Full opinion text
MEMORANDUM OPINION JAMES O. BROWNING, District Judge. THIS MATTER comes before the Court on: (i) the Motion to Dismiss, filed December 3, 2007 (Doc. 53); and (ii) the Motion to Dismiss and Joinder in Director Defendants’ Motion to Dismiss, filed December 3, 2007 (Doc. 52). The Court held a hearing on the motions on May 23, 2008. The primary issues are: (i) whether Lead Plaintiff Lawrence Lane’s allegations are so dependent upon alleged corporate mismanagement under New Mexico state law that they cannot support a federal claim under § 14(a) of the Securities and Exchange Act of 1934 (“1934 Act”); (ii) whether the Private Securities Litigation Reform Act of 1995 (“PSLRA”) imposes heightened pleading requirements on Lane’s allegations and whether Lane’s pleadings meet those requirements; (iii) whether the omissions and misrepresentations Lane alleges the Defendants’ proxy solicitation contains are material; and (iv) whether Lane has properly stated a § 20(a) control-person claim. The Court finds that Lane’s allegations do not turn on state law, but fit within the parameters of a § 14(a) claim; that the PSLRA does apply in part to Lane’s allegations, but that Lane’s pleadings are nonetheless sufficient; and that Lane has properly stated a § 20(a) claim. The Court further finds that some of the alleged omissions and misrepresentations are material, but others are not, and will dismiss those that are not material. Accordingly, the Court will grant in part and deny in part the motions to dismiss. FACTUAL BACKGROUND This case concerns a dispute over the merger of Westland Development Co., Inc. (“Westland”) and SunCal Companies (“SunCal”). After a bidding war that involved offers from several different companies, Westland entered into a merger agreement with SunCal in which SunCal agreed to acquire Westland for a price of $315.00 per share. Several plaintiffs challenged the merger in state court, but the cases were ultimately dismissed. Lane then began a class action lawsuit challenging the merger under federal securities laws, alleging that the proxy statement issued in connection with the merger contained numerous material misrepresentations and omissions. 1. Westland Development Co., Inc. Westland was a New Mexico corporation that owned approximately 56,000 acres of land in and around western Albuquerque, New Mexico. See Motion to Dismiss at 3; Amended Complaint for Violation of §§ 14(a) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 14a-9, filed September 17, 2007 (Doc. 50)(“Amended Complaint”). Westland acquired the land as the successor to the interests bequeathed under the Atrisco land grant, a seventeenth-century royal conveyance by the Spanish monarch. See Motion to Dismiss at 3. In 1692, when the area around Albuquerque was part of the Spanish empire, Charles II, the King of Spain, conveyed a large tract of land to several of his loyal subjects. See id. This land was originally part of the town of Atrisco, and is on what is now the western edge of Albuquerque. See id. The heirs of the original grantees formed Westland in 1967, transferring their interests in the land to the corporation. See Amended Complaint ¶ 6, at 4 (quoting “Insider Deal on the Mesa,” Forbes, September 3, 2007). The heirs became the shareholders of the new corporation. For most of its existence, West-land’s articles of incorporation prohibited the transfer of Westland stock to anyone other than an heir to the Atrisco land grant, and Westland stock was not publicly traded. See Exhibit A to the Amended Complaint, SEC Schedule 14A Definitive Proxy for Westland Development Co., Inc. at 6 (issued September 20, 2006)(“Proxy”). Westland owned about 46,400 acres of land from the Atrisco land grant. See id. Westland owned the mineral rights to that land, including the oil and gas rights. See id. Westland also owned another 10,000 acres of land located north of the original Atrisco land grant, but did not own the mineral rights to that land. See id. West-land was in the business of selling and developing portions of the land it held, and also leased retail property to businesses in Albuquerque and in El Paso, Texas. See id. 2. Prior Merger Offers. Westland had been approached several times by various parties interested in acquiring either Westland or a significant portion of its assets. See id. at 16. None of the inquiries ever materialized into a viable proposal, but Westland’s board of directors engaged an independent company to value Westland’s stock in 2001 and again in February of 2005. See id. at 16. The first valuation determined that West-land was worth about $70 million, or approximately $87.00 per share, while the second valuation four years later produced a figure of approximately $180.00 per share. See id. According to Lane, the first valuation reached a figure of $70 million only after Defendant Barbara Page, Westland’s president, chief executive officer, and chief financial officer, contacted the valuation company and ordered that the valuation be reduced. See Amended Complaint at 20-21. Sometime in early June or late July of 2005, Page met with Philip Aries, the head of Tucson, Arizona, based Aries Realty. See Proxy at 17. Aries was a representative of a group of investors interested in acquiring Westland. See id. The investment group and Westland embarked on a series of negotiations that ultimately resulted in a term sheet that Westland’s board of directors approved on August 17, 2005. See id. at 18. The terms provided for the acquisition of Westland by way of merger into a newly formed company named ANM Holdings, Inc. (“ANM”), with Westland shareholders being cashed out for $200.00 per share. See id. The terms also permitted Westland to consider other offers in a post-signing market-check — a so-called fiduciary out. See id. On September 19, 2005, Westland approved the merger agreement. See id. at 19. Westland proceeded to consider a series of unsolicited offers that it received in the wake of publicity about the merger discussions and its filing with the Securities and Exchange Commission (“SEC”) in connection with the proposed merger. See id. Westland determined that two of the offers it received, from Sedora Holdings, LLC (“Sedora”) and Atrisco Heritage, were genuine “acquisition proposals” under the merger agreement with ANM. See id. at 21. Westland entered into negotiations with the companies making the offers and ultimately concluded that Sedora’s offer of $255.00 per share was superior to either ANM or Atrisco Heritage’s offers. See id. at 22. Westland exercised its rights under the fiduciary out, and ANM decided not to counter Sedora’s offer. See id. Westland canceled its merger agreement with ANM and entered into a merger agreement with Sedora. See id. The new merger agreement with Sedo-ra, like the one with ANM, had a fiduciary-out clause. On May 23, 2006, SunCal entered the picture and made a proposal to acquire Westland for $280.00 per share. See id. at 23. 3. The Merger with SunCal. On May 31, 2006, Westland’s board of directors determined that SunCal’s offer was superior to Sedora’s offer, and gave Sedora until June 5, 2006 to revise its offer. See id. After Westland’s determination that SunCal’s offer was superior, Westland continued to receive additional offers and Sedora also amended its offer in an effort to regain its status as the preferred buyer. See id. Bidding continued and SunCal increased its offer twice, ultimately arriving at a figure of $315.00 per share, an amount with which Sedora declined to compete. See id. Westland and SunCal formally entered into a merger agreement on July 19, 2006. See id. Under the terms of the merger agreement, each issued and outstanding share of Westland common stock would be converted into the right to receive $315.00 in cash, with an acquisition company created by SunCal becoming the owner of all of West-land’s outstanding stock. See id. at 26. Additionally, a company called Atrisco LLC would be formed, which would be a vehicle for providing income from West-land’s mineral rights to Westland’s shareholders. Atrisco LLC would receive all the income from Westland’s existing oil- and-gas leases, plus half the income from future mineral leases on Westland property. See id. The agreement also provided for the creation of Atrisco Heritage Foundation (“Foundation”), a non-profit organization that was to be devoted to the cultural heritage of the Atrisco heirs. See id. at 24, 26-27. On September 20, 2006, Westland filed its definitive proxy statement for the merger with the SEC and mailed the Proxy to Westland’s shareholders. See Amended Complaint ¶ 3, at 1. A shareholder meeting was convened on November 6, 2006, and on November 21, 2006, Westland announced that shareholders had approved the merger. See id. ¶ 5, at 2. On December 7, 2006, Westland “announced the consummation of the” merger. Id. 4. Westland’s Proxy Statement. The Proxy that Westland released in connection with the merger contained a number of statements and omissions that Lane alleges are false or misleading. These statements and omissions form the heart of this case, and are detailed individually below. a. Conflicts of Interest. Lane alleges that the Proxy failed to fully disclose several conflicts of interest involving a number of Westland directors. The Proxy disclosed that two of Westland’s board members had contracts that would result in severance payments for involuntary dismissal. According to the Proxy, Page was “employed as Westland’s president and chief executive officer under a renewable six year employment agreement” that also provided for seven times her annual salary as a severance payment if her employment were involuntarily terminated. Proxy at 30. The Proxy also stated that Defendant Sosimo Padilla, Westland’s chairman and executive vice president, had a consulting agreement with similar severance terms as Page’s contract. See id. In addition to those contracts, the Proxy-stated that the existing Westland directors could receive future positions on the board of Atrisco LLC and as trustees of the Foundation. The existing Westland board of directors was given the power to appoint the Foundation’s trustees from among Westland’s shareholders, and it was considered likely that “one or more” of Westland’s directors would be chosen as a trustee. Id. at 31. Atrisco LLC’s board of directors was to be drawn from the Westland board of directors, although which directors would be picked was said to be undecided. See id. According to Lane, the Proxy failed to mention that Page and Padilla’s contracts were of recent vintage, having been secretly modified to secure their support for the merger. See Amended Complaint ¶¶ 39-40, at 15. He also asserts that the Proxy failed to disclose that “at least four West-land directors were promised lifelong trusteeships” at the Foundation or on the board of Atrisco LLC, and that instead of receiving “customary fees” for their service, they were going to receive outsized “lucrative annual retainers.” Id. ¶ 42, at 16. b. Page’s Vote Against the Merger. Lane’s complaint states that the Proxy contains nothing about the fact that Defendant Page voted against the merger at a board meeting on July 18, 2006, and that Defendant Troy Benavidez abstained from voting at the same meeting. See id. ¶¶ 44-45, at 18. The Proxy stated only, Lane notes, that Westland’s board of directors recommended that the shareholders approve the merger. See id. c. Westland’s Directors Voting their Shares. In a question-and-answer section about the merger, the Proxy stated that “West-land’s directors and officers plan to vote their shares in favor of the approval of the merger agreement.” Proxy at 10. According to Lane, despite this representation, four of the nine directors on West-land’s board — Benavidez, Defendant Ray Mares, Jr., Defendant Charles Pena, and Defendant Randolph Sanchez — did not vote their Class A shares against the merger, while a fifth director — Defendant Joe Chavez — voted only 100 of his 310 Class A shares in favor of the merger. See Amended Complaint ¶ 45 & n. 4, at 18. d. The Market-Check Process. The Proxy stated that Westland was employing a market-check process in connection with the merger and that “West-land’s board of directors had every reason to believe that the post-signing market check would be effective in maximizing shareholder value by finding the best acquisition proposal for Westland.” Proxy at 27. The market cheek consisted primarily of the consideration of various different offers to acquire the company. See id. at 19-27. According to Lane, Westland never actively solicited prospective bidders to secure the best value for the company. See Amended Complaint ¶ 46, at 19. e. The Valuation of Westland. Lane alleges that there were two important flaws in the Proxy’s disclosure of the valuations made of Westland. The Proxy mentioned two separate valuations that the same independent valuation firm conducted' — one performed in 2001, the other in 2005. The 2001 opinion valued Westland at about $87.00 per share, See Proxy at 16, while the 2005 opinion valued Westland at about $180.00 per share, see Proxy at 27. Lane alleges that the Proxy failed to disclose that an earlier valuation in 2001 originally valued Westland at $249 per share, but was lowered to $87 per share on Page’s orders. See Amended Complaint ¶ 48, at 20-21. Lane also alleges that the 2005 opinion is undermined by the failure of the Proxy to mention an internal appraisal by Westland’s vice president of sales that valued Westland at more than twice that of the 2005 opinion. See id. ¶ 47, at 20. f. Statement of Fairness by the Board. According to the Proxy, Westland’s board of directors thought the merger was “fair to, and in the best interests of West-land and Westland’s shareholders.” Proxy at 26. The Proxy also states that the board held this belief, “in part, because the cash consideration to be received by holders of Westland common stock is fair, from a financial point of view, to the Westland shareholders.” Id. at 6. g. The Tax-Increment Development District. In discussing the board of directors’ views on the merger, the Proxy asserted that Westland was a somewhat “unattractive” acquisition target because it held a “vast amount of undeveloped land” that would be very expensive and time consuming to develop. Proxy at 27. Additionally, Westland was facing “significantly increasing costs ... to develop its own land,” because the City of Albuquerque would not bear infrastructure costs associated with recent Westland developments, such as the Petroglyphs. Id. at 28. Lane alleges the Proxy, however, failed to mention that “SunCal had arranged to take advantage of an October 2006 Tax Increment Development District (“TIDD”) which allowed SunCal to utilize tax dollars to fund infrastructure costs associated with the development of Westland.” Amended Complaint ¶ 51, at 22. h. Mineral Rights and Atrisco LLC. Lane alleges that the Proxy made four particular omissions regarding the mineral resources available to Westland and the creation of Atrisco LLC. The Proxy stated that Westland had no opinion as to the value of Class A stock in Atrisco LLC, and stated that Westland’s management did not know if there was “oil, natural gas, coal bed methane gas or any other natural resource under Westland’s land,” and was “not aware of any commercially successful drilling on the property.” Proxy Statement at 7. Lane contends this statement ignores four important facts that should have been disclosed: (i) that Westland’s board of directors had been informed that between 100 and 500 million barrels of oil could be located on Westland property; (ii) that Defendant Sanchez had expressed his concern at an August 29, 2005, board meeting about losing valuable water and mineral rights; (iii) that Westland had received an offer from Savant Resources to lease all of Westland’s property for oil and gas exploration; and (iv) that Tecton Energy LLC had offered to expand its existing oil and gas exploration lease from 7,000 to 30,000 acres. See Amended Complaint ¶ 52, at 28. i. Proxy Solicitors The Proxy included a segment dealing with proxy solicitors, which stated that “Westland expects to make arrangements with and compensate approximately 90 individuals to assist in the solicitation” of the proxies. Amended Complaint ¶ 47, at 20 (quoting Proxy at 16). Westland did not hire any proxy solicitors. Lane alleges that the Defendants were aware that Westland never hired any proxy solicitors, but that SunCal retained all the proxy solicitors, “who secretly received lucrative payments for delivering votes in favor of the” merger. Id. ¶ 57, at 25. PROCEDURAL BACKGROUND Lane filed his Complaint on November 3, 2006. See Complaint for Violation of §§ 14(a) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 14a-9, filed November 3, 2006 (Doc. 1). On the same day, Lane filed a motion for a temporary restraining order, seeking to enjoin the shareholder vote on the proposed Sun-Cal merger. See Request for Hearing on Motion and Memorandum of Law in Support of Plaintiffs Application for Temporary Restraining Order and Order to Show Cause why a Preliminary Injunction Should not Issue at 1, filed November 3, 2006 (Doc. 3)(“Motion for TRO”). The Court held a hearing on the Motion for TRO and issued an order denying the motion. See Order, filed November 8, 2006 (Doc. 7). On January 19, 2007, Lane filed a motion to be appointed Lead Plaintiff and to approve his choice of lead counsel for the class. See Lawrence Lane’s Motion for Appointment as Lead Plaintiff and Approval of His Selection of Lead Counsel, filed January 19, 2007 (Doc. 27). On February 5, 2007, Frank Martin moved to intervene in this case, seeking to challenge Lane’s efforts to be appointed Lead Plaintiff. See Motion to Intervene to Seek Order that Notice of Pendency of Action be Republished, filed February 5, 2007 (Doc. 29). The Court denied Martin’s efforts to intervene as moot, appointed Lane as Lead Plaintiff, and approved Lane’s selection of Lerach Coughlin Stoia Geller Rudman & Robbins LLP as lead counsel. See Memorandum Opinion and Order at 23-24, filed July 2, 2007 (Doc. 43). On September 17, 2007, Lane filed his Amended Complaint, and then on December 3, 2007, the Defendants filed their motions to dismiss. Lane filed his response on February 18, 2008. See Lead Plaintiffs Memorandum of Law in Opposition to Defendants’ Motion to Dismiss (Doc. 57)(“Response”). On March 18, 2008, the director Defendants filed a reply. See Directors’ Reply in Support of their Motion to Dismiss, filed March 18, 2008 (Doc. 63)(“Reply”). STANDARDS FOR DISMISSAL UNDER RULE 12(b)(6) OF THE FEDERAL RULES OF CIVIL PROCEDURE Under rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed. R.Civ.P. 12(b)(6). “The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir.1994). The sufficiency of a complaint is a question of law, and when considering and addressing a rule 12(b)(6) motion, a court must accept as true all well-pleaded factual allegations in the complaint, and view those allegations in the light most favorable to the non-moving party and draw all reasonable inferences in the plaintiffs favor. See Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir.2006); Hous. Auth. of Kaw Tribe v. City of Ponca City, 952 F.2d 1183, 1187 (10th Cir.1991). A complaint challenged by a rule 12(b)(6) motion to dismiss does not require detailed factual allegations, but a plaintiffs obligation to set forth the grounds of his or her entitlement to relief “requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, -, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). “Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 1965 (internal citation omitted). [T]he [United States Supreme] Court recently ... prescribed a new inquiry for us to use in reviewing a dismissal: whether the complaint contains ‘enough facts to state a claim to relief that is plausible on its face.’ Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177 (10th Cir.2007)(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, -, -, 127 S.Ct. 1955, 1967, 1969, 167 L.Ed.2d 929 (2007)). “The Court explained that a plaintiff must ‘nudge his claims across the line from conceivable to plausible’ in order to survive a motion to dismiss.” Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d at 1177 (quoting Bell Atl. Corp. v. Twom-bly, 127 S.Ct. at 1974.)(alterations omitted). “Thus, the mere metaphysical possibility that some plaintiff could prove some set of facts in support of the pleaded claims is insufficient; the complaint must give the court reason to believe that this plaintiff has a reasonable likelihood of mustering factual support for these claims.” Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d at 1177. In resolving a motion to dismiss brought under rule 12(b)(6), the court must determine whether the factual allegations are sufficient “to raise a right to relief above the speculative level,” while assuming “that all the allegations in the complaint are true (even if doubtful in fact).” Bell Atl. Corp. v. Twombly, 127 S.Ct. at 1965 (internal quotation marks omitted). “[Plausibility” in this context must refer to the scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs “have not nudged their claims across the line from conceivable to plausible.” [Bell Atl. Corp. v. Twombly, 127 S.Ct.] at 1974. The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief. Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir.2008). This requirement of plausibility serves not only to weed out claims that do not (in the absence of additional allegations) have a reasonable prospect of success, but also to inform the defendants of the actual grounds of the claim against them. “Without some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirement of providing not only ‘fair notice’ of the nature of the claim, but also ‘grounds’ on which the claim rests.” [Bell Atl. Corp. v. Twombly, 127 S.Ct.] at 1965 n. 3. See Airborne Beepers & Video, Inc. v. AT & T Mobility L.L.C., 499 F.3d 663, 667 (7th Cir.2007) (“[A]t some point the factual detail in a complaint may be so sketchy that the complaint does not provide the type of notice of the claim to which the defendant is entitled under Rule 8.”). The Twombly Court was particularly critical of complaints that “mentioned no specific time, place, or person involved in the alleged conspiracies.” 127 S.Ct. at 1971 n. 10. Given such a complaint, “a defendant seeking to respond to plaintiffs’ conclusory allegations ... would have little idea where to begin.” Id. Robbins v. Oklahoma, 519 F.3d at 1248. LAW REGARDING SANTA FE INDUSTRIES In Santa Fe Industries, Inc. v. Green, 430 U.S. 462, 97 S.Ct. 1292, 51 L.Ed.2d 480 (1977), the Supreme Court of the United States held that corporate mismanagement was not automatically actionable under § 10(b) of the Securities Exchange Act of 1934 (“1934 Act”). See 430 U.S. at 480, 97 S.Ct. 1292. The Supreme Court stated that it would “adhere to the position that ‘Congress by 10(b) did not seek to regulate transactions which constitute no more than internal corporate mismanagement.’ ” Id. at 479 (quoting Superintendent of Insurance v. Bankers Life & Cas. Co., 404 U.S. 6, 12, 92 S.Ct. 165, 30 L.Ed.2d 128 (1971)). Santa Fe Industries, Inc. v. Green involved the Delaware short-form merger law, which allowed a parent company owning at least ninety percent of the outstanding shares of a subsidiary corporation to merge with the subsidiary and cash out the minority shareholders without the pri- or notice or consent of the minority shareholders. See Santa Fe Industries, Inc. v. Green, 430 U.S. at 462, 97 S.Ct. 1292. The plaintiffs in the case challenged that the parent corporation had breached “its fiduciary duty to deal fairly with minority shareholders” of the subsidiary by concluding a short-form merger “without any justifible [sic] business purpose.” Id. at 470, 97 S.Ct. 1292 (internal quotation marks omitted). The lower courts had found this event to create a cause of action under § 10(b) of the 1934 Act, see 430 U.S. at 470, 97 S.Ct. 1292, but the Supreme Court reversed and held that the alleged breach of duty “was neither deceptive nor manipulative and therefore did not violate either” § 10(b) of the 1934 Act or SEC rule 10b-5. 430 U.S. at 474, 97 S.Ct. 1292. The Supreme Court distinguished the situation before it from that in several others cases where a breach of fiduciary duty had been found to constitute a violation of § 10(b) of the 1934 Act, because those cases “included some element of deception.” 430 U.S. at 475, 97 S.Ct. 1292. The scope of Santa Fe Industries, Inc. v. Green has been expanded to include other federal securities laws, including § 14(a) of the 1934 Act. See Kas v. Financial General Bankshares, Inc., 796 F.2d 508, 513 (D.C.Cir.1986). Santa Fe Industries, Inc. v. Green “requires a court to distinguish between an actionable omission or misrepresentation of a material fact and a claim solely for breach of a state-law fiduciary duty.” Kas v. Financial General Bankshares, Inc., 796 F.2d at 513. “A plaintiff may not ‘bootstrap’ a claim of breach of fiduciary duty into a federal securities claim by alleging that directors failed to disclose that breach of fiduciary duty.” Id. (internal quotation marks and citation omitted); In re Mesa Airlines Securities Litigation, 1996 WL 33419894 at * 14 (D.N.M.1996)(Conway, Chief J.)(“[T]o be actionable the undisclosed information must be material for reasons other than mismanagement or bad faith.”). Santa Fe Industries, Inc. v. Green does not, however, “preclude an action under the Securities Exchange Act based on a material nondisclosure or misrepresentation simply because the undisclosed facts involved might also support a breach of fiduciary duty claim.” Kas v. Financial General Bankshares, Inc., 796 F.2d at 512. The United States Court of Appeals for the District of Columbia Circuit, in Kas v. Financial General Bankshares, Inc., noted that “Santa Fe itself declares that ‘the existence of a particular state-law remedy is not dispositive of the question whether Congress meant to provide a similar federal remedy’ under section 10(b).” 796 F.2d at 512 (quoting Santa Fe Industries, Inc. v. Green, 430 U.S. at 478, 97 S.Ct. 1292). The proper test is that, “if the validity of a shareholder’s claim of material misstatement or nondisclosure rests solely on a legal determination” of state law, then Santa Fe Industries, Inc. v. Green bars the claim from being valid under federal securities laws. Kas v. Financial General Bankshares, Inc., 796 F.2d at 513. LAW REGARDING SPECIFICITY REQUIRED BY THE PSLRA AND RULE 9(b) The PSLRA amended federal securities laws and applied a heightened-pleading standard to many securities lawsuits. See PSLRA, Pub.L. No. 104-67, 109 Stat. 737, codified at 15 U.S.C. §§ 78u-4 et seq. (2008). The PSLRA provides that: (1) Misleading statements and omissions In any private action arising under this chapter 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)(1) (2008)(“ § 78u-4(b)(1)”). The PSLRA further provides: (2) Required state of mind In any private action arising under this chapter in which the plaintiff may recover money damages only on proof that the defendant acted with a particular state of mind, the complaint shall, with respect to each act or omission alleged to violate this chapter, state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind. Id. at § 78u-4(b)(2) (“ § 78u-4(b)(2)”). These two provisions of the PSLRA require that plaintiffs in securities litigation, in appropriate circumstances, plead their allegations under a higher standard than the Federal Rules of Civil Procedure would normally require. 1. Application of § 78u-4(b)(l) to § 14(a) Claims. The United States Court of Appeals for the Third Circuit has held that, under the PSLRA, “the complaint in a Section 14(a) action must 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, all facts with particularity on which that belief is formed.” In re NAHC, Inc. Securities Litigation, 306 F.3d 1314, 1329 (3d Cir.2002)(citing and paraphrasing 15 U.S.C. § 78u-4(b)(l)). Allegations against numerous corporate officers can raise special concerns. The United States Court of Appeals for the Fifth Circuit has held that, when suit is filed against multiple defendants in a securities case, the PSLRA requires plaintiffs to “distinguish among those they sue and enlighten each defendant as to his or her particular part in the alleged fraud.” Southland Securities Corp. v. INSpire Ins. Solutions, Inc., 365 F.3d 353, 365 (5th Cir.2004)(internal quotation marks omitted). The United States Court of Appeals for the Tenth Circuit, at least in context of rule 9(b) fraud pleading, has stated: “Identifying the individual sources of statements is unnecessary when the fraud allegations arise from misstatements or omissions in group-published documents such as annual reports, which presumably involve collective actions of corporate directors or officers.” Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246, 1254 (10th Cir.1997). The Tenth Circuit does not appear to have ruled yet whether the PSLRA applies to actions brought under 14(a). Other circuits have weighed in on the issue, however, and they all seem to have uniformly concluded that § 14(a) actions are subject to the PSLRA provisions. The United States Court of Appeals for the Ninth Circuit, for instance, has held that § 78u-4(b)(l) (as well as (b)(2)) applies to § 14(a) claims. See Knollenberg v. Har monic, Inc., 152 Fed.Appx. 674, 682-83 (9th Cir.2005)(unpublished opinion). The Third Circuit has also held that the heightened requirements for pleading with particularity apply to § 14(a) claims, at least when they are based on allegations of fraud. See California Public Employees’ Retirement System v. Chubb Corp., 394 F.3d 126, 144-45 (3d Cir.2004). While the Tenth Circuit has not ruled on the applicability of the PSLRA to § 14(a) actions, it has elaborated on what the heightened-pleading requirements of § 78u-4(b)(l) require a plaintiff to do, although it did so in the context of an action brought pursuant to sections 10(b) and 20(a) of the 1934 Act. See Adams v. Kinder-Morgan, Inc., 340 F.3d 1083, 1087 (10th Cir.2003). The Tenth Circuit concluded that, “notwithstanding the use of the word ‘all,’ paragraph (b)(1) [of § 78u-4] does not require that plaintiffs plead with particularity every single fact upon which their beliefs concerning false or misleading statements are based.” 340 F.3d at 1098—99 (quoting Novak v. Kasaks, 216 F.3d 300, 313-14 (2d Cir.2000)). Such a reading of ‘all’ would be virtually impossible for a court to implement, as no court could ever really be sure what ‘all of the facts’ a plaintiff was relying upon were. Adams v. Kinder-Morgan, Inc., 340 F.3d at 1098. Instead, the plaintiffs must “identify in the complaint specific facts that support the allegations about the misleading nature of the defendant’s statements. Generalized or conclusory allegations of fraud will not be sufficient.” Id. at 1099. The Tenth Circuit has adopted the United States Court of Appeals for the Second Circuit’s approach to determine whether the plaintiff has pled sufficient specific facts. This approach requires the court to evaluate “the facts alleged in a complaint to determine whether, taken as a whole, they support a reasonable belief that the defendant’s statements identified by the plaintiff were false or misleading.” Id. In applying this standard, the Tenth Circuit directs courts to evaluate six factors: (1) the level of detail provided by the facts stated in a complaint; (2) the number of facts provided; (3) the coherence and plausibility of the facts when considered together; (4) whether the source of the plaintiffs knowledge about a stated fact is disclosed; (5) the reliability of the sources from which the facts were obtained; and (6) any other indicia of how strongly the facts support the conclusion that a reasonable person would believe that the defendant’s statements were misleading. Id. After considering these enumerated factors' and “measuring the nature of the facts alleged against these indicia, [if] a reasonable person would believe that the defendant’s statements were false or misleading, the plaintiff has sufficiently pled with particularity facts supporting his belief in the misleading nature of the defendant’s statements.” Id. The Tenth Circuit rejected the approach that several other circuits have taken — requiring plaintiffs to disclose the source of their knowledge of the facts pled — and held that § 78u-4(b)(1) imposes no obligation for disclosure of sources on plaintiffs. See Adams v. Kinder-Morgan, Inc., 340 F.3d at 1100-02 (considering and rejecting alternate approaches by sister circuits). “[B]y disclosing such sources plaintiffs can significantly strengthen their pleading ....”, however, and in certain circumstances with very general allegations, it “may ... be necessary to plead the source of the information in order to satisfy the particularity requirement of § 78u-4(b)(l).” Adams v. Kinder-Morgan, Inc., 340 F.3d at 1102. Overall, the Tenth Circuit characterizes the proper approach to applying the heightened-pleading standards of § 78u-4(b)(1) as involving “a common-sense, case-by-case approach.” Adams v. Kinder-Morgan, Inc., 340 F.3d at 1102. 2. Application of § 78ur-4(b)(2) to § 14(a) Claims. Case law indicates that negligence can be an appropriate basis for a § 14(a) claim. See, e. g., Wilson v. Great American Industries, Inc., 855 F.2d 987, 995 (2d Cir.1988)(stating that “liability can be imposed for a negligently drafted proxy statement”); New Jersey v. Spyint Corp., 531 F.Supp.2d 1273, 1285 (D.Kan.2008)(finding that § 14(a) claim sounded in negligence). The Tenth Circuit, however, has not ruled whether § 78u-4(b)(2) applies to § 14(a) actions that are brought pursuant to a negligence theory. The United States Court of Appeals for the Eighth Circuit has recently reaffirmed its precedents holding that negligence is a state of mind and that § 78u-4(b)(2) applies to actions brought under § 14(a) alleging negligent misrepresentation. See Little Gem Life Sciences, LLC v. Orphan Medical, Inc., 537 F.3d 913, 916 (8th Cir.2008)(finding argument that negligent misrepresentation actions do not involve a state of mind to be “unpersuasive and unsupported by precedent.”)(citing United States v. Robinson, 439 F.3d 777, 780 (8th Cir.2006)). Other courts have held that § 78u-4(b)(2) applies to claims brought under a negligence theory. See e.g., Knollenberg v. Harmonic, Inc., 152 Fed.Appx. at 682-83 (citing In re McKesson HBOC, Inc. Securities Litigation, 126 F.Supp.2d 1248, 1267 (N.D.Cal.2000)); In re JPMorgan Chase & Co. Securities Litigation, 2007 WL 4531794, at *7 (N.D.Ill.2007)(unreported opinion)(noting that it agreed with the majority of circuit courts that had considered the issue in holding negligence to be a state of mind covered by § 78u-4(b)(2)). Despite the lack of any controlling cases on the issue, the Tenth Circuit has held, albeit in a different context, that “negligence is conduct, and not a state of mind.” United States v. Ortiz, 427 F.3d 1278, 1283 (10th Cir.2005)(quoting W. Keeton, Pros-ser and Keeton on Torts § 31 (5th ed.1984)). United States v. Ortiz dealt with negligence under the Clean Water Act, and the Tenth Circuit found no reason to depart from the ordinary meaning of negligence, which did not involve a state of mind element. See id. at 1282-83. The only opinion of which the Court is aware from any federal court within the Tenth Circuit dealing with this precise issue concluded that it was unnecessary to reach the issue, because the plaintiffs complaint would be able to satisfy the heightened requirements. See New Jersey v. Sprint Corp., 531 F.Supp.2d at 1285-86. 3. Rule 9(b) of the Federal Rules of Civil Procedure. Rule 9(b) imposes a heightened-pleading requirement for claims sounding in fraud that is independent of the pleading requirements for securities litigation under the PSLRA. Rule 9(b) provides: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Fed.R.Civ.P. 9(b). A properly pled claim of fraud will “set forth the time, place and contents of the false representation, the identity of the party making the false statement and the consequences thereof.” Koch v. Koch Indus., 203 F.3d 1202, 1236 (10th Cir.2000)(quoting In re Edmonds, 924 F.2d 176, 180 (10th Cir.1991)). “At a minimum, Rule 9(b) requires that a plaintiff set forth the ‘who, what, when, where and how’ of the alleged fraud.” United States ex rel. Sikkenga v. Regence Bluecross Blueshield of Utah, 472 F.3d 702, 727 (10th Cir.2006)(quoting Thompson v. Columbia/HCA Healthcare Corp., 125 F.3d 899, 903 (5th Cir.1997)). It is unclear in the Tenth Circuit, however, whether rule 9(b) applies to all securities cases. The PSLRA pleading requirements for state of mind are more stringent than rule 9(b), so the “PSLRA supersedes [the] part of Rule 9(b)” allowing for general allegations of mental states. Adams v. Kinder-Morgan, Inc., 340 F.3d at 1096. It is unclear whether the remainder of rule 9(b), requiring pleading the circumstances of fraud with particularity, imposes any burden beyond that already laid upon a plaintiff by § 78u-4(b)(1). Moreover, the Tenth Circuit has not applied rule 9(b) to claims based on negligent misrepresentation. See City of Raton v. Arkansas River Power Authority, No. CIV 08-0026 JB/WDS, Memorandum Opinion and Order at 16, filed September 17, 2008 (D.N.M.)(Browning, J.)(noting that only a single district court case has applied rule 9(b) to negligent misrepresentation claims). Negligent misrepresentation and fraud claims have different elements. Most notably, negligent misrepresentation focuses on what a defendant did and what a reasonable person in the defendant’s circumstances would have done, while fraud claims focus on the actual knowledge that the defendant possessed. See id. at 17-18. LAW REGARDING § 14(a) AND MATERIALITY OF STATEMENTS Section 14(a) of the 1934 Act provides: It shall be unlawful for any person, by the use of the mails or by any means or instrumentality of interstate commerce or of any facility of a national securities exchange or otherwise, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors, to solicit or to permit the use of his name to solicit any proxy or consent or authorization in respect of any security (other than an exempted security) registered pursuant to section 781 of this title. 15 U.S.C. § 78n(a) (2008)(“ § 14(a)”). Rule 14a-9, which the SEC enacted pursuant to its authority to regulate proxy solicitations under § 14(a), provides the substantive content for many claims under § 14(a). That rule provides: No solicitation subject to this regulation shall be made by means of any proxy statement, form of proxy, notice of meeting or other communication, written or oral, containing any statement which, at the time and in the light of the circumstances under which it is made, is false or misleading with respect to any material fact, or which omits to state any material fact necessary in order to make the statements therein not false or misleading or necessary to correct any statement in any earlier communication with respect to the solicitation of a proxy for the same meeting or subject matter which has become false or misleading. 17 C.F.R. § 240.14a-9 (2008)(“rule 14a-9”). The elements of a claim under § 14(a) of the 1934 Act and rule 14a-9 are threefold. The plaintiff must establish that: (i) the proxy statement contained a material misrepresentation or omission; (ii) that the defendants were at least negligent; and (iii) that the proxy statement was an essential link in the completion of the transaction at issue. See Mills v. Auto-Lite Co., 396 U.S. 375, 385, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970); Boone v. Carlsbad Bancorp., Inc., 1988 WL 341347, at *10 (D.N.M.1988)(citing Wilson v. Great American Industries, Inc., 661 F.Supp. 1555, 1562 (N.D.N.Y.1987)). The Supreme Court has made the definition of materiality in securities cases turn on a reasonable shareholder standard. “An omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote.” TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976); Garcia v. Cordova, 930 F.2d 826, 829 (10th Cir.1991). As the Supreme Court has stated, this standard does not require proof of a substantial likelihood that disclosure of the omitted fact would have caused the reasonable investor to change his vote. What the standard does contemplate is a showing of a substantial likelihood that, under all the circumstances, the omitted fact would have assumed actual significance in the deliberations of the reasonable shareholder. TSC Industries, Inc. v. Northway, Inc., 426 U.S. at 449, 96 S.Ct. 2126. A court must look to the contemporaneous facts surrounding a representation to determine whether it was false. See Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083, 1093-94, 111 S.Ct. 2749, 115 L.Ed.2d 929 (1991). But corporations and corporate officers also have an ongoing duty to ensure that later events do not render a disclosure misleading. The Second Circuit has held that management “ ‘cannot lawfully sit by and allow shareholders to approve corporate action on the basis of a proxy statement without disclosing facts arising since its dissemination if these are so significant as to make it materially misleading, and we have no doubt that Rule 14a-9 is broad enough to impose liability for non-disclosure in’ ” such situations. SEC v. Parklane Hosiery Co., Inc., 558 F.2d 1083, 1089 n. 3 (2d Cir.1977)(quoting Gerstle v. Gamble-Skogmo, Inc., 478 F.2d 1281, 1297 n. 15 (2d Cir.1973)). Corporate directors’ opinions can be material. See SEC v. Parklane Hosiery Co., Inc., 558 F.2d 1083, 1089-90. As the Supreme Court stated in Virginia Bankshares, Inc. v. Sandberg: Shareholders know that directors usually have knowledge and expertness far exceeding the normal investor’s resources, and the directors’ perceived superiority is magnified even further by the common knowledge that state law customarily obliges them to exercise their judgment in the shareholders’ interest. Naturally, then, the shareowner faced with a proxy request will think it important to know the directors’ beliefs about the course they recommend and their specific reasons for urging the stockholders to embrace it. 501 U.S. at 1091, 111 S.Ct. 2749. On the other hand, the Supreme Court also found “mere disbelief or undisclosed motivation, standing alone, insufficient to satisfy the element of fact that must be established under § 14(a).” Id. at 1096, 111 S.Ct. 2749. For a proxy statement to avoid being materially false or misleading, it does not need to reveal all details at issue, or use any particular language, but must create only a “sufficiently accurate picture so as not to mislead.” Kennecott Copper Corp. v. Curtiss-Wright Corp., 584 F.2d 1195, 1200 (2d Cir.1978). Among the information that need not be disclosed, according to the United States Court of Appeals for the Sixth Circuit, is so-called “soft information.” In re Ford Motor Co. Securities Litigation, 381 F.3d 563, 569 (6th Cir.2004). Soft information includes “information that is uncertain and not objectively verifiable such as ‘predictions, matters of opinion, and asset appraisals.’ ” Id. (quoting Helwig v. Vencor, Inc., 251 F.3d 540 (6th Cir.2001)). LAW REGARDING § 20(a) CONTROL PERSON CLAIMS Section 20(a) of the 1934 Act provides for “control person” liability. Section 20(a) claims are essentially derivative of other securities claims— § 14(a) claims in this case. Section 20(a) provides that: Every person who, directly or indirectly, controls any person liable under any provision of this chapter or of any rule or regulation thereunder shall also be liable jointly and severally with and to the same extent as such controlled person to any person to whom such controlled person is liable, unless the controlling person acted in good faith and did not directly or indirectly induce the act or acts constituting the violation or cause of action. 15 U.S.C. § 78t(a) (2008). The Tenth Circuit has interpreted this statutory provision to require that, “to state a prima facie case of control person liability, the plaintiff must establish (1) a primary violation of the securities laws and (2) ‘control’ over the primary violator by the alleged controlling person.” City of Philadelphia v. Fleming Cos., Inc., 264 F.3d 1245, 1270-71 (10th Cir.2001)(quoting Maher v. Durango Metals, Inc., 144 F.3d 1302, 1305 (10th Cir.1998)). The Tenth Circuit has “expressly ‘rejected] those decisions that may be read to require a plaintiff to show the defendant actually or culpably participated in the primary violation.’ ” Maher v. Durango Metals, Inc., 144 F.3d at 1305 (quoting First Interstate Bank of Denver v. Central Bank of Denver, 969 F.2d 891, 897 (10th Cir.1992), rev’d on other grounds by Central Bank of Denver v. First Interstate Bank of Denver, 511 U.S. 164, 114 S.Ct. 1439, 128 L.Ed.2d 119 (1994)). Instead, “once the plaintiff establishes the prima facie case, the burden shifts to the defendant to show lack of culpable participation or knowledge.” Maher v. Durango Metals, Inc., 144 F.3d at 1306. ANALYSIS The Defendants argue that the Court should dismiss Lane’s Amended Complaint pursuant to rules 9(b) and 12(b)(6). Under rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed. R.Civ.P. 12(b)(6). The sufficiency of a complaint is a question of law, and when considering and addressing a rule 12(b)(6) motion, a court must accept as true all well-pleaded factual allegations in the complaint, and view those allegations in the light most favorable to the non-moving party and draw all reasonable inferences in the plaintiffs favor. See Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir.2006); Housing Authority of Kaw Tribe v. City of Ponca City, 952 F.2d 1183, 1187 (10th Cir.1991). The Supreme Court recently heightened the standards regarding the level of detail with which a complaint must be pled in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, -, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007). These new pleading requirements are not at issue, however, because, as explained below, the Court holds that the pleading standards of the PSLRA are applicable to Lane’s allegations, and those standards are stricter than the rule 12(b)(6) standards. Despite the heightened standards, however, Lane remains entitled to have his allegations assumed to be true for the purposes of these motions to dismiss. The Defendants argue that there are several reasons why the Court should dismiss the Amended Complaint: (i) Lane’s § 14(a) claims are nothing more than repackaged state-law claims that cannot be brought in a federal-securities action; (ii) the PSLRA applies a heightened-standard of pleading with which the Amended Complaint does not comply; (iii) none of the statements or omissions that Lane identifies are materially false or misleading; and (iv) Lane’s § 20(a) claim cannot remain once the Court dismisses the § 14(a) claim. I. LANE’S CLAIMS ARE NOT IMPERMISSIBLE STATE LAW CLAIMS. Santa Fe Industries, Inc. v. Green and its progeny bar a plaintiff from raising certain claims in a federal-securities lawsuit that are essentially state-law claims of corporate mismanagement or breach of fiduciary duties. 430 U.S. at 479, 97 S.Ct. 1292 (“Congress by [§ ] 10(b) did not seek to regulate transactions which constitute no more than internal corporate mismanagement.”) (quoting Superintendent of Insurance v. Bankers Life & Cas. Co., 404 U.S. at 12, 92 S.Ct. 165 (internal quotation marks omitted)). The Defendants contend that “the heart” of Lane’s claims “is that the Directors [of Westland] did not believe that the merger was in the best of interests of shareholders.” Motion to Dismiss at 8. Lane, the Defendants argue, is “im-permissibly attempting to disguise [his] previously-dismissed breach of fiduciary duty/mismanagement claims as a § 14(a) claim by essentially alleging that the Directors failed to disclose some alleged wrongdoing.” Id. at 8-9. Lane counters by stating the claims asserted meet the necessary elements in federal law and that because a claim may be asserted as a state law claim as well as a federal claim does not mean that the federal claim is an impermissible one. See Response at 14, n. 20. Lane is correct; the Amended Complaint raises claims that may also be asserted as state law-claims, but the claims are nonetheless permissible in federal court because they fit within the requirements of § 14(a). Santa Fe Industries, Inc. v. Green and the line of cases following it do not hold that claims cognizable as state-law causes of actions are disqualified from being raised as federal securities claims. Instead, Santa Fe Industries, Inc. v. Green stands for the more modest proposition that corporate mismanagement or breach of fiduciary duty are not actionable under § 10(b) of the 1934 Act simply by virtue of being violations of state-corporate law. See 430 U.S. at 480, 97 S.Ct. 1292. So long as the asserted claim meets the elements of a federal cause of action, it may be brought as a federal-securities claim, even though the underlying facts would also allow it to be brought as a claim under state-corporate law. Santa Fe Industries, Inc. v. Green stated that the alleged breach of duty at issue “was neither deceptive nor manipulative and therefore did not violate either” § 10(b) of the 1934 Act or SEC rule 10b-5. 430 U.S. at 474, 97 S.Ct. 1292. The Supreme Court distinguished the situation before it from earlier cases from other courts which found breaches of fiduciary duties actionable because those breaches involved “some element of deception.” Id. at 475, 97 S.Ct. 1292. Notably, the Supreme Court did not distinguish those earlier cases on the basis that they involved impermissible claims. The District of Columbia Circuit has elucidated a test that accurately captures what Santa Fe Industries, Inc. v. Green requires. As the District of Columbia Circuit stated: “Santa Fe itself declares that ‘the existence of a particular state-law remedy is not dispositive of the question whether Congress meant to provide a similar federal remedy’ under section 10(b).” Kas v. Financial General Bankshares, Inc., 796 F.2d at 512 (quoting Santa Fe Industries, Inc. v. Green, 430 U.S. at 478, 97 S.Ct. 1292). The proper test is that, “if the validity of a shareholder’s claim of material misstatement or nondisclosure rests solely on a legal determination” of state law, then Santa Fe Industries, Inc. v. Green bars the claim from being valid under federal-securities laws. Kas v. Financial General Bankshares, Inc., 796 F.2d at 513. None of the claims raised by Lane would fall within the category of impermissible claims under Santa Fe Industries, Inc. v. Green and related cases. So long as a claim meets the elements of a federal cause of action, it is allowable, unless the claim’s validity turns solely on an issue of state law. In other words, a claim would be barred if it required the Court to find a breach of fiduciary duties or some other violation of state-corporate law to find for Lane. But none of the claims in the Amended Complaint require such a determination. Several of the claims, such as the claim that the directors of Westland falsely stated that they believed the merger to be in the shareholders’ best interests, rest on a foundation that could also support various state-law claims for corporate malfeasance. But such overlap is not fatal or relevant to the claims’ validity as federal causes of action. A single factual scenario may be cognizable as both a violation of federal-securities law and a violation of state-corporate law. The Court will not be required to find that any of the Defendants are in violation of state-corporate laws for Lane’s claims to succeed. The particulars of New Mexico state law are irrelevant to the Defendants’ liability in this case, and the Court does not need to consider New Mexico’s corporate law. Accordingly, Santa Fe Industries, Inc. v. Green is not an obstacle to the claims the Amended Complaint raises. II. THE PSLRA APPLIES TO CLAIMS UNDER § 14(a). There are two separate heightened-pleading provisions of the PSLRA that are at issue: §§ 78u — 4(b)(1) and 78u-4(b)(2). Lane contends that neither section is applicable to this case. The Defendants contend that Lane’s pleadings must satisfy both sections. A. SECTION 78u-4(b)(l) APPLIES TO CLAIMS UNDER § 14(a). Section § 78u-4(b)(l)’s plain language requires that the Court apply it to claims brought pursuant to § 14(a). Lane argues that there is no controlling Tenth Circuit precedent applying § 78u-4(b)(l) to § 14(a) claims, but any argument that the Court should treat § 14(a) actions differently from other securities actions, such as § 10(b) claims, is unpersuasive. The absence of authority in the Tenth Circuit, of course, does not require the Court to find the PSLRA inapplicable. Without any relevant case law or strong reasoning raised contrary to it, the Court must follow the statute’s plain meaning, which would make § 78u-4(b)(l) of the PSLRA apply to Lane’s claims under § 14(a). Section 78u-4(b)(l) applies to “any private action arising under this chapter.” 15 U.S.C. § 78u-4(b)(l) (2008). “[T]his chapter” refers to Chapter 2B of Title 15, which is the codification of the 1934 Act, and which contains § 78n (§ 14(a) of the 1934 Act), the statutory basis for the claims that Lane is asserting. Lane’s claim is therefore a “private action arising under this chapter” by the statute’s plain terms. Before § 78u-4(b)(l) applies, however, a plaintiff must also be making an allegation that the defendants “made an untrue statement of material fact” or “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.” 15 U.S.C. § 78u-4(b)(1). Once again, however, the statute’s plain language embraces Lane’s claims. All of Lane’s claims ultimately depend upon such statements or omissions. Section 78u-4(b)(l) is noticeably devoid of any mental state requirement or other element which would prevent its application to negligently made statements or omissions. That other courts have reached the same conclusion bolsters the conclusion that the statute’s plain language covers negligently made statements or omissions. The Ninth Circuit, for instance, has held that § 78u-4(b)(l), as well as (b)(2), applies to § 14(a) claims. See Knollenberg v. Harmonic, Inc., 152 Fed.Appx. at 682-83. The Third Circuit has also held that the heightened requirements for pleading with particularity apply to § 14(a) claims, at least when they are based on allegations of fraud. See California Public Employees’ Retirement System v. Chubb Corp., 394 F.3d 126, 144-45 (3d Cir.2004). While the Third Circuit was not addressing a negligence claim, there is nothing in the language of § 78u-4(b)(l) to indicate why the Court should treat negligence and fraud claims differently under this particular provision. The statutory language unambiguously encompasses claims such as the § 14(a) negligence claims that Lane asserts. There is no authority, either within the Tenth Circuit or elsewhere, indicating that such claims are not within § 78u-4(b)(l)’s purview. Accordingly, that provision of the PSLRA applies to Lane’ allegations. B. THE COURT NEED NOT DECIDE WHETHER SECTION 78u-4(b)(2) APPLIES TO CLAIMS UNDER § 14(a) THAT ARE BASED ON NEGLIGENCE. There is no Tenth Circuit precedent dictating that the Court rule one way or the other regarding the applicability of § 78u-4(b)(2) to § 14(a) claims premised upon negligence. To the Court’s knowledge, no district court within the Tenth Circuit has squarely confronted the question either. Given the state of the law, the Court need not rule whether § 78u-4(b)(2) applies to a negligence claim asserted under § 14(a), because Lane’s pleadings are sufficient even under the heightened standard, and thus the resolution of this point is not necessary to ruling on the motions. Section 78u-4(b)(2) applies only where a defendant’s “state of mind” is a relevant element of the claim. See 15 U.S.C. 78u-4(b)(2) (“In any private action arising under this chapter in which the plaintiff may recover money damages only on proof that the defendant acted with a particular state of mind ...” then subsection applies.). Tenth Circuit precedent indicates that negligence is not a state of mind, but rather is to be treated as conduct. See United States v. Ortiz, 427 F.3d at 1283. While the context of this precedent is the Clean Water Act and not the PSLRA, there is nothing in the PSLRA or the authorities from other circuits cited by the Defendants that indicates the statute itself meant to define “state of mind” in some unique way. Thus, the precedent in the Tenth Circuit would tend to point to § 78u-4(b)(2) not being applicable to a negligence claim under § 14(a). This conclusion, however, would run contrary to the holding of a number of other courts. The Eighth Circuit has recently reaffirmed that negligence is a state of mind and that § 78u-4(b)(2) does apply to actions brought under § 14(a) alleging negligent misrepresentation. See Little Gem Life Sciences, LLC v. Orphan Medical, Inc., 537 F.3d 913, 916 (finding argument that negligent misrepresentation actions do not involve a state of mind to be “unpersuasive and unsupported by precedent.”)(citing United States v. Robinson, 439 F.3d at 780). Other courts have reached a similar result. See, e.g., Knollenberg v. Harmonic, Inc., 152 Fed.Appx. at 682-83 (citing In re McKesson HBOC, Inc. Securities Litigation, 126 F.Supp.2d at 1267); In re JPMorgan Chase & Co. Securities Litigation, 2007 WL 4531794, at *7 (noting that it agreed with the majority of circuit courts that had considered the issue in holding negligence to b