Full opinion text
ORDER ROBERT C. BROOMFIELD, District Judge. Introduction Since the publication of a series of Wall Street Journal articles in March 2006, “reporting academic research suggesting that various companies were suspiciously lucky in selecting their option grant dates[,]” In re MIPS Technologies, Inc., 2008 WL 3823726, at *2 (N.D.Cal. Aug.13, 2008), countless lawsuits have been filed across the country alleging backdating of stock options. This is one such lawsuit. Lead plaintiff, Pension Trust Fund for Operating Engineers (“plaintiff’), “a $3.17 billion pension fund[,]” First Amended Complaint (“FAC”) (doc. 71) at ¶ 16, brings this lawsuit against Apollo Group, Inc. (“Apollo”), “the largest accredited post secondary education institution in the United States[.]” Farrell Decl’n (doc. 80), exh. 2 thereto at 9. Also named as defendants are various individuals who were Apollo officers and directors between November 28, 2001, and October 18, 2006 (“the Class Period”). Background I. Overview of Claims Basically, plaintiff alleges that defendants “intentionally manipulated stock option grants to [Apollo’s] officers, directors and employees ... to provide the[m] ... with a more profitable exercise price and to under-report [Apollo’s] expenses and thereby overstate [Apollo’s] earnings.” FAC (doc. 71) at ¶ 2. That allegedly fraudulent backdating occurred in three ways. First, defendants “violate[d] the terms of [Apollo’s] stock option plan[.]” Id. at ¶ 5(a). Second, they “misrepresented] how the options [we]re priced[.]” Id. at ¶ 5(b). Third, defendants “fail[ed] to properly record expenses associated with these option grants under GAAP [Generally Accepted Accounting Principles].” Id. at ¶ 5(c). As a result of this alleged backdating “scheme, Apollo [was] forced to restate its previously filed financial statements for fiscal years 2001 through the second quarter of 2006 by over $59 million[.]” Id. at ¶2. That “scheme” likewise purportedly “caused” Apollo to issue “materially false and misleading” financial statements during the Class Period, “resulting in an artificial inflation of [Apollo’s] stock price, the disclosure of which caused investors to lose hundreds of millions of dollars.” Id. Through this “scheme,” defendants also supposedly “concealed that Apollo was not recording material compensation expenses and was materially overstating its net income and earnings per share, in violation of ... [GAAP].” Id. During the Class Period plaintiff purchased Apollo stock which, in light of the foregoing, it alleges was purchased at artificially inflated prices. Plaintiff alleges violations of §§ 10(b) and Rule 10b-5, 20(A) (a), and 20(a) of the Securities and Exchange Act of 1934 (“Exchange Act”), as amended by the Private Securities Litigation Reform Act of 1995 (“the PSLRA”), against all defendants. It further alleges that all defendants violated a host of fiduciary duties under Arizona state common law “and/or aided and abetted” in the violation of those duties. Id. at 94. Lastly, plaintiff alleges that defendants Nelson, Blair, Norton, Gonzales, Ba-chus and Mueller engaged in a “civil conspiracy to commit fraud[J” Id. at 95. Currently pending before the court is Apollo’s motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) (doc. 81), and the individual defendants’ motions to dismiss on that same basis (doc. 82). Additionally, Apollo and the individual defendants have each filed a “Request for Judicial Notice” (“RJN”) (docs. 79 and 83), which plaintiff does not oppose. II. Overview of Allegations As the court in In re New Century, 588 F.Supp.2d 1206 (C.D.Cal.2008), astutely observed, “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.” Id. at *9. This case is no different. In an effort to separate the wheat from the chaff, at the outset the court will summarize plaintiffs allegations. It will then go on to consider each of defendants’ numerous dismissal arguments. The following facts, which the court must “accept[] as true” on these motions to dismiss, are derived from the FAC. See South Ferry LP, No. 2 v. Killinger, 542 F.3d 776, 782 (9th Cir.2008) (citation omitted). Additionally, as explained below, these facts are also derived from various documents which the FAC either incorporates by reference or of which the court may properly take judicial notice. From these documents, the following general picture emerges of Apollo’s stock option grant process during the Class Period. More details will be provided herein as necessary to resolve these motions to dismiss. Defendants vigorously deny that they engaged in fraudulent backdating of stock options. Rather, as Apollo depicts it, the Company merely “failed ... to dot all ‘i’s and cross all ‘t’s when completing the paperwork necessary to grant stock options.” Mot. (doc. 81) at 7. The individual defendants similarly maintain that at most “innocent accounting errors[]” were made. Mot. (doc. 82) at 13. Given these widely divergent views of Apollo’s stock option grant practices, before turning to the specific allegations in the FAC, an overview of stock option grants in general is warranted. A. The Rudiments of Stock Option Backdating In re CNET Networks, Inc., 483 F.Supp.2d 947 (N.D.Cal.2007), provides a succinct description of “the mechanics of stock-options backdating!],]” from which this court will heavily borrow. See id. at 949. When a company grants a stock option to an employee, that employee has “the right to purchase the stock at the exercise price at a later date after the option vests.” Id. at 949. The “exercise price” is simply a pre-determined or designated price at which the underlying security may be purchased. See FAC (doc. 71) at 1, ¶ 3. Due to that later vesting date, “[i]f the stock price rises, the employee stands to make a profit.” CNET Networks, 483 F.Supp.2d at 949. Conversely, “[i]f the stock price falls below the exercise price, the option is worthless to the employee.” Id. So-called “at-the-money” options are those “where the exercise price is at the market price as of the date of the grant[.]” Id. On the other hand, “in-the-money” options, which the FAC alleges were the type granted here, are those “where the exercise price is lower than the market prices as of the grant date[.]” Id. The distinction between these two types of options is significant for financial reporting purposes. Companies must “record compensation costs for granting in-the-money options because the company effectively receives a lower price than it could get for the shares on the open market[.]” Id. Not recording such options, as the FAC alleges, results in overstating a company’s net income. See FAC (doc. 71) at 4, ¶ 8. On the other hand, there is no need to record compensation costs “for at-the-money options because the exercise price is the same as the market price.” CNET Networks, 483 F.Supp.2d at 949. Consequently, “[t]he company is not foregoing any revenue.” Id. “Backdating occurs when the option’s grant date is altered to an earlier date with a lower, more favorable price to the recipient.” Id. at 950. This “[b]aekdating is done to avoid compensation expenses.” Id. at 956. B. Apollo Stock Option Grants Like many publicly held companies, as part of its compensation plan, Apollo granted stock options to its executives and employees. Plaintiff alleges that Apollo engaged in impermissible stock option backdating under two separate compensation plans whereby it awarded “Management Grants” — the Long Term Incentive Plan (“LTIP”) and the 2000 Stock Incentive Plan. See FAC (doc. 71) at ¶ 41. Under the LTIP, between June 1994 to March 24, 2000, “Apollo issued stock option grants to Section 16 officers!].]” Id. at ¶ 42. The LTIP expressly required that the exercise price of “Incentive Stock Option[s]” [ (“ISO) ]” thereunder could “not be less than the Fair Market Value of a share of [s]tock on the date of [the] grant[.]” Id. at ¶ 42 (internal quotation marks and citation omitted). That limitation on the exercise price pertained only to ISOs, however. As to other stock options, the LTIP allowed the Compensation Committee to determine the exercise price, with no mention of fair market value. Id., exh. B thereto at ¶ 7.1(a). The LTIP also required that both members of that Committee, defendants Norton and Blair, approve all grants made thereunder. Id. at ¶¶ 42; 22 and 23. “After March 24, 2000, ... Management Grants” were awarded pursuant to the 2000 Plan. Id. at ¶ 43. That Plan required grant approval by the two member Compensation Committee, ie. defendants Blair and Norton, “or by both the President and CEO[,]” which during the relevant time frame was the same person, defendant Nelson. Id. The FAC further alleges that “both Nelson and the Compensation Committee” approved backdated grants “during the relevant period.” Id. (emphasis added). Defendant Nelson had the “authority to approve” option grants under the 2000 Plan for not only other employees, but also for himself. Id. The 2000 Plan differed somewhat from the LTIP in terms of the exercise price. Like the LTIP, the exercise price for any ISO could “not be less than the Fair market Value as of the date of the grant.” Id., exh. C thereto at ¶ 7.2(a). As for certain other options, however, the Compensation Committee could grant options “with an exercise price of less than Fair Market Value on the date of grant.” Id., exh. C thereto at ¶ 7.1(a). Quoting directly from the Restatement, the FAC alleges that the process of granting stock options at Apollo “followed a similar pattern each year[,]” with the initial development of a “list of grantees.” Id. at 63, ¶ 106. In the ensuing weeks, adjustments would be made as to names, shares and “underlying vesting goals ... developed.” Id. at 64, ¶ 106. At times during this process there was insufficient documentation as to when, for example, certain grants were actually finalized. See generally id. at 63-67, ¶ 106. As defendants characterize it, these “documentation errors led Apollo to recognize additional compensation expenses of $52.9 million before tax for the years 1994 to 2005.” Mot. (Doc. 82) at 9 (citing FAC at 63). Despite defendants’ depiction of the grant process at Apollo, plaintiff alleges that on June 28, 2006, “the truth beg[a]n to emerge” regarding Apollo’s alleged backdating scheme. FAC (doc. 71) at 56, VII. On that date, a Lehman Brothers analyst “published a report titled, ‘Did Apollo Backdate Options?’[J” Id. at ¶ 89. Based upon an indication in that Report that “Apollo!’s] ... option grant history looks highly questionable [,]” the FAC alleges, “Apollo’s stock price fell 2.7%” from the preceding day. Id. at ¶ 89 (internal quotation marks omitted) (emphasis added in FAC). Apollo responded by issuing a news release stating, among other things, that after an internal review of its stock option practices “Management believes that it has complied with all applicable laws, ... in granting options to officers and it has not backdated options.” Farrell Decl’n (doc. 80), exh. 3 thereto at 3; see also FAC (doc. 71) at ¶ 91. Apollo further signaled its intent “to hire an outside firm to review and confirm [Apollo’s] conclusions.” Id. Several weeks later, on June 19, 2006, Apollo “disclosed that it had received a subpoena from the U.S. Attorney for the Southern District of New York requesting documents relating to [its] stock option grants.” FAC (doc. 71) at 58, ¶ 92. Shortly thereafter, on June 28, 2006, defendant John Sperling, at the time Apollo’s Acting Executive Chairman, and defendant Peter Sperling, Apollo’s Senior Vice President, “appointed a[S]pecial [Committee ... of the Board to oversee a review of’ Apollo’s stock option grant practices. Id. at ¶ 93. Defendant Hedy Govenar was one of two Apollo Board members appointed to that Special Committee. Id. The Special Committee “retain[ed] independent legal counsel, who in turn, retained forensic accountants, to assist them in conducting an independent review of [Apollo’s] historical practices related to stock option grants[.]” Morrison Decl’n (doc. 83), exh. 1 thereto at 5. Soon after the formation of the Special Committee, Apollo “received a letter from the SEC [Securities Exchange Commission] announcing an informal investigation and requesting documents.” FAC (doc. 71) at ¶ 94 (footnote omitted). Due to that “ongoing investigation[,]” on July 13, 2006, “Apollo announced that ... it was unable to timely file with the SEC its [fourth quarter] Form 10-Q[.]” Id. at ¶ 95 (internal quotation marks omitted). Plaintiff alleges that Apollo’s stock dropped “23.5% from a close of $55.47 on June 8, 2006, to a close of $43.51 on August 8, 2006, in significant part due to the[se] disclosures of backdating.” Id. at ¶ 96. On October 18, 2006, Apollo “issued a news release and disappointing earnings announcement[.]” Id. at ¶ 98. The alleged import of those statements is that “for the first time, and in contrast to Apollo’s previous denials, ... ‘various deficiencies in the process of granting and documenting stock options have been identiñed to date. The accounting impact of these matters has not been quantified. There can be no assurances that the results of the investigation will not require a possible restatement of the Compang’s financial statements when the potential errors are quantified and assessed.’ ” Id. (emphasis added in FAC). Following that announcement, Apollo’s stock price fell “22.0% in one day to a 4-year low of $37.55[.]” Id. C. Special Committee Results On November 3, 2006, Apollo “announced the [Special Committee’s] interim factual findings[.]” Id. at ¶ 99. Those findings “identified various deficiencies” in terms of “the process of granting and documenting stock options.” Id. Among those deficiencies were Apollo’s failure to “correctly apply the requirements of Accounting Principles Board ... Opinion No. 25 [ (‘APB 25’) ] [;]” its misapplication of the Internal Revenue Service (“IRS”) Code “with respect to the contemporaneous tax treatment of certain stock options[;]” and “inaccurate documentation concerning the date that grant award lists were completed and approved.” Id. Despite those deficiencies, at that juncture the Special Committee “found no direct evidence that the grant date for any of the large management grants was selected with the benefit of hindsight.” Morrison Decl’n (doc. 83), exh. 3 thereto at 3. Acknowledging the “possibility” in “two instances” that “the grant date was retroactively selected,” nonetheless, Apollo stated that there was “insufficient evidence at th[at] time to reach such a conclusion.” Id. On that same date, Apollo announced that its Chief Financial Officer and Treasurer, defendant Gonzales, had resigned two days earlier, on November 1, 2006. FAC (doc. 71) at ¶ 99. Following the Special Committee’s announcement, the FAC alleges that “Apollo’s stock price dropped another 2.72%[.]” FAC (doc. 71) at ¶ 100. A few days later, on November 9, 2006, Apollo announced another resignation— the November 5, 2006 resignation of defendant Bachus, Apollo’s Chief Accounting Officer and Controller. Id. at ¶ 102. Allegedly, “Bachus resigned as a result of his involvement in the backdating at Apollo[.]” Id. (citation omitted). During this roughly one week period in early November 2006, plaintiff claims that Apollo’s “stock price declined 6.2%” — a decline which it specifically alleges was “not due to market or industry-specific events.” Id. at ¶ 103. On December 8, 2006, the Special Committee “presented their final factual findings” to Apollo’s Board, findings which “were largely consistent” with the interim findings outlined above. Morrison Decl’n (doc. 83), exh. 4 thereto at 3. Additionally, the Special Committee “reported ... that certain former officers took steps that may have been intended to mask failures in the grant approval process with respect to [Apollo’s] financial reporting and payment of taxes.” Id. The Special Committee further advised the Board that it had “recently discovered additional evidence that raise[d] questions whether another grant date” besides the two mentioned earlier, “may have been retroactively selected by a day[,]” but the Committee stated that there was “insufficient evidence to reach such a conclusion.” Id. Nonetheless, at that time Apollo determined that it had “understated its allowance for doubtful accounts” and had an “associated bad debt expense of approximately $34 million.” Id., exh. 4 thereto at 4. The next trading day, after this information was filed with the SEC, the FAC alleges that Apollo’s stock price “declined by 3.59%[.]” FAC (doc. 71) at ¶ 105. D. Restatement Roughly six months after the Special Committee released its final findings, on May 22, 2007, Apollo filed with the SEC “its belated Form 10-K containing restated financial results [ (‘the Restatement’) ]. Id. at ¶ 106. The FAC contains large block quotes from the Restatement making it difficult to ascertain exactly what parts thereof plaintiff deems pertinent to its claims. Suffice it to say for now that the Restatement indicates that Apollo ‘used incorrect measurement dates for accounting purposes[]’ for 57 of the 100 total grants made during this time period[,]” Id. at 62, ¶ 106. “As a result, revised measurement dates were selected for many grants and resulted in exercise prices that were less than the fair market value of the stock on the most likely measurement dates[,]” and Apollo “restated [its] financial resultfs] to record additional share based compensation expense.” Id. at 63, ¶ 106; and at 69, ¶ 106. Overall, the “Impact of the Restatement!,]” was that Apollo’s “retained earnings as of September 1, 2003,” were “adjusted” downward from $765.2 million to $702.7 million. Morrison Decl’n (doc. 83), exh. 1 thereto at 15. On July 3, 2007, Apollo announced that the SEC had “completed its investigation and ... [it] d[id] not intend to recommend any enforcement actionf.]” Farrell Decl’n (doc. 802), exh. 1 thereto at 2; see also FAC (doc. 71) at ¶ 94 n. 4. Several months after the filing of the Restatement, but prior to the completion of that SEC investigation, on November 2, 2006, this action was commenced. Approximately one year later, following the appointment of lead plaintiff and lead counsel, on November 23, 2007, the complaint which is the subject of these dismissal motions was filed. Discussion I. Scope of Documents Considered A. Defendants ’ Requests Preliminarily, the court will address defendants’ requests for consideration of documents beyond the complaint. The court will proceed in this way because “as a general rule, a district court may not consider materials not originally included in the pleadings in deciding a Rule 12 motion.” U.S. v. 14.02 Acres of Land More or Less, 530 F.3d 883, 894 (9th Cir.2008) (internal quotation marks and citation omitted). “When ruling on a Rule 12(b)(6) motion to dismiss, if a district court considers evidence outside the pleadings, it must normally convert the 12(b)(6) motion into a Rule 56 motion for summary judgment, and it must give the nonmoving party an opportunity to respond.” U.S. v. Ritchie, 342 F.3d 903, 907 (9th Cir.2003) (citations omitted). There are two exceptions to these general rules. The first is the incorporation by reference doctrine; and the second is the doctrine of judicial notice. Under either of those doctrines, a court may consider certain matters beyond the complaint, without converting a motion to dismiss into a summary judgment motion. See id. at 908 (citations omitted). Here, the defendants are relying upon both doctrines, which the court will address in turn. 1. Incorporation by Reference It is well settled that, “a court may consider material which is properly submitted as part of the complaint on a motion to dismiss without converting th[at] motion ... into a motion for summary judgment.” Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir.2001) (internal quotation marks and citation omitted); see also Fed.R.Civ.P. 10(c) (“A copy of a written instrument that is an exhibit to a pleading is a part of the pleading for all purposes.”) The incorporation by reference doctrine allows a court to also “take into account documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiffs] pleading.” Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir.2005) (internal quotation marks and citations omitted). Taking a relatively expansive view of that doctrine, the Ninth Circuit has recognized that “[e]ven if a document is not attached to a complaint, it may be incorporated by reference into a complaint if the plaintiff refers extensively to the document or the document forms the basis of the plaintiffs claim.” Ritchie, 342 F.3d at 908 (citations omitted). Under those circumstances, “the district court may treat such a document as part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6).” Marder v. Lopez, 450 F.3d 445, 448 (9th Cir.2006) (internal quotation marks and citation omitted). Significantly, in In re Silicon Graphics Secs. Litig., 183 F.3d 970 (9th Cir.1999), the Ninth Circuit held that on a motion to dismiss the district court properly invoked the incorporation by reference doctrine to consider a company’s SEC filings where the plaintiff alleged the contents of those filings in her complaint and relied on them as a basis for her allegations. Id. at 986; see also Fecht v. Price Co., 70 F.3d 1078, 1080 n. 1 (9th Cir.1995) (affirming district court’s consideration on motion to dismiss of “full text of the Company’s corporate disclosure documents and ... securities analysts’ reports quoted in the Complain^ ]”). In this action, the FAC is 103 pages, with attached exhibits totaling 79 pages. It references 11 of the 13 documents which Apollo requests the court to consider, and 8 of the 12 documents which the individual defendants request the court to consider. Defendants’ requests overlap somewhat. Given that plaintiff is not opposing these defense requests, obviously, there are no authenticity challenges. Thus, under the incorporation by reference doctrine, the court will consider the following documents, as necessary, to resolve these motions to dismiss: (1) the July 3, 2007, news release entitled “Apollo Group, Inc. Announces Completion of SEC Investigation[;]” (2) a June 8, 2006, Lehman Brothers Equity Research Company Update (“the Lehman Report”); (3) Apollo’s Form 8-Ks filed with the SEC on October 18, 2006; November 6, 2006; and December 15, 2006; (4) excerpts from Apollo’s Form 8-Ks filed with the SEC on June 12, 2006, and June 20, 2006; (5) excerpts from Apollo’s Form 10-K filed with the SEC on May 22, 2007; (6) a Yahoo! Finance print out, documenting the market price of Apollo’s common stock from December 1998, April 1999, and May 14, 2007 until present; (7) excerpts from the November 17, 2006, deposition transcript of John Sper-ling in In re Apollo Group, Inc. Securities Litigation, CV 04-2147-PHX-JAT; (8) a September 19, 2006, letter from the SEC’s Chief Accountant; and (9) Apollo “stock trading price information for the periods January 1, 1998 through December 31, 2001 and January 1, 2006 through December 31, 2007 downloaded from Google Finance ... IT RJN (doc. 79) at ¶¶ 1-10; and RJN (doc. 83). 2. Judicial Notice Pursuant to Fed.R.Evid. 201, a court may “take judicial notice of matters of public record and consider them without converting a Rule 12 motion into one for summary judgment.” 14.02 Acres of Land, 530 F.3d at 894 (internal quotation marks and citation omitted). That Rule “governs only judicial notice of adjudicative facts.” Fed.R.Evid. 201(a). The notes following that Rule define “adjudicative facts” as “simply the facts of the particular case.” Fed.R.Evid. 201 advisory committee’s note. The court may take judicial notice of such facts “as long as the facts noticed are not subject to reasonable dispute.” Intri-Plex Technologies, Inc. v. Crest Group, Inc., 499 F.3d 1048, 1052 (9th Cir.2007) (internal quotation marks and citation omitted). Rule 201 therefore provides an alternative means by which the court can consider Apollo’s SEC filings, reported stock price history, and the other publicly available financial documents listed above. See Metzler Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d 1049, 1064, n. 7 (9th Cir.2008) (citation omitted) (“proper” for district court to take judicial notice of “reported stock price history and other publicly available financial documents, including ... SEC filings[ ]” on motion to dismiss). The complaint does not reference the remaining four documents of which the individual defendants request the court to take judicial notice. Three of those documents also are SEC filings: (1) Apollo’s Form 8-Ks filed on March 15, 2007, and on May 4, 2007; (2) Apollo’s Articles of Incorporation, filed on August 1, 2000; and (3) the Articles of Amendment thereto, filed in Apollo’s Form 8-K filed on July 27, 2007. As just explained, the court may properly take judicial notice of these various SEC filings. That is because such filings “are ‘capable of accurate and ready determination by resort to sources whose accuracy cannot be reasonably questioned.’ ” In re White Electronic Designs Corp. Secs. Litig., 416 F.Supp.2d 754, 760 (D.Ariz.2006) (quoting In re Network Assoc., Inc. II Secs. Litig., 2003 WL 24051280, at *1 n. 3 (N.D.Cal. Mar.25, 2003)) (other citations omitted). The court stresses that it only is taking judicial notice of “the content” of these various SEC filings, “and the fact that they were filed with the agency.” See Patel v. Parnes, 253 F.R.D. 531, 546 (C.D.Cal.2008). “The truth of the content, and the inferences properly drawn from them, however, is not a proper subject of judicial notice under Rule 201.” Id. (citations omitted). Accordingly, as in Patel, the court will take judicial notice of these SEC filings, but only to the extent the individual defendants are seeking judicial notice of the content of those documents and the fact of their filing. See id. The last document of which the individual defendants seek to have this court take judicial notice is a December 4, 2006, court order in Alaska Electrical Pension Fund, Derivatively on Behalf of Apollo Group, Inc. v. Sperling, CV-06-2124-PHX-ROS. Curiously, despite this explicit request, these defendants do not mention that order either in their motion or in their reply. Nor does their RJN offer any insight as to why judicial notice of that order is necessary. The individual defendants merely state that the court may take judicial notice of the Alaska Electrical order “because it is an order of another court.” RJN (doc. 83) at 4 (citing U.S. ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir.1992)). The court declines to speculate as to the supposed import of the Alaska Electrical order on this action. Accordingly, it denies the individual defendants’ request to take judicial notice of that order. See White Electronic, 416 F.Supp.2d at 761 (refusing to take judicial notice where defendants did “not explain! ] why they ... requested judicial notice”). Like the individual defendants, Apollo also is requesting that the court take judicial notice of documents which the FAC does not reference. The first is a news article. On the theory that it is a “matter of public record and not subject to dispute!,]” RJN (doc. 79) at ¶ 7, Apollo is seeking to have the court judicially notice “an October 18, 2006 news article entitled ‘Apollo Group Says Fourth-Quarter Net Income Declines 12 Percent.’ ” Farrell Decl’n (doc. 80) at ¶ 8; and exh. 7 thereto. The second document is “[a] March 8, 2007 NERA Economic Consulting report entitled ‘Options Backdating: The Statistics of Luck,’ available at http://umrw.nera.com/ image/P UB -BackdatingJPart-IIISep 2007-FINAL.pdji.T Id. at 3; and exh. 12 thereto. As part of the “Background” for their motion, the individual defendants included a section entitled “Stock Options and ‘Backdating’ A Primer[.]” Apollo Mot. (doc. 81) at 4 and 15. (Emphasis omitted) Based generally upon that NERA report, Apollo notes in passing that “one might reasonably expect companies lawfully to grant options at times when their stock prices are relatively low, without any ‘backdating.’ ” Id. at 6, n. 5 (citation omitted). “It is appropriate for the court to take judicial notice of news articles regarding defendants’ stock or corporate activities!,]” such as the October 18, 2006, news article identified above, and it will. See Patel, 253 F.R.D. at 549 (citations omitted). This is so even though the complaint does not mention this particular article. See Heliotrope General, Inc. v. Ford Motor Co., 189 F.3d at 981 and n. 18. The court will therefore take judicial notice of the October 18, 2006 news article. On the other hand, it will not take judicial notice of the NERA report because although Apollo is referenced generally in a table thereto, neither the report itself nor that table include adjudicative facts properly subject to judicial notice under Rule 201. B. Plaintiff’s Exhibits In opposing these motions, plaintiff also is relying upon documents not attached to the complaint. Those documents are exhibits to the declaration of attorney Wood who is associated with the law firm appointed as lead counsel. In contrast to the defendants, though, plaintiff did not specifically request that the court take judicial notice of any of those exhibits. Nonetheless, the court could, sua sponte, take judicial notice of those exhibits. See Fed. R.Evid. 201(c). For that reason, and because those exhibits are part of plaintiffs opposition, the court must decide whether to consider any of those exhibits on these Rule 12 motions. 1. CFRA Educational Report In its factual recitation, plaintiff includes a relatively lengthy quote by an analyst at the Center for Financial Research and Analysis (“CFRA”). That quote is taken from an “Educational Report” entitled “Options Backdating— Which Companies are at Risk!:] A Survey of the Top 100 Users of Stock Options 1997 — 2002[.]” Wood Decl’n (doc. 95), exh. A thereto at 1. Plaintiff relies upon an excerpt from that report to summarize “the risks for companies found to have backdated stock options[.]” Resp. (doc. 94) at 15. Pursuant to Fed.R.Evid. 201(c), the court in its discretion may sua, sponte take judicial notice of an adjudicative fact. The court declines to do so with respect to this CFRA report however. The primary reason for not taking judicial notice is that, as Apollo accurately points out, “although th[at] report identifies 32 companies as having the highest risk of having backdated options, the report does not mention Apollo at all.” Reply (doc. 97) at 15. Clearly then this CFRA report does not contain an adjudicative fact, ie. “the facts of the particular case[,]” of which this court may properly take judicial notice. See Fed.R.Evid. 201 advisory committee’s note. The court observes that while it is not refusing to take judicial notice on this basis, somewhat tellingly, every page of that report includes the qualifying language that it is “[f|or the exclusive use [of] Lerach Coughlin Stoia & Robbins, LLP.” Wood Decl’n (doc. 95), exh. A thereto at 10-26. The inclusion of that qualifying language calls into question the. objectivity of this CFRA report. 2.“The Arizona Republic” Article Exhibit B to the Wood declaration is a January 17, 2008, article from “The Arizona Republic” entitled “Apollo Guilty of Securities Fraud[.]” Wood Decl’n (doc. 95), exh. B thereto at 1. If for no other reason, the court will not take judicial notice of this article because the jury verdict discussed therein was subsequently set aside by Judge Teilborg. See In re Apollo Group, Inc. Sec. Litig., 2008 WL 3072731 (D.Ariz. Aug.4, 2008). Thus, even if this “Arizona Republic” article was relevant to the present case at some point, it no longer is. 3. Verdict Form Likewise, the court also will not take judicial notice of, or otherwise consider exhibit C to the Wood declaration, the jury verdict form in the Apollo Group case— the same verdict which Judge Teilborg set aside. 4. Apollo Stock Chart The fourth exhibit to the Wood declaration is an untitled one page document. Neither the source of that document nor its significance appear on the face thereof. Attorney Wood describes the columns of numbers contained thereon as an “Apollo stock chart showing the 50 dates when the highest volume of Apollo Group, Inc. Stock was traded from February 2, 1995 to March 20, 2008, retrieved from Yahoo! Finance (http ¡//finance. yahoo.com) and sorted by volume with Microsoft Excel.” Wood Decl’n (doc. 95) at 2, ¶ 2. Plaintiff is relying upon that chart to show that “[m]ore shares of Apollo stock changed hands on October 18, 2006 than ever before in Apollo’s history.” Resp. (doc. 94) at 28. Largely because the source of that chart is not apparent from its face, and because the method of its creation uncertain, the court will not take judicial notice of it. See White Electronic, 416 F.Supp.2d at 761 (refusing to take judicial notice, in securities fraud case, of exhibit “purporting] to be a chart showing [defendant’s] stock prices” where “source not apparent from the document itself and not all of the share prices on th[e] chart compared with share prices for specific dates listed in the Complaint[ ]”). II. Motions to Dismiss A. Rule 12(b)(6) Standards It is axiomatic that Rule 12(b)(6) motions “test[] the legal sufficiency of the claims asserted in the complaint[.]” Ileto v. Glock, Inc., 349 F.3d 1191, 1199-1200 (9th Cir.2003). “A Rule 12(b)(6) dismissal may be based on either a lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Johnson v. Riverside Healthcare System, LP, 534 F.3d 1116, 1121-1122 (9th Cir.2008) (internal quotation marks and citation omitted). It is the latter theory of dismissal which forms the basis for defendants’ attacks on the FAC in this case. When considering a motion to dismiss for failure to state a claim under Rule 12(b)(6), the court must “accept the plaintiffs’ allegations as true and construe them in the light most favorable to plaintiffs.” In re Gilead Sciences Sec. Litig., 536 F.3d 1049, 1055 (9th Cir.2008) (internal quotation marks and citation omitted), petition for cert denied, (— U.S. —, 129 S.Ct. 1993, 173 L.Ed.2d 1085 (2009)). At the same time though, the court is not “required to accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.’ ” Id. (internal quotation marks and citations omitted). As the Supreme Court explained in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, ..., a plaintiffs obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do[.]” Id. at 127 S.Ct. 1964-1965 (internal quotation marks and citations omitted). “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 (citations and footnote omitted). Similarly, “[l]egal conclusions need not be taken as true merely because they are cast in the form of factual allegations.” Lee Myles Associates Corp. v. Paul Rubke Enterprises, Inc., 557 F.Supp.2d 1134, 1137 (S.D.Cal.2008) (citations omitted). At the end of the day, “[t]he complaint is properly dismissed if it fails to plead enough facts to state a claim to relief that is plausible on its face.” Gilead, 536 F.3d at 1055 (internal quotation marks and citations omitted). On the other hand, as the Supreme Court stressed in Twombly, “a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that recovery is very remote and unlikely.” Twombly, 550 U.S. at 555, 127 S.Ct. at 1965 (internal quotation marks and citation omitted). “Indeed, it may appear on the face of the pleading that recovery is very remote and unlikely but that is not the test.” Johnson, 534 F.3d at 1123-24 (internal quotation marks and citations omitted). B. Statute of Limitations Although not the first dismissal argument which Apollo raises, because it can potentially narrow the scope of plaintiffs claims, the court will address Apollo’s statute of limitations argument first. Preliminarily, there is no merit to plaintiffs suggestion that this statute of limitations argument is not properly before the court on this Rule 12 dismissal motion. “If the expiration of the applicable statute of limitations is apparent from the face of the complaint,” it is well settled that “the defendant may raise [that] defense in a Rule 12(b)(6) motion to dismiss.” See In re Juniper Networks, Inc. Sec. Litig., 542 F.Supp.2d 1037, 1050 (N.D.Cal.2008) (citing Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir.1980)). Despite plaintiffs contrary suggestion, “[t]his is true even though expiration of the limitations period is an affirmative defense because Federal Rule of Civil Procedure Rule 9(f) makes averments of time and place material for the purpose of testing the sufficiency of a complaint.” Id (internal quotation marks and citation omitted). Consistent with the foregoing, “[i]f a claim is barred by [the] applicable statute of limitations, dismissal pursuant to Rule 12(b)(6) is appropriate.” Guerrero-Melchor v. Arulaid, 2008 WL 539054, at *2 (W.D.Wash. Feb.22, 2008) (citation omitted). At the same time, though, the court is keenly aware that a complaint cannot be dismissed as untimely under Rule 12(b)(6) “unless it appears beyond doubt that the plaintiff can prove no set of facts that would establish the timeliness of the claim.” Pesnell v. Arsenault, 531 F.3d 993, 997 (9th Cir.2008) (internal quotation marks and citation omitted). In making this inquiry, the court must “[a]ccept[ ] as true the allegations in the complaint,” and it “must determine whether the running of the statute is apparent on the face of the complaint.” Huynh v. Chase Manhattan Bank, 465 F.3d 992, 997 (9th Cir.2006) (internal quotation marks and citations omitted). “[I]f the factual and legal issues are not sufficiently clear to permit a determination with certainty whether the action was timely[,]” then the court “must” deny a motion to dismiss based on the running of the statute of limitations. Lee Myles, 557 F.Supp.2d at 1137 (citing Supermail Cargo, Inc. v. United States, 68 F.3d 1204, 1207 (9th Cir.1995)). Finding no merit to plaintiff’s procedural argument, the court is free to turn to the merits of Apollo’s statute of limitations argument. As Apollo construes the FAC, plaintiff is proceeding under two related fraud theories. The first is an alleged “fraudulent scheme” of “backdating ... stock option grants[.]” FAC (doc. 71) at ¶¶ 2 and 6. The second theory, which Apollo terms “an accounting fraud claim[,]” is that due to that alleged “backdating,” Apollo issued financial statements which were purportedly “materially false and misleading, resulting in an artificial inflation of [Apollo’s] stock price[.]” Id. at ¶ 2. As to the first theory, Apollo contends that those backdating claims are barred under 28 U.S.C. § 1658(b). That statute reads as follows: [A] private right of action that involves a claim of fraud, deceit, manipulation, or contrivance in contravention of a regulatory requirement concerning the securities laws, ... may be brought not later than the earlier of— (1) 2 years after the discovery of the facts constituting the violation; or (2) 5 years after such violation. 28 U.S.C. § 1658(b) (West 2006). Apollo argues that to the extent the FAC alleges a fraudulent option backdating scheme, it is barred under section 1658(b)’s five year statute of repose. A statute of repose, as distinguished from a statute of limitations, is “not subject to equitable tolling.” Munoz v. Ashcroft, 339 F.3d 950, 957 (9th Cir.2003) (citations omitted). Rather, “[a] statute of repose is a fixed, statutory cutoff date, usually independent of any variable, such as claimant’s awareness of a violation.” Id. (citations omitted). “A claim under § 10(b) that is based on the backdating itself accrues on the date the option grant was made.” In re Affiliated Computer Servs. Deri. Litig., 540 F.Supp.2d 695, 701 (N.D.Tex.2007) (citation omitted); see also In re Comverse Tech., Inc. Sec. Litig., 543 F.Supp.2d 134, 155 (E.D.N.Y.2008) (citation omitted) (“[T]o the extent that [plaintiffs’] claims are based directly on a backdated grant of options, the 5-year period begins to run on the date the options were granted.”) The five option grants which the FAC identifies, i.e., December 18, 1998; April 19, 1999; January 12, 2000; December 15, 2000; and September 21, 2001, all occurred more than five years prior to the filing of this action. Therefore, the court agrees with Apollo that dismissal of those claims is mandated because this lawsuit was not filed until November 2, 2006— “five years and forty-six days after the last of the five grant dates (September 21, 2001)[.]” Mot. (doc. 81) at 11. Plaintiff buries its response to this argument in a footnote, indicating that the general rule that a backdating claim accrues on the date the option was granted “is not directly at issue in this case[.]” Resp. (doc. 94) at 52, n. 26. Even assuming the applicability of that rule, plaintiff reasons that a backdating claim based upon “[t]he last grant that [it] specifically alleges was backdated[,]” ie. September 21, 2001, would survive this dismissal motion in any event. Id. That particular backdating claim is not time-barred, plaintiff hypothesizes, if the September 21, 2001, grants were “backdated by over forty-six days[.]” Id. Countering that Apollo has not met its burden of proof on such a claim because it has not shown that that “grant was actually granted before November 2, 2006,” plaintiff contends that this particular backdating claim is timely. See id. Plaintiff misconceives the parties’ respective burdens at this juncture. Absent any allegations in the complaint, the court declines to speculate, as plaintiff urges, as to whether the September 21st grants were “backdated by over forty-six days,” so as to bring them within the five year statute of repose. See id. As part of the alleged fraudulent scheme to backdate stock options, the FAC alleges that “[w]hile some of these grants were not publicly reported, several grants reported in Apollo’s Forms 10-K had purported grant dates so improbable that backdating is the only plausible explanation.” Id. at 17, ¶ 48. Among those are grants made “on September 21, 2001[.]” Id. at 21, ¶ 52. To the extent plaintiff is asserting a claim for the backdating itself in conjunction with those September 21st grants, as set forth above, such a claim accrues the date those option grants were made. See Affiliated Computer, 540 F.Supp.2d at 701 (citation omitted); see also Comverse Technology, 543 F.Supp.2d at 155 (citation omitted). Because the present action was not commenced until November 2, 2006, any claims based directly on backdating allegedly occurring on September 21, 2001, are time barred. Accordingly, the court grants Apollo’s motion to dismiss as untimely any claims based upon backdating itself with respect to the five option grants set forth earlier. Turning to what it concedes is the “[t]he gravamen of’ the FAC, “the reporting of false and misleading financial results[,]” plaintiff contends that because it is alleging a “series of fraudulent misrepresentations[,]” the five year repose period began to run “no earlier than 2006[.]” Resp. (doc. 94) at 50 and 51. In essence, plaintiff is urging this court to adopt a theory of continuing wrong so that it can circumvent the five year repose period. Based upon that theory, plaintiff contends that all of its false misrepresentation claims are timely. Primarily because it would run afoul of the general proposition that “the five-year statute of limitations period begins to run on the date of the false representation[,]” the court declines to adopt a continuing wrong or continuing violation theory here. See Juniper Networks, 542 F.Supp.2d at 1051 (citations omitted). As in In re Zoran Corp. Deriv. Litig., 511 F.Supp.2d 986 (N.D.Cal.2007), the court finds that the statute of limitations accrues for these false representation claims “when the violation itself occurs, not when the last violation in a series of alleged violations occur.” Id. at 1014. Accordingly, plaintiffs false representation claims are timely to the extent such misstatements were made during the five-year period of repose. Claims based on misrepresentation statements outside the statute of repose (i.e., prior to November 2, 2001) are not timely, however, and the court grants Apollo’s motion to dismiss in that regard. See Juniper Networks, 542 F.Supp.2d at 1051 (citation omitted) (“any part of Plaintiffs’ § 10(b) claim based on pre-repose period representations is barred even if the injury did not occur until after period began[ ]”). C. Section 10(b) & Rule 10b-5 Claims The court will next turn to the core issue of these dismissal motions- — -“whether plaintiffi ][has] adequately pled a claim of securities fraud — something that is much harder now than in days gone by.” Berson v. Applied Signal Technology, Inc., 527 F.3d 982, 983 (9th Cir.2008). Indeed, fairly recently the Ninth Circuit observed that “[d]ue in large part to the enactment of the ... PSLRA, .. plaintiffs in private securities fraud class actions face formidable pleading requirements to properly state a claim and avoid dismissal under Fed.R.Civ.P. 12(b)(6).” Metzler Inv., 540 F.3d at 1055 (citation omitted). Although “formidable,” those standards are not insurmountable. “In a typical § 10(b) private action a plaintiff must prove (1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation.” Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, 552 U.S. 148, 128 S.Ct. 761, 768, 169 L.Ed.2d 627 (2008). Defendants contend that they are entitled to dismissal of plaintiffs 10b-5 claims because plaintiff has not adequately pled three of those elements. More specifically, Apollo maintains that “plaintiff has failed to adequately plead that any grants were ‘backdated[.]’ ” Mot. (doc. 81) at 12 (emphasis in original). In a similar vein, all defendants argue that plaintiffs misstatement and omissions claims are not pled with the requisite particularity. Next, Apollo challenges the sufficiency of plaintiffs loss causation allegations, whereas the primary thrust of the individual defendants’ motion is that the FAC does not adequately plead scienter. 1. Particularity a. Pleading Standards i. Rule 9 Rule 9(b) requires that “[i]n all aver-ments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” Fed.R.Civ.P. 9(b). “In order to allege fraud with particularity, the complaint must both identify the allegedly fraudulent statement and explain why it was false when made.” In re Metropolitan Sec. Litig., 532 F.Supp.2d 1260, 1279 (E.D.Wash.2007) (citation omitted). A complaint which “specifies] such facts as the times, dates, places, and benefits received, and other benefits of the alleged fraudulent activity[ ]” provides the notice which Rule 9(b) requires. See id. at 672 (citations omitted). “Further, a pleader must identify the individual who made the alleged representation and the content of the alleged representation.” In re Hansen Natural Corp. Sec. Litig., 527 F.Supp.2d 1142, 1151 (C.D.Cal.2007) (internal quotation marks and citation omitted). The purpose of Rule 9(b)’s heightened pleading requirements is “to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged so that they can defend against the charge and not just deny that they have done anything wrong.” Neubronner v. Milken, 6 F.3d 666, 671 (9th Cir.1993) (internal quotations and citation omitted). A complaint which “relies on ‘shotgun’ or ‘puzzle’ pleading!]” does not meet Rule 9(b)’s particularity requirement. Metropolitan Sec., 532 F.Supp.2d at 1279 (citation omitted). “Shotgun pleadings are those that incorporate every antecedent allegation by reference to each subsequent claim for relief or affirmative defense.” Id. (internal quotation marks and citation omitted). Puzzle pleadings, which “[c]ourts in this [C]ircuit have Defazio v. Hollister, Inc., 2008 WL 958185, at *3 n. 3 (E.D.Cal. April 8, 2008)” (citing cases), including this one, “are those that require the defendant and the court to match the statements up with the reasons they are false or misleading.” Metropolitan Sec., 532 F.Supp.2d at 1279 (internal quotation marks and citations omitted). ii. PSLRA In addition to satisfying Rule 9(b), a securities fraud plaintiff must meet the PSLRA’s “exacting pleading requirements.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 127 S.Ct. 2499, 2504, 168 L.Ed.2d 179 (2007). “The PSLRA requires a heightened pleading standard for allegations regarding misleading statements and omissions that is similar to the heightened pleading standard required by Rule 9(b).” Hansen, 527 F.Supp.2d at 1151. More specifically, that Act requires plaintiffs alleging securities fraud “to 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) (West 1997). “The purpose of this heightened pleading requirement was generally to eliminate abusive securities litigation and particularly to put an end to the practice of pleading fraud by hindsight.” In re Vantive Corp. Sec. Litig., 283 F.3d 1079, 1084-85 (9th Cir.2002) (internal quotation marks and citation omitted). Indeed, the detail which § 78u-4(b)(1) demands “is the PSLRA’s single most important weapon against pleading fraud by hindsight because it forces plaintiffs to reveal whether they base their allegations on an inference of earlier knowledge drawn from later disclosures or from contemporaneous documents or other facts.” Hansen, 527 F.Supp.2d at 1152 (citation omitted). “By requiring specificity, § 78u-4(b)(1) prevents a plaintiff from skirting dismissal by filing a complaint laden with vague allegations of deception unaccompanied by a particularized explanation stating why the defendant’s alleged statements or omissions are deceitful.” Metzler Inv., 540 F.3d at 1061 (citation omitted). By Apollo’s count, the FAC identifies 26 allegedly false and misleading statements which defendants issued during the class period. See FAC (doc. 71) at ¶¶ 53-87. Plaintiff alleges that those statements were false and misleading as they pertained to: (1) Apollo’s “financial results;” (2) “the terms and value of the options granted to [Apollo] officers, directors, and employees;” (3) “the internal controls relating to stock option grants and related financial reporting;” and (4) Apollo’s “application” of certain accounting principles and standards pertaining to “accounting for stock option grants.” Id. at ¶ 53. The FAC goes on to allege, broadly stated, that in each of the years 2002-2006 Apollo issued a series of press releases providing quarterly fiscal results. Although the FAC does not allege that those press releases contained “false financial results[,]” given plaintiffs manner of pleading, that is the obvious inference. See, e.g., id. at ¶ 54 (“On March 26, 2002, Apollo issued a press release entitled ‘Apollo Group Inc. Reports Fiscal 2002 Second Quarter Results.’ These false financial results were reported in Apollo’s Form 10-Q, which was filed with the SEC on April 12, 2002.”) The FAC also alleges that those purportedly false results were in turn “repeated” in Apollo’s Form 10-Qs and 10-Ks, which it filed with the SEC. See, e.g., id. at ¶¶ 54; 57; 72; and 76. After enumerating the supposedly false and misleading statements for each of the years from 2002-2006, plaintiff sets forth what it deems to be “[t]he ,true facts known at the time[.]” Id. at ¶¶ 59(a)-(f); 65(a)-(f); 74(a)-(g); 81(a)-(f); and 87(a)-(g). With a few minor exceptions, those “true facts” are identical for each of the class period years and are set forth in full below: (a) Apollo’s 2000, 2001, and 2002 financial results, including its net income, earnings per share, and profit and gross margins, were all materially overstated due to contrivances and manipulations in the administration of Apollo’s stock options, including backdating and failing to properly record or account for the actual amount and tax consequences of compensation expenses of its executives; (b) Apollo’s financial and operating results reported during the Class Period were not entirely due to the skill and business acumen of its top executives,' their successful management of its business or the outstanding performance of its business units, as represented; in fact, a significant part was due to falsification of Apollo’s financial statements by not properly accounting for (and thus understating) the true compensation expenses of its executive and management team; (c) Apollo’s top executives and directors were manipulating the Company’s stock option plans to provide themselves with millions of dollars in undisclosed income by backdating stock option grants to a much lower exercise price thus giving them an instant, risk-less profit, while exposing the Company to the risk of regulatory investigations, tax penalties and even criminal proceedings; (d) Apollo’s internal financial and accounting controls were materially deficient and not effective in providing the necessary and required degrees of assurance that Apollo’s financial results and reports were fairly and accurately presented and free from fraud; (e) Senior management’s salaries and option grants had not been determined as a result of arm’s-length negotiation with Apollo’s Compensation Committee, but rather were the product of cronyism and undisclosed conflicts of interest; and (f) Because Apollo’s historical and current financial results were overstated, defendants’ forecasts of Apollo’s future financial performance were false and could not be achieved. Id. at ¶¶ 59(a)-(f) (emphasis added); see also FAC at ¶¶ 65(a)-(f); ¶¶ 74(a)-(d) and ¶¶ 74(f)-(g); ¶¶ 81(a)-(f); and 1HÍ87(a)-(f). An additional “true fact” in 2004 was that purportedly “Apollo had not taken the required compensation expenses for its conversion of University of Phoenix Online common stock.” Id. at ¶ 74(e). Likewise, in 2006 the FAC alleges two other “true facts[:]” (1) “Apollo’s June 9, 2006 denial of stock option backdating was false and misleading as discussed infra [;]” and (2) “Apollo’s January 11, 2006 press release regarding the resignation of Nelson omitted material facts regarding the circumstances of [his] resignation.” Id. at ¶¶ 87(g)-(h). To illustrate its view that plaintiff has not pled fraud with the requisite degree of particularity, Apollo points out that the FAC alleges that an April 12, 2002, SEC filing contained “false financial results[J” Id. at ¶ 54. Yet, when the FAC later alleges that such financial results were “due to contrivances and manipulations in the administration of Apollo’s stock options,” id. At ¶ 59(a), it fails to “connect-the-dots” in terms of explaining what is meant by “contrivances and manipulations!,]” and how such actions relate to the earlier allegations of false financials. See In re PetSmart, Inc. Sec. Litig., 61 F.Supp.2d 982, 991 (D.Ariz.1999) (footnote omitted) (“The court should not have to play connect-the-dots in order to identify the facts and trends upon which plaintiffs base their claim.”) Apollo further challenges the sufficiency of plaintiffs fraud allegations for failing to specify the supposedly backdated stock options as they relate to particular “false financial results.” Apollo adds that given the overly broad and vague nature of the FAC, it is impossible to ascertain, among other things, whether plaintiff is relying upon time-barred backdated stock options. The individual defendants, as does Apollo, take plaintiff to task for essentially cutting and pasting and “simply parrot[ing] lengthy ... quotes from Apollo’s public filings” without identifying the specific statement therein which supposedly is false. Mot. (doc. 82) at 23. The individual defendants also challenge the sufficiency of plaintiffs fraud allegations because of the lack of detail as to “why the unidentified misleading statements are purportedly false.” Id. Essentially plaintiff counters that it has complied with the heightened pleading requirements for fraud in that it is alleged “where and when” each false and misleading statement was made; “who made” it; “and a fraudulent course of conduct demonstrating why each statement was false and misleading.” Resp. (doc. 94) at 29 (emphasis in original). Apollo’s May 22, 2007, Restatement is the primary basis for plaintiffs claims that the 26 identified statements were all false and misleading. The court agrees with defendants that the FAC does not satisfy the heightened pleading standards for fraud under either Rule 9(b) or the PSLRA. In its current form the FAC is a puzzle-like pleading which the court cannot countenance. The cut and paste nature of the FAC is troubling. Perhaps the most troubling aspect of the FAC as currently pled is that the “vague allegations of deception” are “unaccompanied by a particularized explanation stating why the defendant’s alleged statements or omissions are deceitful.” See Metzler Inv., 540 F.3d at 1061 (citation omitted). Further, as in Metropolitan Sec., “it is difficult and laborious to determine which portions” of the quoted press releases and SEC filings “are allegedly false and which false statements are attributed to any particular defendant.” See Metropolitan Sec., 532 F.Supp.2d at 1279. The FAC “ ‘often rambles through long stretches of material quoted from defendants’ public statements ... unpunctuated by any specific reasons for falsity.’ ” See id. (quoting In re GlenFed, Inc. Sec. Litig., 42 F.3d 1541, 1547-48 (9th Cir.1994)) (other citation omitted). The court will not take the “drastic step of dismissal based on the form of the pleading[,]” however. See In re Cornerstone Propane Partners, L.P., Sec. Litig., 355 F.Supp.2d 1069, 1081 (N.D.Cal.2005) (citation omitted). Rather, in accordance with “the Ninth Cireuit[’s] recommend[ation] [,]” the court will “require[] ... plaintiff to ‘streamline and reorganize the complaint before allowing it to serve as the document controlling discovery.’ ” See Metropolitan Sec., 532 F.Supp.2d at 1280 (quoting GlenFed, 42 F.3d at 1554) (other citation omitted); see also Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1053 (9th Cir.2003) (abuse of discretion to dismiss FAC with prejudice for failure to provide the detail which PSLRA requires where, inter alia, plaintiff alleged with requisite detail who, what, when and by whom false statements were made, but did not “ ‘plead sufficiently how and why the financial statements were false’ ”). In so doing, plai