Full opinion text
ORDER DENYING DEFENDANTS’ MOTIONS TO DISMISS AND DENYING MOTION TO STRIKE DEAN D. PREGERSON, District Judge. This is a securities class action that arises in the wake of the sub-prime mortgage lending crisis and the collapse of one of the industry’s formerly largest sub-prime mortgage lenders, New Century Financial Corporation (“New Century”). Lead Plaintiff New York State Teachers Retirement System (“NYSTRS”) brings this action on behalf of all persons and entities, other than Defendants, who purchased or acquired New Century common stock, New Century Series A Cumulative Redeemable Preferred Stock (“Series A Stock”), New Century Series B Cumulative Redeemable Preferred Stock (“Series B Stock”), and/or New Century call options, or who sold New Century put options, between May 5, 2005 and March 13, 2007 (the “Class Period”). (Comply 1.) Defendants are New Century officers (“Officer Defendants”), its directors (“Director Defendants”), its auditor KPMG (“KPMG”), and the underwriters of the stock offering (“Underwriter Defendants”). Sub-prime lending involves originating and purchasing loans for borrowers considered high-risk by traditional credit and underwriting standards. (Comply 2.) The recent sub-prime mortgage lending crisis has caused many mortgage lending companies — and the value of their stocks — to collapse. New Century became one of the nation’s largest mortgage finance companies by focusing on sub-prime lending. (Compl.li 2.) In 1996, when New Century was formed, it had $357 million in total loan originations and purchases. For the year-ended December 31, 2005, New Century reported $56.1 billion in total loan originations and purchases. (Compl.lffl 55-60.) Sub-prime loans accounted for $32.8 billion, or 62.2% of total loans financed or sold. (Comply 65.) In June 2005 and August 2006, New Century made offerings of the Series A stock and Series B stock respectively. On February 7, 2007, a day before 2006 fourth-quarter and year-end results were scheduled to be released, New Century issued a press release that disclosed a restatement of earnings for the previous three quarters of 2006. New Century stated that material weaknesses in internal controls over financial reporting caused the reporting errors. (Compl.1l 457.) Upon this announcement, New Century stock plummeted by 36% the following day. (Id at ¶459) In the period subsequent to these and additional disclosures, (Id at ¶¶464, 468 — 476), New Century stock further declined. On March 14, 2007, New Century stock closed at $ 0.67 per share, a 97% decline from the over $30 per share prior to the disclosures. (Id at ¶ 9) The Series A and Series B stock likewise fell by 75% during this period. (Id at ¶¶ 9, 478.) Plaintiffs filed this lawsuit alleging securities violations in connection with New Century’s Series A and Series B stock. Plaintiffs maintain that these declines were foreseeable, and that Defendants made numerous material misstatements regarding New Century’s financial situation and business operations. In summary, Plaintiffs allege that Defendants, during the Class Period, misrepresented New Century’s ability to repurchase defaulted loans; overvalued its residual interests in securi-tizations; falsely certified the adequacy of its internal controls, loan origination standards, and the quality of its loans; and failed to identify these problems in public statements, registration documents, audits, or elsewhere. They claim that Defendants’ material misrepresentations and omissions violated Section 11 of the Securities Act of 1933, 15 U.S.C. § 77k. They further claim that the New Century Officer Defendants and KPMG violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. § 78u-4(b), and Rule 10b-5 of the regulations promulgated by the Securities and Exchange Commission (“SEC”). On April 30, 2008, Plaintiffs filed their second amended consolidated class action complaint. There are currently five motions to dismiss and one motion to strike before the Court. The Officer Defendants move to dismiss the securities fraud claims under section 10(b) and Rule 10b-5, as well as the derivative control person liability claims. Officer Defendant Robert Cole files his own motion to dismiss the same claims. The Director Defendants and Underwriter Defendants move to dismiss claims alleging violations of section 11 of the Securities Act of 1933, 15 U.S.C. § 77k, in connection with the Series A and Series B stock. Those motions are joined by the Officer Defendants against whom Plaintiffs also allege violations of section 11 of the Securities Act. Defendant KPMG moves to dismiss the claim against it alleging violations of section 11 of the Securities Act in connection with Series B stock, and the securities fraud claim against it under section 10(b) and Rule 10b-5. Defendant KPMG also moves to strike all references in the Complaint to the Bankruptcy Report. After reviewing the extensive briefing, hearing oral argument, and considering the arguments raised by all parties, the Court denies Defendants’ motions to dismiss and denies Defendant KPMG’s motion to strike. I. BACKGROUND The Court’s review on a motion to dismiss is generally limited to the allegations in the Complaint, taken as true and construed in the light most favorable to the non-moving party. Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir.2000). The following background is derived from Plaintiffs’ second amended complaint (“Complaint”). A. The Parties 1. Plaintiffs Lead Plaintiff New York State Teachers Retirement System (“NYSTRS”) has over 400,000 active members, retirees, and beneficiaries. NYSTRS provides retirement, disability, and death benefits to eligible public school teachers in New York State. NYSTRS purchased New Century common stock during the Class Period and claims to have suffered damages due to the alleged wrongful conduct. (Comply 19.) Plaintiff Carl Larson acquired New Century Series A and B Preferred Stock during the Class Period and claims to have suffered damages due to the alleged wrongful conduct. (Id. at ¶ 20.) Plaintiff Charles Hooten sold New Century put options during the Class Period and claims to have suffered damages due to the alleged wrongful conduct. (Id. at ¶¶ 21.) 2. Defendants On April 2, 2007, New Century filed for Chapter 11 bankruptcy protection. For this reason, the action against New Century has been stayed. (Comply 22.) Plaintiffs assert claims against several other Defendants in this action. To be consistent, the Court follows the categorization from the Complaint: New Century Officer Defendants, New Century Director Defendants, KPMG, and New Century Underwriters. The Officer Defendants were corporate officers of New Century during the Class Period. (CompLIHl 23-26.) The officers’ duties included disseminating prompt, accurate information about the Company’s business, operations, financial statements and internal controls, and correcting any previously issued statements that had become materially untrue. They were involved in drafting, producing, reviewing, and/or disseminating the alleged material misstatements at issue in this case. (Id. at ¶¶ 27-29.) The Director Defendants served as directors of New Century during the Class Period. (Compl.1ffl 30-38.) Each of the Director Defendants either signed the registration statements for Series A and Series B stock, or were directors when the stock was offered to the public. (Id.) Defendant KPMG served as New Century’s outside auditor during the Class Period. (CompU 39.) The Underwriter Defendants are the investment banks that acted as underwriters to the public offerings of New Century stock in June 2005. (Id. at ¶¶ 40-47.) B. New Century’s Mortgage Lending, Whole Loan Sales, and Securitiza-tions New Century primarily originated sub-prime mortgage loans. Sub-prime lending refers to providing loans with typically high interest rates to high-risk borrowers, who may have poor credit histories, the lack of income documentation, or debt. The sub-prime mortgage lending industry collapsed, in part, because high-risk adjustable-rate interest-only loans, and “stated income” loans resulted in increased default rates among borrowers. (CompU 4.) New Century’s business was not limited to originating loans. New Century, like many sub-prime lenders, sought to sell its loans in a secondary market and recognize a “gain on sale” of those loans. New Century either made (1) whole loan sales; (2) securitizations structured as sales; or (3) securitizations structured as “financ-ings.” (ComplA 61.) In whole loan sales, New Century realized gains upon sale of a pool of loans to third-parties. In securiti-zations structured as sales, New Century realized gains by selling a pool of loans to a trust, and receiving cash flows from its residual interests in the securitized pool of loans. In securitizations structured as fi-nancings, New Century did not record a gain on sale when it sold a pool of loans, but rather, received interest income as payments on the mortgages were made. (Compl.lffl 61-64.) C. New Century’s Series A and Series B Preferred Stock Offerings In June 2005, New Century sold its Series A preferred stock, for net proceeds of approximately $109 million. The Underwriter Defendants, excluding Morgan Stanley and Jefferies & Co., provided underwriting for the offering. The Series A stock was sold pursuant to a Form S-3 registration statement and prospectus. These documents are collectively referred to as “Series A Registration Statement.” (CompLIffl 236-238.) The Series A Registration Statement incorporated by reference the following documents: New Century’s quarterly report (Form 10 — Q) for the quarter ended March 31, 2005 and current report (Form 8-K) filed on or around May 5, 2005. (Id. at ¶ 238.) The Form 8-K had a May 5, 2005 press release attached as an exhibit. In August 2006, New Century sold its Series B preferred stock, for net proceeds of approximately $55.6 million. The Underwriter Defendants, excluding Deutsche Bank, Piper Jaffray, JMP Securities, and Roth Capital, provided underwriting for the offering. The Series B stock was also sold pursuant to a Form S-3 registration statement and general prospectus. These documents are collectively referred to as “Series B Registration Statement.” (CompLM 256-258.) The Series B Registration Statement incorporated by reference the following documents: New Century’s annual report (Form 10-K) for the year-ended December 31, 2005, quarterly reports (Forms 10 — Q) for the quarters ending March 31, 2006 and June 30, 2006. (Id. at ¶ 258.) D. New Century’s Disclosures On February, 7, 2007, New Century disclosed that during the first three quarters of 2006, it did not properly discount the allowance for loan repurchase losses “by the amount the repurchase prices exceed the fair values” and “did not properly consider ... the growing volume of repurchase claims that resulted from the increased pace of repurchase requests that occurred in 2006.... ” (Comply 457.) It explained that “earnings-related press releases for those periods should no longer be relied upon” and to expect “a net loss for that period.” (Id.) It further noted that “errors leading to these restatements constitute material weaknesses in its internal control over financial reporting for the year ended December 31, 2006.” New Century additionally explained that adjustments were expected for its residual interests held as securities. (Id.) On March 1, 2007, New Century disclosed that it would be unable to file a timely 2006 year-end financial report (Form 10-K). On March 2, 2007, New Century filed a notification of late filing with the SEC, in which it stated that its Audit Committee had initiated an independent investigation of the issues related to the need for financial restatements; that it expected to conclude that there were material weaknesses in internal control over financial reporting; that modifications to the ALL would result in lower, restated net income for the first three quarters of 2006; that there were declines in earnings and profitability for 2006; and provided additional disclosures, including that the SEC requested a meeting with the company and the U.S. Attorney’s Office had initiated a criminal investigation. (Comply 464.) On March 12, 2007, New Century disclosed that certain lenders discontinued financing for the company, that this would allow lenders to accelerate the company’s obligations to repurchase loans, and that this could total $8.4 billion in repayment obligations. New Century further disclosed that it lacked the liquidity to keep pace with the repurchase requests. (Id. at ¶ 472.) After close of trading on March 13, 2007, the New York Stock Exchange delisted New Century stock. (Id. at ¶ 476.) On May 24, 2007, New Century filed a Form 8-K providing that, in addition to its restatements with respect to 2006, the Audit Committee had found “errors in the Company’s previously filed annual financial statements [for 2005] ... with respect to both the accounting and reporting of loan repurchase losses,” and found it “more likely than not that these errors ... resulted in a material overstatement of pretax earnings ... [such that] the [annual financial statements for 2005] should no longer be relied upon.” (ComplY 482.) The Form 8-K further explained that New Century had overstated its residual interests. (Id. at ¶ 96) On April 2, 2007, New Century filed for Chapter 11 bankruptcy protection. (Id. at ¶ 480.) On February 29, 2008 the Bankruptcy Examiner’s Report was filed, and was publicly released on March 26, 2008. E. Plaintiffs’ Allegations of Material Misstatements and Scienter The Complaint alleges that Defendants were responsible for false and misleading statements regarding New Century’s financial condition, internal controls, underwriting standards and loan quality, and in audits of the company, and improper underwriting and auditing standards. The Complaint further alleges that the Officer Defendants and KPMG’s alleged misrepresentations were fraudulently made. The Complaint asserts that these misstatements caused damages to New Century shareholders. 1. New Century’s Financial Statements and GAAP Compliance Plaintiffs’ Complaint alleges that New Century’s financial statements in 2005 and 2006, during the Class Period, contained a number of false and misleading statements in violation of generally accepted accounting principles (“GAAP”). (ComplJ 66.) First, the Complaint alleges that New Century materially understated its reserve fund for repurchase of loans in default. (Id. at ¶¶ 69-100.) The GAAP required New Century to maintain an allowance for repurchase losses (“reserve”), which provides a reserve to repurchase loans purchased by third-parties in the event of payment defaults by borrowers. (Id. at ¶¶ 70, 457.) Upon repurchase of the loans, New Century was required to list those loans on its balance sheet as “Mortgage Loans Held for Sale”, and to reduce the repurchase reserve by the amount that the repurchase prices exceeded fair value. (Id. at ¶ 70.) In its 2005 Form 10-K, New Century represented that the reserve was “adequate” based on a risk evaluation. (Id. at ¶ 71.) In its disclosures on February 7, 2007, New Century provided that its financial statements for the first three quarters of 2006 were inaccurate because the reserve was understated, due to improper accounting and weak internal controls over financial reporting. (Id. at ¶ 72.) In disclosures on May 24, 2007, New Century further provided that the 2005 financial statements needed restatement due to “errors” in “both the accounting and reporting of loan repurchase losses.” (Id. at ¶ 73.) Based on these disclosures, information provided by several former employees, and additional documents, the Complaint alleges that the reserve was inadequate to keep up with mounting repurchase claims, the reserve was materially understated by tens of millions of dollars during the Class Period, and in effect, this overstated New Century’s income. (Id. at ¶ 74, 91, 95,100.) Second, the Complaint alleges that New Century materially misstated the value of residual interests in securitizations structured as sales. (Id. at ¶ 101.) New Century reflected the present value of residual interests in a securitized pool of loans on its balance sheet. Its quarterly valuation involved an estimation of the effect of delinquencies and defaults on the expected cash flows from these residual interests. (Id. at ¶¶ 102-103.) The February 7, 2007 and May 24, 2007 disclosures referred to “errors” in the valuation of residual interests. (Id. at ¶¶ 105.) The Complaint alleges that the value of New Century’s residual interests were inflated as a result of a failure to account for decreasing loan quality and underwriting standards, and for increased rates of delinquencies and defaults during 2005 and 2006. (Id. at ¶¶ 104-105.) Third, the Complaint alleges that New Century misrepresented its Allowance for Loan Losses (“ALL”), which was a reserve of funds to cover losses on “Mortgage Loans Held for Investment.” (Comply 109-118.) New Century evaluated the ALL based upon “the performance of loans, credit characteristics of the portfolio, the value of the underlying collateral and the general economic environment.” (Id. at ¶ 110.) Yet the ALL was actually decreasing as a percentage of “Mortgage Loans Held for Investment” that were 60 or more days delinquent, and was being reduced as the rate of delinquent loans was rising. (Id. at ¶¶ 111-112.) The Complaint alleges that New Century’s ALL failed to meet GAAP and SEC requirements during the Class Period. (Id. at ¶ 115.) Finally, the Complaint alleges a number of additional GAAP violations related to mortgage servicing rights, deferred origination fees, hedging, and goodwill. These alleged violations are based upon the Bankruptcy Examiner’s report. (Id. at ¶ 119.) 2. New Century’s Underwriting and Loan Quality The Complaint alleges that Defendants made false and misleading statements regarding New Century’s underwriting standards and loan quality. During the Class Period, the Officer Defendants made public statements regarding the company’s “strong,” “excellent,” “very high” credit quality, and that the credit quality was “better” than in the past because the Company used “strict,” “improved,” and “strong” underwriting guidelines. (ComplY 120.) These public statements were contrary to data on increasing defaults. (Id. at ¶¶ 120-121.) Also contrary to these statements, and notwithstanding the increasing interest rates and downturn in the real estate market, the underwriting standards were loosened in order to increase the volume of loans. (Id. at ¶ 125.) The Complaint recites data and confidential witness statements that purport to show the rising rates of delinquent New Century loans, the poor quality of loans issued by New Century, weak internal controls, and lenient loan origination standards. (Id. at ¶¶ 126-168.) The convergence of these factors created a “recipe for disaster!)]” (Id. at ¶ 172.) The Complaint alleges that New Century Officer Defendants touted the company’s internal controls, loan quality, and underwriting standards throughout the Class Period. (CompUt 191.) The Complaint points to specific statements by individual officers. These statements are alleged to have been false and misleading given evidence of inadequate lending practices including significant deficiencies and material weaknesses in internal controls, some which the company admitted and others which were undisclosed. (Id. at ¶¶ 198-194.) The Complaint maintains that these were material misrepresentations, and cannot be explained away by market forces. (Id. at ¶¶ 125-130.) The Complaint further alleges, with respect to the Officer Defendants, that each made knowing and reckless misstatements. Each signed quarterly certifications that the company’s internal controls were adequate. These certifications were made in spite of overwhelming evidence that internal controls and loan quality were inadequate. (Id. at ¶¶ 486^187.) Each also signed the SEC filings attesting that its accounting practices complied with GAAP in relation to the loan repurchase reserve and the reporting of residual interests. Similarly, the Complaint alleges violations of the GAAP in maintenance of the reserve and valuation of residual interests. (Id. at ¶¶ 23-26, 489.) Several statements, such as describing the repurchase requests as “modest”, are alleged to be knowing and reckless misstatements in light of the known rise in defaults and inadequacy of the reserve. (Id. at ¶¶ 438, 452.) Moreover, Defendant Dodge is alleged to have failed to disclose to the Audit Committee a change in the methodology for calculating the repurchase reserve, although she had the opportunity to do so. (Id. at IT 497.) The Officer Defendants received over $50 million in dividend payments as New Century’s loan origination increased. The Complaint further alleges a motivation to enlarge loan volume and reduce repurchase reserves to inflate earnings no matter the risk to the company and its investors. (Id. at ¶¶ 502-514.) 3. KPMG’s Audit Opinions The Complaint alleges that KPMG issued audit opinions regarding (i) New Century’s 2005 year-end financial statements and (ii) New Century’s internal controls as of December 31, 2005, that contained material misstatements in violation of the Public Company Accounting Oversight Board (“PCAOB”) standards. (Comply 206.) Both of these opinions were incorporated into the Series B stock offering. (Id. at ¶ 207.) The PCAOB has adopted the generally accepted auditing standards (“GAAS”). (Id. at ¶ 205.) The GAAS require an auditor to exercise due professional care, to adequately plan its audit, to sufficiently understand a business’s internal structure, and to obtain sufficient evidence to reach reasonable conclusions. (Id. at ¶ 210.) KPMG allegedly failed to adhere to the GAAS by having an inexperienced audit team, (id-¶ 222-223); failed to challenge New Century management for its low discount rates on residual interests or its hedge accounting (id. at ¶ 224-226); failed to test the repurchase reserve despite evidence of internal control weaknesses and apparently inaccurate estimates of outstanding repurchase requests (id. at ¶¶ 227-229); failed to properly identify the flaws in valuation of residual interests (id. at ¶¶ 231-32); and failed to raise deficiencies and inaccuracies in New Century’s accounting practices or internal controls. (Id. at ¶¶ 233-234.) The Complaint further alleges that KPMG’s misstatements were deliberately or recklessly false and misleading. KPMG auditors simply ignored evidence that New Century needed to improve its accounting-practices, including recommendations from other KPMG experts. (Id. at ¶¶ 516-519.) KPMG made conscious decisions to allow inexperienced staff, including first-year auditors in some instances, to conduct analy-ses of accounting and internal controls. (Id. at ¶¶ 520-522.) In 2004, KPMG identified New Century’s failure to adopt appropriate procedures for calculation of the repurchase reserve, but when that problem was again identified in 2005, KPMG still determined that the problem was not a significant deficiency. (Id. at ¶¶523-524.) KPMG identified weaknesses in valuation of residual interests, but accepted New Century’s valuations in spite of evidence that indicated those valuations were predicated on doubtful assumptions. (Id. at ¶¶ 525.) The Complaint sets KPMG’s failure to challenge New Century’s business practices in its audits against the findings of significant deficiencies in 2006 and since. (Id. at ¶¶ 527-528.) F. Plaintiffs Claims This action alleges the following claims: (1) violations of Section 11 of the Securities Act in connection with the Series A stock against the Officer Defendants, the Director Defendants, and the Underwriter Defendants Bear Stearns, Deutsche Bank, Piper Jaffray, Stifel Nicolaus, JMP Securities, and Roth Capital; (2) violations of Section 15 of the Securities Act in connection with the Series A stock against the Officer Defendants for control person liability based upon Section 11 and Section 12(a) violations by New Century; (3) violations of Section 11 of the Securities Act in connection with the Series B stock against the Officer Defendants, the Director Defendants, and the Underwriter Defendants Bear Stearns, Morgan Stanley, Stifel Nicolaus, and Jeffries & Company; (4) violations of Section 15 of the Securities Act in connection with the Series B stock against the Officer Defendants for control person liability based upon Section 11 and Section 12(a) violations by New Century; (5) violations of Section 10(b) of the Exchange Act against the Officer Defendants; (6) violations of Section 20(a) of the Exchange Act against the Officer Defendants; and (7) violations of Section 10(b) of the Exchange Act against KPMG. (Comply 289-340, 551-571.) II. DISCUSSION A. Legal Standard — Motions to Dismiss Federal Rule of Civil Procedure 8(a) provides that a complaint need only contain “(l)a short and plain statement of ... jurisdiction, ... (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks.” Federal Rule of Civil Procedure 9(b) provides that the “circumstances constituting fraud or mistake shall be stated with particularity” in a complaint. Under Federal Rule of Civil Procedure 12(b)(6), a complaint must be dismissed when a plaintiffs allegations fail to state a claim upon which relief can be granted. When considering a 12(b)(6) motion to dismiss for failure to state a claim, “all allegations of material fact are accepted as true and should be construed in the light most favorable to the plaintiff.” Resnick v. Hayes, 213 F.3d 443, 447 (9th Cir.2000); accord Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 127 S.Ct. 2499, 2509, 168 L.Ed.2d 179 (2007). A court properly dismisses a complaint on a Rule 12(b)(6) motion based upon the “lack of a cognizable legal theory” or “the absence of sufficient facts alleged under the cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1988). B. The Organization of the Second Amended Complaint On January 31, 2008, the Court granted Defendants’ motions to dismiss with leave for Plaintiffs to amend their Complaint. The Court’s Order focused almost entirely on its difficulty evaluating whether Plaintiffs stated a claim in light of the organization and length of the Complaint. The Court granted leave to amend so that Plaintiffs could reorganize and revise their allegations with an eye toward clarity. Defendants read this Court’s prior Order to require dismissal here. Having once before dismissed Plaintiffs’ Complaint for lack of organization, Defendants sense that they may again prevail on this basis. Defendants go to great lengths to point out all of the ways that Plaintiffs have failed to comply with the Court’s prior Order, have persisted in drafting disorganized, meandering allegations, and have engaged in “puzzle-pleading.” The Court shares Defendants’ frustration with the length of the Second Amended Complaint. It is truly massive. As the Officer Defendants pointed out at oral argument, the Consolidated Complaint that was subject to the Court’s January 31, 2008 Order ran roughly 100 pages. The Second Amended Complaint weighs in at nearly 375 pages of allegations, with nearly 200 additional pages of charts. Although the Court recognizes that a complicated case necessarily requires a complicated complaint, the Court finds it difficult to fathom that the Complaint could not have been significantly more concise. It appears to the Court that Plaintiffs’ approach in the Second Amended Complaint was to reproduce much of the Bankruptcy Examiner’s Report in the Complaint alongside Plaintiffs’ other allegations. The Court questions whether the Complaint provides manageable roadmap for litigation. Nevertheless, despite these remaining reservations, the Court does not consider its prior Order to serve as a basis for dismissal on the instant motions. The Court finds Plaintiffs’ Second Amended Complaint to be responsive to the concerns with clarity it expressed in the January 31, 2008 Order. The Complaint has been extensively revised. Plaintiffs have both eliminated certain allegations and added additional information. Plaintiffs have provided charts that provide additional structure to allegations of false and misleading statements. And despite the lengthy quotation from the Bankruptcy Examiner’s Report, Plaintiffs’ organization shows that this quotation was deliberate and selective. The Court is now able to evaluate whether the allegations sufficiently state a claim. To the extent that the Complaint fails to identify false and misleading statements, or lacks sufficient particularity when required, the Court will rule accordingly. Any continuing lack of simplicity and conciseness in the allegations will likely hurt rather than help Plaintiffs’ position. This Court, like many others, will not hesitate to dismiss long, unwieldy pleadings. See, e.g., In re Splash Technology Holdings, Inc. Securities Litig., 160 F.Supp.2d 1059, 1073 (N.D.Cal.2001). Neither courts nor defendants should have to wade through the morass of “puzzle pleadings” as this wastes judicial resources and undermines the requisite notice for a defendant to respond. See id. at 1073-75. Yet a long and detailed complaint is not a work of “puzzle pleading” as a matter of law. Furthermore, in the securities class action context, the stringent pleading requirements appear to invite both parties to throw everything and the kitchen sink into their respective pleadings and motions to dismiss. The plaintiff creates an inevitably detailed complaint in anticipation of defendants’ rigorous 12(b)(6) motions, and the plaintiffs expectations are confirmed when defendants in due course file those motions. The plaintiff has the responsibility to craft a clear and concise complaint, but the allegations that discharge this responsibility will depend on the type of action, the specific facts, the number of parties, and other variables. Here, Plaintiffs’ Complaint provides adequate organization and sufficiently clear allegations such that this Court is able to rule on Defendants’ motions, and Defendants have adequate notice of the allegations against them. Is the pleading still long? Yes. Is it still extremely detailed and complex? Yes. Is this by itself a reason to dismiss the complaint? No. Nevertheless, the Court notes that the complexity of pleadings and motions to dismiss in securities cases appears to be endemic. In the future, the Court may consider alternative mechanisms, in addition to the regular noticed motion process, to resolve issues in this case in a manner that streamlines arguments, avoids overlap, and conserves judicial resources. For now, the Court proceeds to review Plaintiffs’ Complaint and Defendants’ motions. C. Defendants’ Requests for Judicial Notice In deciding motions to dismiss, a court may “generally consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice.” Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir.2007). A court may take judicial notice of facts that are “not subject to reasonable dispute.” Fed.R.Evid. 201(b). A court also may consider documents that are referred to in the complaint, that are “central” to the plaintiffs claims, and whose authenticity is undisputed. See, e.g., Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir.1994), overruled on other grounds, 307 F.3d 1119, 1127 (9th Cir.2002). Here, Defendants have requested that the Court take judicial notice of a number of documents, mostly SEC filings. (See Officer Defendants’ Request for Judicial Notice (“RJN”); Officer Defendants’ Suppl. RJN; Underwriter Defendants RJN; Defendant Robert Cole’s RJN; Defendant KPMG’s RJN.) It is well-established that courts may take judicial notice of SEC filings. See Dreiling v. Am. Express Co., 458 F.3d 942, 946 n. 2 (9th Cir.2006). The Court takes judicial notice of the SEC documents submitted by Defendants. The Officer Defendants also request that the Court take judicial notice of the Bankruptcy Examiner’s Report. The Court finds that it may consider the Report either as a document referred to in Plaintiffs’ Complaint or as a document subject to judicial notice. The Underwriter Defendants request judicial notice of excerpts from the Statement of Financial Accounting Standards (“SFAS”). The Court also grants that request. D. Defendant KPMG’s Motion to Strike Under Federal Rule of Civil Procedure 12(f), a court “may order stricken from any pleading ... any redundant, immaterial, impertinent, or scandalous matter.” Motions to strike are not favored and “should not be granted unless it is clear that the matter to be stricken could have no possible bearing on the subject matter of the litigation.” Colaprico v. Sun Microsystems, Inc., 758 F.Supp. 1335, 1339 (N.D.Cal.1991). This is “because of the limited importance of pleadings in federal practice and because [a motion to strike] is usually used as a delaying tactic.” RDF Media Ltd. v. Fox Broad. Co., 372 F.Supp.2d 556, 561 (C.D.Cal.2005). Courts will not grant motions to strike unless “convinced that there are no questions of fact, that any questions of law are clear and not in dispute, and that under no set of circumstances could the claim or defense succeed.” Id. When ruling on a motion to strike, this Court “must view the pleading under attack in the light most favorable to the pleader.” Id. For a motion to strike to be granted, the grounds for the motion must appear either on the face of the complaint or from matters of which the Court may take judicial notice. See SEC v. Sands, 902 F.Supp. 1149, 1165 (C.D.Cal.1995). Here, Defendant KPMG moves to strike all references in the Complaint to the Bankruptcy Examiner’s Report. KPMG argues that Plaintiffs’ reliance on the Examiner’s Report violates their duty under Federal Rule of Civil Procedure 11 to conduct “a ‘reasonable and competent inquiry’ into the facts of the case before signing and filing the complaint.” (KPMG’s Mot. Strike 4 (citing Christian v. Mattel, Inc., 286 F.3d 1118, 1127 (9th Cir.2002))). KPMG points to several cases where a plaintiffs adoption of allegations drawn from non-party’s complaint or report have been stricken, at least until such time as the plaintiff has conducted an independent investigation of those allegations. See, e.g., In re Connetics Corp. Secs. Litig., 542 F.Supp.2d 996, 1004-06 (N.D.Cal.2008) (striking allegations drawn from SEC complaint, but allowing amendment if plaintiff conducted a reasonable investigation into those allegations). Plaintiffs counter that the relevant inquiry is not whether attorneys personally verify allegations from such a report, but rather, whether the source is reliable. See Daou, 411 F.3d at 1015 (finding that “sources relied upon in a complaint should be ‘described in the complaint with sufficient particularity to support the probability that a person in the position occupied by the source would possess the information alleged’ ”). Plaintiffs maintain that the Examiner’s Report is a reliable source. Contrary to KPMG’s cited authority, Plaintiffs point to case law where allegations drawn from a bankruptcy examiner’s report were allowed, and were not stricken. See In re Enron Corp. Secs. Litig., MDL-1446, CV No. H-01-3624, 2005 U.S. Dist. LEXIS 41240, at *23, 2005 WL 3504860, at *6 (N.D.Tex. Dec. 22, 2005). The Ninth Circuit in Daou determined that a plaintiff must state with particularity the sources of information alleged, and that satisfaction of this requirement allows a court to accept allegations issuing from those sources, as long as there are “adequate corroborating details.” Daou, 411 F.3d at 1015 (citations omitted). The court noted that it adopted this standard from the Second Circuit’s decision in Novak v. Kasaks, 216 F.3d 300, 314 (2d Cir.2000). In the Enron litigation, the district court also relied on Novak in allowing the plaintiffs allegations drawn from the bankruptcy examiner’s report. The court explained that the PSLRA does not require a plaintiff to plead facts from personal knowledge, id. at *23 n. 11, 2005 WL 3504860 at *6 n. 11, and indicated that a plaintiff may meet the PSLRA pleading requirements “by providing documentary evidence and/or sufficient general description of the personal sources of the plaintiffs’ beliefs,” id. (quoting Novak, 216 F.3d at 314). The court found that the bankruptcy examiner’s report was documentary evidence, noted the examiner’s statutory obligation to perform a “disinterested” investigation, and thus found that the plaintiff was permitted to rely on the report. Id. at *23 n. 11, *35-40, 2005 WL 3504860 at *6 n. 11, *10-11. Here, Plaintiffs have recited a significant number of statements from the Examiner’s Report. Plaintiffs do not indicate that they have independently investigated the Examiner’s statements in the report. Instead, Plaintiffs emphasize the reliability of the report as a source of information regarding New Century and Defendants’ practices, and that the report only supplements the investigation made in preparation of the Complaint. The Court will allow the allegations drawn from the Examiner’s Report because the allegations are derived from documentary evidence that qualifies as a reliable source for pleading purposes. See Daou, 411 F.3d at 1015; In re Enron Corp. Secs. Litig., 2005 U.S. Dist. LEXIS 41240, at *23 n. 11, 2005 WL 3504860, at *6 n. 11. Plaintiffs are thus entitled to rely on the report in framing allegations to satisfy the PSLRA’s pleading requirements. Although Plaintiffs did not attach the Examiner’s Report as an exhibit to their Complaint, the Court may consider the report because it is referred to in the complaint, is “central” to the plaintiffs claims, and its authenticity is undisputed. See, e.g., Branch, 14 F.3d at 454. The Court has already taken judicial notice of the report. Moreover, as was noted by the Enron court, there is no requirement that consideration of the report be limited to those excerpts quoted by Plaintiffs in their complaint; rather, because the complaint refers to the report, “the Court can view any statement selectively quoted or referenced in the context from which it was drawn to protect against any misrepresentation or misinterpretation.” See In re Enron Corp. Secs. Litig., 2005 U.S. Dist. LEXIS 41240, at *40 n. 20, 2005 WL 3504860, at *11, n. 20. KPMG additionally moves to strike Exhibits D and E to the Complaint, which are the charts requested by the Court in its January 31, 2008 Order. The Court declines to strike the charts. To the extent that Plaintiffs may misrepresent KPMG’s responsibility for any statements, the Court will review the Complaint and the attached exhibits, and make any appropriate determinations. E. Plaintiffs’ Claims Under Sections 10(b) and 20(a) of the Exchange Act Against the Officer Defendants The Private Securities Litigation Reform Act, 15 U.S.C. § 78u-4, requires securities fraud claims to satisfy the heightened pleading requirement “that a complaint plead with particularity both falsity and scienter.” In re Vantive Corp. Sec. Litig., 283 F.3d 1079, 1084 (9th Cir.2002) (citing Ronconi v. Larkin, 253 F.3d 423, 429 (9th Cir.2001)). The PSLRA provides that “the complaint shall specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation ... is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed.” 15 U.S.C. § 78u-4(b)(l). A plaintiff must also “state with particularity ... facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2). The “required state of mind” is “deliberate[ ] reckless[ness] or conscious misconduct.” In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 974 (9th Cir.1999). The facts alleged in a complaint will give rise to a “strong inference” of scienter when it “plead[s] facts rendering an inference of scienter at least as likely as any plausible opposing inference.” Tellabs, Inc., et al. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 127 S.Ct. 2499, 2513, 168 L.Ed.2d 179 (2007). In evaluating whether the pleadings suggest a strong inference of scienter, the Court must consider the allegations in the Complaint “holistically.” Id. at 2511. 1. Section 10(b) of the Exchange Act Section 10(b) of the Securities Exchange Act provides, in part, that it is unlawful “to use or employ in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe.” 15 U.S.C. § 78j(b). Rule 10b-5 makes it unlawful for any person to use interstate commerce: (a) To employ any device, scheme, or artifice to defraud, (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security. 17 C.F.R. § 240.10b-5. The elements of a claim under section 10(b) are (1) the misrepresentation or omission of a material fact, (2) scienter, (3) plaintiffs reliance on the misrepresentation, and (4) damages. See Paracor Finance, Inc. v. General Electric Capital Corp., 96 F.3d 1151, 1157 (9th Cir.1996) (en banc). A plaintiffs complaint must satisfy the PSLRA’s particularity requirements. See In re Silicon Graphics, 183 F.3d at 983. a. Materially False and Misleading Statements Plaintiffs claim three primary categories of misrepresentations that give rise to liability under Section 10(b) and Rule 10b-5: (1) misrepresentations in New Century’s reporting of its earnings, repurchase reserve, and residual interest valuations; (2) misrepresentations of New Century’s internal controls; and (3) misrepresentations of New Century’s loan quality and underwriting. These misrepresentations are alleged to have been made in press releases, investor conference calls and meetings, and SEC 10-Q and 10-K forms. i. Group Pleading Plaintiffs argue that they may rely on the group pleading doctrine for company-issued press releases. (Opp. at 33-34.) The Officer Defendants contest the viability of the group pleading doctrine. A question not decided by the Supreme Court in Tellabs, and that remains open within the Ninth Circuit, is whether group pleading remains viable after the PSLRA. See Tellabs, 127 S.Ct. at 2511 n. 6. A judicially-created way of satisfying the particularity requirement of Rule 9(b), the group pleading doctrine establishes a presumption, for purposes of drafting a complaint, that statements in “group-published information” such as prospectuses, registration statements, annual reports, or press releases are “the collective work of those individuals with direct involvement in the day-to-day affairs of the company.” In re Silicon Graphics, Inc. Sec. Litig., 970 F.Supp. 746, 759 (N.D.Cal.1997) (quotations and citation omitted); In re Glen-Fed, Inc. Sec. Litig., 60 F.3d 591, 593 (9th Cir.1995). The courts that have considered whether the group pleading doctrine still stands in the wake of the PSLRA have come to conflicting conclusions. The Ninth Circuit has not expressly rejected the group pleading doctrine, and some courts still apply it. See, e.g., In re Secure Computing Corp. Sec. Litig., 120 F.Supp.2d 810, 821-22 (N.D.Cal.2000); In re BP Prudhoe Bay Royalty Trust Sec. Litig., No. 06-1505, 2007 U.S. Dist. LEXIS 83007, 2007 WL 3171435 at *7 (W.D.Wash.2007) (listing cases). The trend, however, is against the continued viability of the doctrine. All of the Circuit courts that have expressly considered whether group pleading is compatible with the PSLRA have concluded that it is not. See Winer Family Trust v. Queen, 503 F.3d 319, 334-37 (3d Cir.2007); Makor v. Tellabs, 437 F.3d 588, 602-03 (7th Cir.2006), overruled on other grounds by Tellabs, 127 S.Ct. at 2511 n. 6; South-land Secs. Corp. v. INSpire Ins. Solutions, Inc., 365 F.3d 353, 365-66 (5th Cir.2004). Additionally, several district courts have refused to apply the group pleading doctrine after Tellabs, and the majority of reported district court cases in the Ninth Circuit appear to hold that the doctrine is no longer viable. See, e.g., In re Impac Mortgage Holdings, Inc. Sec. Litig., 554 F.Supp.2d 1083, 1092 (C.D.Cal.2008); In re Amgen Secs. Litig., 544 F.Supp.2d 1009, 1036-37 (C.D.Cal.2008); In re Hansen Natural Corp. Sec. Litig., 527 F.Supp.2d 1142, 1153-54 (C.D.Cal.2007). Those courts that have found the group pleading doctrine in conflict with the PSLRA have tended to rest their analysis on two points. First, they emphasize the statute’s use of “the defendant.” See In re Immune Response Sec. Litig., 375 F.Supp.2d 983, 1029 (S.D.Cal.2005); Southland, 365 F.3d at 364-65. That is, the PSLRA expressly requires that the untrue statements or omissions be set forth with particularity as to “the defendant,” and that “with respect to each act or omission alleged to violate this chapter, [the complaint must] state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(1),(2); Southland, 365 F.3d at 364-65 (“These PSLRA references to ‘the defendant’ may only reasonably be understood to mean ‘each defendant’ in multiple defendant cases, as it is inconceivable that Congress intended liability of any defendants to depend on whether they were all sued in a single action or were sued each alone in several separate actions.”). Second, they argue that the continuation of the group pleading doctrine would undermine the effectiveness of the PSLRA. By enacting the PSLRA, Congress intended to impose heightened pleading requirements for plaintiffs bringing fraud actions and, in doing so, to erect a hurdle that would protect against unmeritorious litigation. See Tellabs, 127 S.Ct. at 2508. If courts wére to allow plaintiffs to impute misstatements or intent from one defendant to another, courts have reasoned, plaintiffs would be able to skirt the heightened pleading standards by making detailed allegations against one defendant and imputing those statements to other defendants. Immune Response, 375 F.Supp.2d at 1029-30. The courts have qualified this ban on group pleading, however, by leaving open the possibility that, even when allegedly problematic statements do not have a stated author, plaintiffs may still meet the requirements of the PSLRA by alleging facts that connect a particular defendant to an otherwise unattributed press release. See Southland, 365 F.3d at 365 (“[Corporate documents that have no stated author or statements within documents not attributed to any individual may be charged to one or more corporate officers provided specific factual allegations link the individual to the statement at issue.”). The Court is persuaded by this reasoning. Joining the majority of other courts in this Circuit, the Court holds that group pleading is no longer viable under the PSLRA. Thus, to the extent Plaintiffs’ allegations attributing statements to the Officer Defendants rest solely on the group pleading doctrine, the Complaint does not sufficiently plead liability for those statements. While the group pleading doctrine is not fatal to allegedly misleading statements in SEC filings signed by the Officer Defendants, see Howard, 228 F.3d at 1061-62, the Officer Defendants cannot be liable for the press releases, except to the extent there are specific statements attributed to them, or the press releases are otherwise connected to them, see Southland, 365 F.3d at 365. Because the Complaint alleges violations of statements for each of the Officer Defendants that do not rest on the group pleading doctrine, this holding does not preclude any of the Officer Defendants from liability- ii. Loan Quality and Underwriting The Complaint alleges material misstatements regarding loan quality and underwriting. In a number of documents, New Century is described, for example, as having loans of “higher credit quality,” “improved underwriting controls and appraisal review process,” “a strategy [of selecting borrowers with increasing credit scores],” “strict underwriting and risk management disciplines,” and “better credit quality.” (See, e.g., Compl.¶¶ 343, 344, 347, 358, 361, 364, 387, 388, 405, 422, 443.) The Complaint ushers an array of confidential witness statements that attest to New Century’s progressively riskier loan origination practices leading up to and throughout the Class Period (Compl.lffl 137-168); analyzes data indicating rising defaults and delinquent loans (Compl.1ffl 120-125); and sets forth data, that corroborates the witnesses, showing a proliferation of high-risk loans such as adjustable-rate mortgages provided to less-qualified borrowers (Compl.1ffl 126-136.). The pleadings adequately support a finding that these statements were false and misleading when made. Two recent district court cases in the Ninth Circuit have found similar statements regarding loan quality and underwriting to provide a basis for actionable securities law violations. In re Countrywide Fin. Corp. Derivative Litig., 542 F.Supp.2d 1160 (C.D.Cal.2008); Atlas v. Accredited Home Lenders Holding Co., 556 F.Supp.2d 1142, 1149 (S.D.Cal.2008). This Court likewise agrees that these statements are actionable, and that Plaintiffs’ Complaint alleges sufficient facts that the statements were material misrepresentations of New Century’s loan quality and underwriting practices. The Officer Defendants specifically challenge Plaintiffs’ allegations that statements about loan quality and underwriting were false when made. The Officer Defendants first argue that Plaintiffs are unable to allege material false statements when New Century disclosed data to the public revealing the nature of its loan portfolio and included cautionary language in stock offering documents. It is also asserted in the Officer Defendants’ and Defendant Cole’s motions, and more fully articulated in the Underwriter Defendants’ motion, albeit in the Section 11 context, that Plaintiffs cannot challenge “forward-looking statements” and that statements of “mere puffery” do not qualify as actionable misstatements. The “bespeaks caution” doctrine is a limit on defendant’s liability under the securities laws. This doctrine “developed to address situations in which optimistic projections are coupled with cautionary language ... affecting the reasonableness of reliance on and the materiality of those projections.” In re Worlds of Wonder Sec. Litig., 35 F.3d 1407, 1414 (9th Cir.1994). The PSLRA’s safe harbor provision, which is the codified equivalent of the “bespeaks caution” doctrine, see Employers Teamsters Local Nos. 175 & 505 Pension Trust Fund v. Clorox Co., 353 F.3d 1125, 1132 (9th Cir.2004), provides that forward-looking statements cannot be the basis for a securities fraud claim if: (1) the statement is identified as forward looking and is accompanied by sufficient cautionary statements; or (2) the person who made the forward-looking statement did so without actual knowledge that the statement was false or misleading. See 15 U.S.C. § 78u-5(c)(l)-(2). Similarly, statements that “are vague and constitute run-of-the-mill corporate optimism on which no reasonable investor would rely” fall into this category. Copper Mountain, 311 F.Supp.2d at 869. The Court cannot determine as a matter of law that the PSLRA’s safe harbor provision is applicable to the statements regarding loan quality and underwriting. A “forward-looking statement” “is any statement regarding (1) financial projections, (2) plans and objectives of management for future operations, (3) future economic performance, or (4) the assumptions ‘underlying or related to’ any of these issues.” No. 84 Employer-Teamster Jt. Council Pension Trust Fund v. Am. W. Holding Corp., 320 F.3d 920, 938 (9th Cir.2003). The statements here, when made, seem to have concerned explanation of New Century’s then-current loan origination, underwriting, and performance, at times in relation to the past. Moreover, the references to generalized cautionary language regarding the sub-prime industry appear largely unrelated to whether the alleged statements here were false and misleading. The inconclusive nature of these references cannot support dismissal at the pleading stage. See Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 947 (9th Cir.2005) (“Dismissal on the pleadings under the bespeaks caution doctrine ... requires a stringent showing: There must be sufficient ‘cautionary language or risk disclosure’ [such] that reasonable minds could not disagree that the challenged statements were not misleading.”). The Court therefore similarly cannot resolve application of the PSLRA safe harbor provision in favor of Defendants at this time. The Court also finds that the alleged statements cannot be chalked up to “mere puffery.” The allegations suggest New Century’s repeated assurances of strong credit quality and strict underwriting practices. Even in the sub-prime world, there must be a basis for distinction between loans to at-risk borrowers that meet basic standards of good lending practice and loans that plainly do not. Those standards may provide the measure for evaluating Defendants’ statements. Here, Plaintiffs offer New Century’s statements that it observed standards of high-quality credit and underwriting, and set those statements against detailed allegations of practices that utterly failed to meet those standards. That is sufficient to plead false and misleading statements. iii. Financial Reporting and Internal Controls The Court finds sufficient allegations of materially false and misleading statements in financial reporting. The Complaint details reported information on financial results, the repurchase reserve, and valuation of residual interests, coupled with disclosures in the 2005 10-K, and elsewhere, that those reports were inaccurate. The disclosures support the allegation that the financial reports were false and misleading when made. These disclosures specifically mentioned a failure to track repurchase claims and problems with internal controls as reasons for the inaccurate statements. The Court similarly finds the disclosures referenced in the Complaint sufficient to support the allegations that Officer Defendants made material false and misleading statements regarding the adequacy of internal controls during the Class Period. The Court does not consider the PSLRA safe harbor or the “mere puffery” rule to bar Plaintiffs from pleading Defendants’ liability for alleged misrepresentations regarding internal controls and accounting violations. There certainly may be a dispute whether the statements of repurchase reserves and residual interests were representations articulating the present state of historical facts, or rather projections estimating a future state of affairs. That dispute notwithstanding, Plaintiffs have alleged an understatement of the repurchase reserve and an improper valuation of residual interests that were both misrepresentations when made. The Complaint details declining loan performance, an increase in defaults, and a concomitant rise in repurchase claims, that were baldly disregarded in setting the reserve and valuing residual interests. This suggests misrepresentations that did not turn on the outcome of future events. Based on Plaintiffs’ allegations, the rule barring liability for “forward-looking” statements or “mere puffery” does not warrant dismissal at this time. b. Scienter The Ninth Circuit treats falsity and scienter as “a single inquiry, because falsity and scienter are generally inferred from the same set of facts.” In re Read-Rite Corp. Sec. Litig., 335 F.3d 843, 846 (9th Cir.2003); Ronconi v. Larkin, 253 F.3d 423, 429 (9th Cir.2001). This inquiry requires that a district court on a motion to dismiss “determine whether particular facts in the complaint, taken as a whole, raise a strong inference that defendants intentionally or [with] deliberate recklessness made false or misleading statements to investors.” Ronconi, 253 F.3d at 429 (internal quotations omitted). A district court must address competing inferences, whether favorable to the plaintiff or not, that may be inferred from the facts in the complaint. Daou, 411 F.3d at 1022. The inference of scienter must be “more than merely plausible or reasonable — it must be cogent and at least as compelling as any opposing inference of nonfraudulent intent.” Tellabs, 127 S.Ct. at 2504-05. However, it need not be the “most plausible of competing inferences.” Id. at 2510. “To meet this pleading requirement [for scienter], the complaint must contain allegations of specific contemporaneous ‘statements or conditions’ that demonstrate the intentional or the deliberately reckless false or misleading nature of the statements when made.” Ronconi 253 F.3d at 432; cf. Metzler Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d 1049, 1065-69 (9th Cir.2008) (analyzing the scienter inferences with respect to individual allegations, and then as a whole). The Ninth Circuit recently addressed the PSLRA’s scienter requirement and the Supreme Court’s opinion in Tellabs in South Ferry LP, No. 2 v. Killinger, 542 F.3d 776 (9th Cir.2008). In light of Tellabs, the South Ferry court explained, a court assessing whether a complaint raises a strong inference of scienter considers the complaint as a whole, though a high level of detail is still required. South Ferry, 542 F.3d at 784. That is, “Tellabs permits a series of less precise allegations to be read together to meet the PSLRA requirement, the prior holdings of [the Ninth Circuit in] Silicon Graphics, Vantive, and Readr-Rite notwithstanding.” Id. With respect to allegations relying on an inference of scienter from knowledge of the company’s core operations, the South Ferry court explained that [Allegations regarding management’s role in a company may be relevant and help to satisfy the PSLRA scienter requirement in three circumstances. First, the allegations may be used in any form along with other allegations that, when read together, raise an inference of scienter that is “cogent and compelling, thus strong in light of other explanations.” ... Second, such allegations may independently satisfy the PSLRA where they are particular and suggest that defendants had actual access to the disputed information____ Finally, such allegations may conceivably satisfy the PSLRA standard in a more bare form, without accompanying particularized allegations, in rare circumstances where the nature of the relevant fact is of such prominence that it would be “absurd” to suggest that management was without knowledge of the matter. Id. at 785-86 (internal citations omitted). The parties dispute the nature of the Court’s inquiry into scienter at the 12(b)(6) stage. The Officer Defendants urge the Court to analyze scienter separately as to each violation and each defendant. Plaintiffs emphasize the language in Tellabs that “the court’s job is not to scrutinize each allegation in isolation but to assess all the allegations holistically.” 127 S.Ct. at 2511. As noted above with respect to group pleading, see § II(E)(l)(a)(i), supra, the PSLRA’s heightened pleading standard appears to require individualized allegat