Brokers’ collusion illegal under the Sherman Act — the impact of Broker resales upon the secondary market for CMOs, and of massive hedging upon the market for Treasury notes. See ARCO, 495 U.S. at 337, 110 S.Ct. 1884 (“[Rjespondent has not suffered ‘antitrust injury,’ since its losses do not flow from the aspects of vertical, maximum price fixing that render it illegal.”); cf. Legal Economic Evaluations, Inc. v. Metropolitan Life Ins. Co., 39 F.3d 951, 954 (9th Cir.1994) (“The difficulty with Weil’s case is that its injury does not match either the mischief about which it complains or the markets in which it occurred.”). While the LAB now contends that the Brokers’ massive dumping of CMOs onto the open market negatively affected the price of those CMOs, thereby injuring other investors who held those types of obligations, the Funds no longer had any stake whatsoever in the price at which their CMOs were trading once the Brokers conducted their initial liquidation of the Funds’ holdings. Indeed, the Complaint does not indicate that the Funds were participants at all in the secondary market for CMOs, once the Brokers had initiated margin calls and deemed sales of the Funds’ holdings to themselves. See Amarel v. Connell, 102 F.3d 1494,1508 (9th Cir.1996) (“As a corollary to the requirement that ‘the alleged injury be related to anti-competitive behavior,’ we require that ‘the injured party be a participant in the same market as the alleged malefactors.’ ”) (quoting Bhan v. NME Hosps., Inc., 772 F.2d 1467, 1470 (9th Cir.1985)). The Complaint also does not reveal any injury suffered by the Funds themselves as a result of the alleged disruption of the market for Treasury bonds. The LAB has characterized the bidding scheme alleged in its Complaint as one of collusive “monopsony,” whereby unreasonable restraints on trade result from the obtaining of products at below-market prices. Of course, according to the Complaint the bidding scheme engaged in by the Brokers ultimately restricted the Funds’ access to a real market for their own CMOs and, as alleged, caused the Funds harm when the Brokers deemed sales to themselves. It is also true that the Brokers’ scheme purportedly constrained a seller’s access to potential purchasers — thus allowing the colluding parties to set lower prices and recover more profit. However, the LAB cannot survive a motion to dismiss merely by talismanically labeling the Brokers’ collusive behavior as “monopsonist.” In this case, no plausible connection between that collusion and market injury has been alleged. Indeed, there is no allegation that the Brokers enjoyed any monopsony power whatsoever with respect to the secondary market for CMOs. The LAB’s reliance upon Three Crown, 817 F.Supp. at 1033, is misplaced. In Three Crown, plaintiffs who had substantial “short” positions in two-year Treasury notes brought suit, alleging inter alia that the defendants in that action conspired in violation of the Sherman Act to “squeeze” the secondary and financing markets for those notes. The defendants in that case held significant “long” positions in two-year Treasury notes, and purportedly manipulated the supply and circulation of those notes to their benefit. See id. at 1037. Even a cursory glance at Three Crown reveals the marked differences between that case and the case at bar. In that case, the injuries allegedly suffered by plaintiffs and those inflicted upon the relevant market were one in the same, in that restrictions on the supply and circulation of Treasury notes forced investors to pay artificially inflated prices for those notes. The injuries suffered by.the Three Crown plaintiffs had their genesis in the very same anticompetitive “squeeze” that allegedly injured other “short” investors. See id. at 1048 n. 36. As explained above, however, in this case there is a critical disjunction between the injuries suffered by the Funds and the injuries to the relevant market, and there is no satisfactory allegation whatsoever that the Brokers’ collusion itself caused injuries to other investors or to the relevant market. Reid Brothers Logging Co. v. Ketchikan Pulp Co., 699 F.2d 1292 (9th Cir.1983), is similarly inapposite. In Reid Brothers Logging, the defendants conspired to dominate all segments of the Alaskan timber industry, in part by refusing to compete as between themselves for timber sales — thus allowing the defendants to recover a greater profit spread in spite of a chronic shortage of timber — and by frustrating the efforts of others to enter the Alaskan timber market. See id. at 1297-98. While the anticompetitive scheme engaged in by the defendants in Reid Brothers Logging did involve collusive bidding practices, see id., this is where any similarity to the instant case ends. In that case, plaintiffs asserted, and the court found, direct anticompet-itive effects within the relevant market. The bidding conspiracy, as well as the collusive approach to purchasing timber, frustrated competition and resulted in harm to the plaintiff — a logging company rendered captive to the plaintiffs, and upon which an unlawful flat rate, multi-year logging contract was imposed due to defendants’ illegal control of the Alaskan timber industry. See id. at 1300-01. Unlike the instant action, there was no disjunction between the injuries suffered by the plaintiff and the injuries to the relevant market. Indeed, in that case the former flowed directly from the latter. As the Honorable Richard J. Cardamone observed in Capital Imaging Assocs., 996 F.2d at 537, “[a]ntitrust law is not intended to be as available as an over-the-counter cold remedy, because were its heavy power brought into play too readily it would not safeguard competition, but destroy it.” Id. at 539. Given the relevant market asserted in the Complaint and the absence of any plausibly asserted connection between that market and the Brokers’ collusive behavior, the LAB’s Complaint appears to suffer from a philosophical infirmity that further amendment could not cure. In this case, the LAB seeks redress of its private grievances with the Brokers under the aegis of the Sherman Act, despite the absence of any cognizable link between those grievances and the market injuries alleged. As was observed in Granite II, however, such grievances are more appropriately raised in the context of the LAB’s contract claims against the Brokers. See 17 F.Supp.2d at 298. “‘The cornerstone of [antitrust] law is competition. Congresses] intent in passing the Sherman Act was not to subject all business and commercial torts to the scrutiny of federal [antitrust] law.’ ” Telectronics Proprietary, Ltd. v. Medtronic, Inc., 687 F.Supp. 832, 837 (S.D.N.Y.1988) (quoting Falstaff Brewing Co. v. Strok Brewery Co., 628 F.Supp. 822, 826 (N.D.Cal.1986)). Furthermore, “[t]he Sherman Act is neither a lowest-responsible-bidder statute nor a panacea for all business affronts which seem to fit nowhere else.” Scranton Constr. Co. v. Litton Indus. Leasing Corp., 494 F.2d 778, 783 (5th Cir.1974), quoted in Sitkin Smelting & Ref., 575 F.2d at 448. Accordingly, Count VI of the Complaint is dismissed. New York’s antitrust law, the Donnelly Act, is “modeled on the Sherman Act and should be construed in light of federal precedent,” Kramer v. PollockKrasner Found., 890 F.Supp. 250, 254 (S.D.N.Y.1995); see X.L.O. Concrete Corp. v. Rivergate Corp., 83 N.Y.2d 513, 518, 611 N.Y.S.2d 786, 789, 634 N.E.2d 158, 161 (1994). The LAB’s Donnelly Act claim in Count VII of the Complaint is therefore dismissed as well. III. The LAB Has Adequately Pleaded that the Brokers Breached Contracts With the Funds to Provide Accurate Marks (Count III) The LAB’s Complaint contains a claim for breach of contract that was not present in the First Amended Complaint, and therefore not addressed in Granite II. Un-dergirding this claim, according to the Complaint, are the Brokers’ failures to abide by the terms of contracts requiring the provisions of accurate marks to the Funds. The LAB contends that on October 28, 1992, Askin, on behalf of both Granite Corp. and Granite Partners, sent letters (the “October letter(s)”) to each of the Brokers asking them to agree that month-end “marks” — a broker-dealer’s statement of the current market value of a security' — ■ would henceforth be timely and accurately provided. According to the Complaint, these marks were requested by ACM or its predecessor, to be indicated on “Month End Pricing” reports, and the Brokers were aware of the importance of those marks to the Funds in “evaluating and reporting on the overall portfolios of the Funds.” Compl. ¶ 69. Though the LAB’s specific allegations concerning the Brokers’ provision of inaccurate marks differ depending on the specific Brokers involved, the LAB’s basic claim is that the Brokers supplied the Funds with marks rather different than the Brokers’ actual valuations of the securities. The Complaint alleges that on or about November 2, 1992, DLJ, through Richard Whiting, accepted the terms of the October letter in writing. As far as the other Brokers are concerned, however, the Complaint is more circumspect. Merrill Lynch and Bear Stearns are only alleged to have “communicated [their] ... acceptance of its terms.” Compl. ¶ 73. Though Quartz was not formed as of October, 1992, the Complaint alleges that Quartz entered into the same agreement with the Brokers at or about the time of its formation. See Compl. ¶ 74. While the Complaint does not specifically incorporate by reference the October letters, or attach either copies of those letters or any written acceptance, copies of the letters have been submitted as exhibits to the Brokers’ papers. (See de Leeuw Decl. Ex. 6; Balber Aff. Ex. 8; Pietrzak Aff. Ex. B.) Because the Complaint clearly identifies the October letters, and the LAB has obviously relied upon their terms in bringing suit, the Court will consider these exhibits on a 12(b)(6) motion. See Granite II, 17 F.Supp.2d at 300. The letters, which were sent by David Askin on Whitehead/Sterling Advisors, L.P. stationary, request that the Brokers agree to have mark sheets completed and returned by the close of business on the second business day following the month-end. The letters also state that the marks must be both timely and accurate, and that the marks are critical to the reporting of Fund performance. The letters request that the Brokers acknowledge their agreement with their terms by signing in a space provided. In the event that a Broker does not agree to those terms, Askin writes, then the amount of business done with that firm will be significantly reduced. The Brokers have raised a panoply of grounds for dismissal of this particular contract claim, asserting inter alia that the LAB does not have standing to raise the claim, that the LAB has not pleaded valid acceptance on the parts of Bear Stearns and Merrill Lynch, and that any contract is invalid for want of consideration. Both Merrill Lynch and Bear Stearns take the position that the October letters’ own terms require a written acceptance, and that even if this were not the case New York’s statute of frauds would require one. DLJ has not attacked the validity of its acceptance, as the Complaint alleges the letter was signed by a DLJ representative. A. The LAB’s Standing Since any standing infirmities would render the LAB’s efforts to recover for breach of contract fruitless, this issue is addressed first. The Brokers contend that because the October letter was sent by Askin on behalf of ACM’s predecessor in advising the Funds, Whitehead/Sterling, the LAB does not have standing to enforce any binding agreement between the Brokers and the investment advisor. Furthermore, DLJ remonstrates that the existence of specific advisory agreements governing the relationships between the Funds and the ad-visor make clear that any agreement to provide marks would have been between the advisor and the Brokers alone. While under New York law only a party to a contract can typically bring suit to recover for its breach, one can certainly enforce a contract entered by an authorized agent. See Merrick v. New York Subways Adver., Co., 14 Misc.2d 456, 459, 178 N.Y.S.2d 814, 818 (Sup.Ct.1958) (“[I]t is elementary that one may sue upon a contract made for him by his agent.”) (citing 2 Williston on Contracts 1038 ¶352 (rev. ed.1936)); 2A N.Y.Jur.2d, Agency §§ 103 et seq. (1998). Under New York law a third party is also allowed to enforce a contract if that party is an intended beneficiary of the contract. See Flickinger v. Harold C. Brown & Co., 947 F.2d 595, 600 (2d Cir. 1991). The general test for third-party beneficiary status, as adopted by New York from the Restatement (Second) of Contracts is as follows: (1) Unless otherwise agreed between promisor and promisee, a beneficiary of a promise is an intended beneficiary if recognition of a right to performance in the beneficiary is appropriate to effectuate the intention of the parties and ei- • ther (a) the performance of the promise will satisfy an obligation of the promisee to pay money to the beneficiary; or (b) the circumstances indicate that the promisee intends to give the beneficiary the benefits of the promised performance. Restatement (Second) of Contracts § 302 (1981); see Fourth Ocean Putnam Corp. v. Interstate Wrecking Co., 66 N.Y.2d 88, 44-45, 495 N.Y.S.2d 1, 5, 485 N.E.2d 208, 212 (1985) (adopting Restatement position). When determining the intentions of the contracting parties, the intention of the promisee is of primary importance. See Drake v. Drake, 89 A.D.2d 207, 209, 455 N.Y.S.2d 420, 422 (4th Dep’t 1982). Where the obligation to perform to the third-party beneficiary is not expressly stated in the contract at issue, a court “may look to surrounding circumstances to determine whether the contracting parties intended to benefit a third party.” United Int’l Holdings, Inc. v. The Wharf (Holdings) Ltd., 988 F.Supp. 367, 371 (S.D.N.Y. 1997) (citations omitted); see Trans-Orient Marine Corp. v. Star Trading & Marine, Inc., 925 F.2d 566, 573 (2d Cir.1991); Septembertide Publ’g, B.V. v. Stein & Day, Inc., 884 F.2d 675, 679 (2d Cir.1989). While the Complaint does not specifically refer to Whitehead/Sterling by name, it does state that Askin sent the October letters “on behalf of’ Granite Corp. and Granite Partners, Compl. ¶ 70, and that the “same contractual arrangement” was entered by Quartz at the time of its formation. The Complaint also states that, “from September 1991 to December 1992, Askin was employed by the former investment advisor for Partners and Corp.” Compl. ¶ 18. At this stage in the litigation, there is little reason to question the LAB’s standing to seek enforcement of any contract formed pursuant to Askin’s October 28, 1992 letters or any similar letters. The LAB’s Complaint, while sparse, characterizes the contract as one between the Brokers and the Funds. The letters specifically indicate that the provision of marks is for the Funds’ direct benefit, and their language could support the proposition that Askin was operating as an agent of the Funds—which is not at all surprising given the Funds’ reliance on Askin and the successive investment advisors for the selection and purchase of securities. The letter’s language is particularly revealing in this regard: As the Granite Funds continue to grow, so does our commitment to provide accurate and timely information to our investors. A critical component of this commitment is our ability to report our performance as soon after the end of each month as possible. This is where Bear Stearns comes in. An important part of the service you provide the Granite Funds is the monthly marks on the bonds in our portfolios. These marks must be timely as well as accurate.... Therefore, effective with the October 1992 month-end, we would like Bear Stearns to have our mark sheets completely filled-out and returned to us by the close of business on the second business day following the month-end.... Our business operates in a very competitive marketplace, just as yours does. The failure to provide our clients with the highest quality service costs us customers, just as surely as does poor portfolio performance.... (de Leeuw Decl. Ex. 6.) This language certainly does not obviate any possibility that Askin was writing on behalf of the Funds. The Brokers’ protestations notwithstanding, the LAB’s failure to explicitly plead its agency or third party beneficiary theories in its Complaint does not merit dismissal. As the Second Circuit observed in Flickinger, 947 F.2d at 595, “federal pleading is by statement of claim, not by legal theory.” Id. at 600 (citations omitted). Since the LAB’s breach of contract claims in connection with the provision of inaccurate marks appear to be dependent upon the October letters, and the very terms of those letters indicate that Askin could have been writing on behalf of the Funds—or at the very least for their direct benefit—dismissal would not be appropriate at this juncture. Whether or not Askin was actually acting as an agent for the Funds when he wrote the letter, or whether the Funds were intended third-party beneficiaries, are issues more appropriately decided at a later date. The Brokers’ contentions regarding the capacity in which Askin sent the October letters are rendered all the more suspect when one considers Granite IF s holdings regarding the doctrine of in pari delicto. In Granite II it was held that the Funds, acting through Askin and ACM, were active and voluntary participants in the securities purchases of which they now complain. See 17 F.Supp.2d at 309. In reaching this conclusion favorable to the Broker defendants, the Court relied on ACM’s role as agent of the Funds. Id. at 308. While the issues presented in Granite II were not the same as those presented by the LAB’s current contract claims, Askin’s or the investment advisor’s agency to act on behalf of the Funds cannot merely be invoked by the Brokers for their benefit alone. This agency may well turn out to be a double-edged sword— precluding recovery for certain claims under the doctrine of in pari delicto, even as it gives the Funds standing to assert claims based on contracts allegedly entered by Askin on their behalf. That the relationship between the Funds and its advisors were governed by other investment advisory agreements does not, as DLJ suggests in its papers, alter this result. DLJ’s apparent position is that, because ACM or its predecessors were themselves solely responsible for preparing and reporting valuations of the Funds’ securities, any agreement concerning the provision of marks as valuations would necessarily be between the advisors and the Brokers alone. This overlooks, however, both the precise role that ACM and its predecessors played as the Funds’ advis-ors and the appropriate level of scrutiny on a motion to dismiss. While the contractual relationship between the Funds and the advisors did give the investment advis- or responsibility for valuing the Funds’ holdings, and governed the respective rights as between advisor and advisee, this relationship could easily have made the advisor an agent of the Funds for their many other dealings with Brokers and investors. A contractual agreement to provide marks might have been entered into by the advisor on behalf of the Funds, just as the advisor could agree to purchase various securities on behalf of the Funds. Without further inquiry one cannot say. Simply because the subject matter of a contract concerned the domain of issues governed by the investment advisory agreements, however, does not mean that Askin could not also have written the October letters on behalf of the Funds. B. Alleged Invalidity of Oral Contracts Under Terms of October Letters and New York Statute of Frauds Merrill Lynch and Bear Stearns have also expended considerable efforts to convince the Court that, either by the explicit terms of the October letters or under New York’s statute of frauds, any contracts formed pursuant to those letters must be accepted in writing. The Complaint’s failure to plead written acceptance or the LAB’s failure to append a countersigned copy of the letter, the Brokers press, merits dismissal. Because DLJ concedes that it signed the letter, it has not challenged the manner of its acceptance. It is well-established that an offeror may, by the terms of its offer, dictate the manner of an offeree’s acceptance. See Brand, v. 15 West 72nd St. Owners Corp., 117 Misc.2d 652, 655, 458 N.Y.S.2d 1011, 1013 (Sup.Ct.1983); Gram v. Mutual Life Ins. Co., 300 N.Y. 375, 382-83, 91 N.E.2d 307, 311 (1950). This includes requirements that the acceptance be communicated in writing. See Golden Dipt Co. v. Systems Eng’g & Mfg. Co., 465 F.2d 215, 216-17 (7th Cir.1972); Antonucci v. Stevens Dodge, Inc., 73 Misc.2d 173, 175-76, 340 N.Y.S.2d 979, 982-83 (Civ.Ct.1973). Furthermore, under New York law, the application of which does not appear to be disputed, neither contracts in capable of being performed within a year nor contracts for the sale of securities entered prior to October 10, 1997 may be entered orally. ■Under N.Y. Gen. Oblig. Law § 5-701 (McKinney’s 1989), which the Brokers have invoked, an agreement, promise, or undertaking must be subscribed in writing by the party to be charged if, “[b]y its terms [it] is not to be performed within one year from the making thereof.” For section 5-701 to apply the agreement’s terms must truly be incapable of performance in less than one year. The parties’ ability to terminate the agreement without breach in less than a year’s time takes the agreement outside of the statute of frauds. See Rail Europe, Inc. v. Rail Pass Express, Inc., No. 94 CIV. 1506(PKL), 1996 WL 157503, at *4 (S.D.N.Y. Apr. 3, 1996). Under former. N.Y. U.C.C. § 8-319(a) (McKinney’s 1990), which the Brokers have also invoked and was repealed effective October 10, 1997, see 1997 N.Y. Laws ch. 566, § 5, “[a] contract for the sale.of securities is not enforceable by way of action or defense unless ... there is some writing signed by the party against whom enforcement is sought or by his authorized agent or broker sufficient to indicate that a contract has been made for sale of a stated quantity of described securities at a defined or stated price.” While this writing requirement no longer exists, oral contracts or contract modifications entered into prior to October 10, 1997 are still governed by this provision. See N.Y. U.C.C. § 8 — 601(b); Goshom v. Bonamie, No.- 95-CIV-188 RSP/DNH, 1998 WL 166832, at *7 (N.D.N.Y. Apr. 8,1998). Because the LAB has alleged that any contracts formed pursuant to the October lette