Full opinion text
MEMORANDUM OPINION JAMES O. BROWNING, District Judge. THIS MATTER comes before the Court on the Plaintiffs Omnibus Motion of (i) Leave to Amend the Consolidated Class Action Complaint and (ii) For Reconsideration of the Court’s January 27, 2010 Memorandum Opinion and Orders Granting in Part and Denying in Part Defendant’s Motions to Dismiss the Consolidated Amended Complaint, filed July 9, 2010 (Doe. 809)(“Motion”). The Court held a hearing on November 3, 2010. The primary issues are: (i) whether the Court should reconsider the Defendants’ disclosure obligations under the abstain-or-disclose doctrine and Item 303 of Regulation S-K, 17 C.F.R. § 229.303; (ii) whether the Court should reconsider its decision that Defendant Thornburg Mortgage, Inc.’s (“TMI’s”) 2007 Form 10-K Report was not actionable; (iii) whether the Court should reconsider its decision that certain of the Defendants’ statement were inactionable puffery; (iv) whether the Court should reconsider dismissing the Plaintiffs’ claims under Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), against Defendants Garrett Thornburg and Joseph H. Badal; (v) whether the Court should reconsider reserving ruling on the dismissal of the Plaintiffs’ claims under Sections 20(a) of the Exchange Act, 15 U.S.C. § 78t(a), against Defendants Larry A. Goldstone, Clarence D. Simmons, and Paul G. Decoff; and (vi) whether the Court should give the Plaintiffs leave to file their Second Amended Complaint (“SAC”), which is attached to their Motion. See Doc. 309-1. After carefully considering the parties’ arguments, the Court concludes that: (i) it will reconsider the Defendants’ disclosure obligations under the abstain-or-disclose doctrine and Item 303, but that the Defendants’ disclosure duties thereunder do not alter that Court’s holdings; (ii) the Court will not change its decision that TMI’s 2007 Form 10-K was not actionable, because the Plaintiffs present no new law or facts to support their request for a different decision on this matter; (iii) the Court will not alter its decision that certain of the Defendants’ statements were inaction-able puffery, because the Plaintiffs again present no new law or facts to support their request for a different decision on this matter; (iv) the Court will not change its decision dismissing the Plaintiffs’ Section 10(b) claims against Thornburg and Badal, because the disclosure duties under the abstain-or-disclose rule and Item 303 do not alter the Court’s analysis; (v) the Court will reconsider reserving ruling on the dismissal of the Plaintiffs’ Section 20(a) claims against Goldstone, Simmons, and Decoff, dismissing the Plaintiffs’ claims against Decoff, but not dismissing the Plaintiffs’ claims against Goldstone and Simmons; and (vi) the Court grants the Plaintiffs’ leave to file their SAC, because the SAC cures deficiencies in the Plaintiffs’ allegations establishing Section 20(a) liability against Thornburg. FACTUAL BACKGROUND The Plaintiffs’ Consolidated Class Action Complaint, filed May 27, 2008 (Doc. 68) (“CCAC”) and SAC, describe a series of public statements and filings dating back to early 2006 that the Plaintiffs assert contain fraudulent material misrepresentations. The Plaintiffs also contend that the Defendants’ public statements and filings contain material omissions. The Court draws the following statement of facts from the well-pleaded, non-conclusory allegations of the CCAC, as the Court must when deciding or reconsidering a motion to dismiss filed under rule 12(b)(6) of the Federal Rules of Civil Procedure. Where relevant, the Court includes information from TMI’s Securities and Exchange Commission (“SEC”) filings to which Plaintiffs refer in their CCAC. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) (“[C]ourts must consider the complaint in its entirety, as well as other sources ..., in particular, documents incorporated into the complaint by reference, and matters of which a court may take judicial notice.”); Litwin v. Blackstone Group, L.P., 634 F.3d 706, 708 (2d Cir.2011) (“[W]e include information from [SEC] filings by the Blackstone Group, L.P. ... to which plaintiffs refer in their complaint, particularly the Form S-l Registration Statement ... and Prospectus filed by Blackstone in connection with its June 21, 2007 initial public offering....”); ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir.2007) (“[W]e may consider ... legally required public disclosure documents filed with the SEC, and documents possessed by or known to the plaintiff and upon which it relied in bringing the suit.”). 1. The Parties. This consolidated action is brought by Lead Plaintiffs (i) W. Allen Gage, individually and on behalf of J. David Wrather; (ii) Harry Rhodes; (iii) FFF Investments, LLC; (iv) Robert Ippolito, individually and as Trustee for the Family Limited Partnership Trust; (v) Nicholas F. Aldrich, Sr., individually and on behalf of the Aldrich Family; (vi) Betty L. Manning; (vii) John Learch; and (viii) Boilermakers Lodge 154 Retirement Plan (“Boilermakers Lodge”) (collectively “the Plaintiffs”). The Plaintiffs all purchased shares of TMI stock during the Class Period at prices that they allege were artificially inflated. They assert that they were damaged as a result of these inflated-price purchases. See CCAC ¶ 53, at 15-16. Manning acquired 550 shares of TMI common stock during the May 2007 Offering. See CCAC ¶ 54, at 16. She bought them on May 4, 2007 and paid $27.05 per share. See CCAC ¶ 54, at 16. Learch, as trustee for the Learch trust, acquired 400 shares of 7.5% Series E Cumulative Convertible Redeemable Preferred Stock in the June 2007 Offering. See CCAC ¶55, at 16. He bought his shares on June 19, 2007 and paid $25.00 per share. See CCAC ¶ 55, at 16. Boilermakers Lodge purchased TMI stock during the September 2007 Offering. See Plaintiffs’ Opposed Motion for Leave to Amend Consolidated Class Action Complaint to Add Additional Representative Plaintiff ¶ 5, at 4, filed January 27, 2009 (Doc. 160). No particular Plaintiff alleges to have purchased any TMI stock in the January 2008 offerings. TMI, a Defendant whose securities are at the heart of this action, is a publicly traded residential-mortgage lender that represents that it focuses primarily on the “jumbo” and “super-jumbo” segment, ie., loans totaling over $417,000.00, of the adjustable-rate mortgage (“ARM”) market. CCAC ¶ 5, at 2. In essence, TMI generates business by loaning and borrowing money, and charging a higher interest rate on the money that it loans to others than its sources charge it on the money that it borrows. See CCAC ¶ 5, at 2-3. As the Plaintiffs put it, “[TMI] generates income from the small, net spread between the interest income it earns on its assets and the cost of its borrowings.” CCAC ¶ 5, at 2-3. TMI was formed under the laws of the State of Maryland and has its principal place of business in Santa Fe, New Mexico. See CCAC ¶ 57, at 16. At all relevant times, TMI’s securities have been traded on the New York Stock Exchange (“NYSE”) under the symbol “TMA.” CCAC ¶ 57, at 16. For federal income tax purposes, TMI is classified as a Real Estate Investment Trust. There are nine Defendants who underwrote TMI’s public offerings: (i) AG Edwards & Sons, Inc.; (ii) BB & T Capital Markets; (iii) UBS Securities, LLC; (iv) Citigroup Global Markets, Inc.; (v) Friedman, Billings, Ramsey & Co., Inc. (“FBR”); (vi) Oppenheimer & Company, Inc.; (vii) RBC Dain Rauscher Corp.; (viii) Stifel, Nicolaus & Company, Inc. (“SNC”); and (ix) Bear, Stearns & Co., Inc. The Court will refer to them as “the Underwriter Defendants.” These Defendants are all underwriters of TMI’s public offerings — in other words, these Defendants each bought TMI stock and sold that stock to other investors, implementing TMI’s public offerings. Citibank, AG Edwards, and SNC underwrote the May 2007 offering, see CCAC ¶532, at 163; SNC, AG Edwards, BBC, BB & T, and Oppenheimer underwrote the June 2007 offering, see CCAC ¶ 535, at 164; FBR underwrote the September 2007 offering, see CCAC ¶ 538, at 164; and FBR, UBS, Bear Stearns, and SNC all underwrote the February 2008 offering, see CCAC ¶ 541, at 165. There are also twelve individuals named as Defendants in this action. Thornburg was TMI’s founder. See CCAC ¶ 58, at 17. At all relevant times, he served as Chairman of the Board of Directors and, until December 18, 2007, acted as Chief Executive Officer. See id. Goldstone has served as President, Chief Operating Officer, and a director since June 1993. See id. ¶ 59, at 17. Goldstone became CEO on December 18, 2007. See id. Badal served as a director, the Chief Lending Officer, and Executive Vice President until his retirement on December 31, 2007. See id. ¶ 60, at 17. Decoff has served as Senior Executive Vice President and Chief Lending Officer since January 1, 2008. See id. ¶ 61, at 17. Simmons has served as Senior Executive Vice President since March 2005, and Chief Financial Officer since April 2005. See id. ¶ 62, at 17-18. The Court will refer to these Defendants— TMI, Thornburg, Goldstone, Simmons, Badal, and Decoff — as “the Individual Defendants.” The CCAC describes the remaining individual Defendants, Anderson, Ater, Cutler, Kalangis, Lopez, Mullin and Sherman (“the Director Defendants”) only as directors during the Class Period. See CCAC ¶¶ 522-28, at 162-63. When discussing all Defendants, the Court will refer to them collectively as “the Defendants.” 2. The Claims. This federal-securities class action sets forth claims under the Securities Act of 1933, 15 U.S.C. §§ 77a to 77aa (“Securities Act”) and under the Securities Exchange Act of 1934, 15 U.S.C. §§ 78a to 78oo (“Exchange Act”). The Plaintiffs allege that “certain defendants acted knowingly or with recklessness in issuing materially false or misleading statements and/or failing to disclose facts concerning [TMIJ’s business and financial condition between April 19, 2007 and March 19, 2008, inclusive.” CCAC ¶ 2, at 1-2. Thus, the Plaintiffs assert, the Defendants are liable for violations of Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78j(b) and 78t(a), respectively, and Sections 11, 12(a)(2), and 15 of the Securities Act, 15 U.S.C. §§ 77k, 77((a)(2), and 77o, respectively. The Plaintiffs assert that the Underwriter Defendants are liable for violations of Sections 11, 12(a)(2), and 15 of the Securities Act, 15 U.S.C. §§ 77k, 77Z(a)(2), and 77o. See CCAC ¶¶ 598-620, at 181-86. 3. The Condition of the Housing Market in 2006-2007. In 2006 and 2007, real-estate values began to falter, resulting in an increased rate of mortgage defaults. See CCAC ¶¶ 92-93, 96, at 27-29. As a result, by early 2007, the market for Alt-A mortgages, mortgage-backed securities (“MBSs”), and asset-backed commercial paper (“ABCP”) shrunk. See CCAC ¶¶ 100-03, at 30-31. The result, according to the Plaintiffs, was three-fold: (i) reduced demand for Alt-A MBSs; (ii) increased cost of obtaining capital; and (iii) decreased revenues from ARM mortgages. See Plaintiffs’ Opposition to Defendants’ Motion to Dismiss Consolidated Amended Complaint Filed by Thornburg Mortgage, Inc., Garrett Thornburg, Larry A. Gold-stone, Joseph H. Badal, Paul G. Decoff, Clarence D. Simmons, Anne-Drue M. Anderson, David A. Ater, Eliot R. Cutler, Ike Kalangus, Owen M. Lopez, Francis I. Mullin, Jr., and Stuart C. Sherman at 7, filed December 22, 2008 (Docs. 154, 155, 156, 157)(“1934 Act Response”)(citing CCAC ¶¶ 13, 129-33, at 5, 38-39). Large mortgage lenders began to announce staggering losses coupled with a bleak outlook for the future. See CCAC ¶¶ 13, 96-103, at 5, 29-31. TMI, however, continued to deny that the deteriorating mortgage market was affecting it, appearing to report that its superior underwriting standards insulated it from such effects. See CCAC ¶¶ 79, 213-14, at 24, 63. 4. Problems for TMI. According to the Plaintiffs, to show profitability, TMI must continuously increase the totals on its balance sheet by buying and originating mortgage-backed assets. See CCAC ¶ 5, at 3. This business model requires TMI to have continuous access to capital. See CCAC ¶ 5, at 3. TMI has, historically, acquired capital through public offerings of its securities, short-term borrowings — including reverse repurchase agreements (“RPAs”) — the issuance of asset-backed commercial paper (“ABCP”), and the issuance of collateralized-debt obligations (“CDOs”). See CCAC ¶ 6, at 3. TMI was “heavily leveraged” — meaning that it borrowed a large amount of money compared to the amount of money available to it. For example, depository banks are subject to Federal Reserve rules, which mandate ten percent cash reserves — for every $10.00 of money that the bank lends to outside sources, it must retain $1.00 of actual cash available at all times. See CCAC ¶ 7, at 3. TMI’s internal policy allows it to borrow $12.50 for every $1.00 it holds in equity — an eight-percent equity-reserve position. See CCAC ¶ 7, at 3. Throughout the Class Period, beginning in December 2006, analysts asked TMI whether its limited equity provided sufficient insurance against a real-estate market downturn. See CCAC ¶ 82, at 24. In the face of this inquiry, TMI recognized the potential risk of the real-estate market going south, but repeatedly reassured analysts and its investors that its liquidity position-its ability to satisfy debt obligations as they arise-was not at risk. See CCAC ¶¶ 7, 82, at 3, 24-25. As late as July 20, 2007, TMI reported that its unencumbered assets securing its highly leveraged financing were at their highest level “in the history of the organization.” CCAC ¶ 7, at 3. From a leverage perspective, our adjusted equity to asset ratio was 8.19%, up from 8.01% in the first quarter, so we did deleverage a little bit during the quarter, and my suspicion is that we will deleverage a little bit further as we move-as we go through the second quarter. We are a little bit nervous about the liquidity issues and the skittishness in the mortgage market, and this might just be an environment to be a little bit more cautious and a little more prudent. However, our unencumbered asset portfolio continues to be very, very strong. That number is, I think we have closed the quarter with the highest level of unencumbered assets in the history of the organization, $1.6 billion of unencumbered assets, so we have plenty of liquidity as our hedge strategy, our duration management and interest rate risk strategy, and the high credit quality of our portfolio performs as we would have expected it to perform. CCAC ¶ 83, at 25 (emphasis in CCAC). TMI repeatedly stated in its filings with the SEC that its focus was to acquire and originate high quality, highly liquid mortgage assets such that sufficient assets could be readily converted to cash, if necessary, to meet its financial obligations. See CCAC ¶ 9, at 4. The Defendants-or, at least Goldstone — stated throughout the Class Period that TMI was “exclusively” focused on the “prime” loan mortgage market, which is characterized by loans made to borrowers with a credit score above 620, a debt-to-ineome ratio no greater than seventy-five percent, and a combined loan-to-value ratio of ninety percent. CCAC ¶ 10, at 4. TMI’s highest-ranking executives repeatedly denied that TMI originated lower-quality “subprime” or Alt-A loans, and, as a result, represented that TMI’s asset base and earnings potential were not financially exposed to the decline in the subprime and Alt-A mortgage markets. CCAC ¶ 11, at 4. “Alt-A loans are ‘alternatives’ to the gold standard of conforming, GSE-backed mortgages. Often an Alb-A borrower is unable to provide the proof of income or the verification of assets necessary to obtain a prime mortgage, but has a satisfactory credit score, or vice versa.” CCAC ¶ 98, at 29. “In other words, Alt-A or ‘alternative’ loans are associated with and defined by a higher level of risk than prime loans due to a borrower’s inability to provide these fundamental guarantees.” CCAC ¶ 98, at 29. See CCAC ¶ 11, at 4. TMI’s multi-billion dollar asset portfolio during the Class Period was comprised of various mortgage-related assets. See CCAC ¶ 12, at 4. TMI’s mortgage-based holdings include both loans it originates, and loans it acquires or purchases. See CCAC ¶ 12, at 4-5. TMI also purchased MBSs, which it frequently posted as the collateral under its many short-term borrowing agreements. See CCAC ¶ 12, at 4-5. TMI would originate loans, securitize them, and sell off interests in the securitized assets to obtain additional financing. See CCAC ¶ 12, at 4-5. In 2006 and 2007, as the markets for subprime and Alt-A mortgages began to decline, and subprime and Alt-A borrowers began to default with increased frequency, many mortgage lenders, such as Countrywide, announced that they were experiencing serious financial and operational problems. See CCAC ¶ 13, at 5. The Defendants insisted, however, that TMI’s stringent underwriting standards and “high quality” assets insulated it from the market downturn, and, in fact, positioned TMI to benefit from the economic environment. CCAC ¶ 13, at 5. As early as April 2007, however, TMI acknowledged burgeoning concerns with the Alh-A mortgage market, but assured its investors that TMI was different than the typical mortgage company and, thus, shareholders’ investments in TMI were safe. See CCAC ¶ 13, at 5. Notwithstanding the Defendants’ repeated representations that TMI’s focus is on originating prime-rather than subprime or Alfi-A-loans, several confidential witnesses with direct knowledge of TMI’s internal practices state that TMI originated Alt-A loans during the Class Period. See CCAC ¶ 14, at 5-6. During the Class Period, the inclusion of Alb-A assets in TMI’s investment portfolio was adversely affecting its balance sheet by: (i) being illiquid/non-salable; and (ii) declining in value, which triggered margin calls from RPA counter-parties on RPAs in which the Alb-A assets were being held as collateral. See CCAC ¶ 15, at 6. Nevertheless, on June 6, 2007, Goldstone stated, during a North America REIT’s Investor Forum, that TMI occupied a niche in the mortgage-finance market, focusing “exclusively on prime mortgage loan originations, as opposed to subprime.” CCAC ¶ 76, at 22-23. He further stated: [Underwriting a $100,000 loan and underwriting a $1 million loan is essentially the same process. So if you can spread your underwriting costs over a $1 million loan as opposed to over a $100,000 loan, you’ve got a more profitable transaction ----[TMI] actually spend[s] more money than most people in the industry on underwriting loans [to] get the credit quality and the portfolio correct, [and] to do [its] due diligence [it] can justify that incremental or additional expense from an underwriting perspective because [it is] amortizing or capitalizing that expense against a much larger average loan size. So consequently, it actually end[s] up with a competitive advantage as it relates to everybody else in the industry. CCAC ¶ 76, at 22-23 (alterations in original). Also, throughout the Class Period, TMI’s SEC filings asserted that its assets are concentrated in “prime” and “high quality” ARM securities that meet TMI’s “High Quality” criteria. CCAC ¶ 77, at 23. The SEC filings also insisted that TMI’s “primary focus is to acquire and originate high quality, highly liquid mortgage assets such that sufficient assets could be readily converted to cash, if necessary, in order to meet our financial obligations.” CCAC ¶ 79, at 24. Notwithstanding these statements, the Defendants — or, at least Goldstone — knew by no later than June of 2007, but did not disclose, that the ABCP market was shrinking rapidly and, by July 2007, had more or less dried up. See CCAC ¶ 15, at 6; id. ¶¶ 131-32, 134, 250, 263, 288, at 38-40, 74-75, 88. Goldstone allegedly admitted this shrinking market to certain confidential sources during a private meeting on August 8, 2007. See CCAC ¶ 15, at 6. Goldstone also reassured the confidential sources that, notwithstanding the problems in the ABCP market, TMI’s relationships with its lender banks “were fine.” CCAC ¶ 131, at 38-39. Also by July of 2007, the RPA market became an increasingly more costly source of financing as a result, in part, of a combination of declining asset values and the illiquidity of the ABCP market. See CCAC ¶ 16, at 6. After early July, TMI was unable to complete any securitization transaction “based on a lack of buyers in the marketplace.” CCAC ¶ 16, at 6. Notwithstanding these apparent problems, Goldstone made some comments during the July 20, 2007 earnings conference call to the effect that the forces affecting the mortgage market were not a threat to TMI. See CCAC ¶¶ 114, 115, at 34. Goldstone stated that “[TMI is] behaving substantially different than sub-prime originators because [it is] not that. [It is] not an Alt-A originator. [It is] not — [It is] a prime adjustable rate mortgage originator----” CCAC ¶ 114, at 34. Goldstone further stated that “[t]he current credit crisis in the market environment today, the liquidity issues in the marketplace today, are creating a very, very nice opportunity for [TMI].” CCAC ¶ 115, at 34. On August 14, 2007, TMI advised the market, without any warning, that because of liquidity concerns, it was exploring the potential sale of assets. See CCAC ¶¶ 18, 135, 273-74, at 7, 40, 82. TMI had, however, already begun a sale of assets by August 10, 2007. See CCAC ¶¶ 18, 132, 134-35, 137-38, at 7, 39-40. On August 20, 2007, TMI admitted that it had sold approximately thirty-five percent of its portfolio — $20.5 billion of its highest-rated mortgage-backed assets — to meet margin calls on its RPA agreements and to satisfy maturing ABCP obligations. See id. Furthermore, TMI had sold those assets at a discount-approximately ninety-five percent of their face value. See id. ¶ 265(c), at 79. On August 14, 2007, the price of TMI common stock fell forty-three percent, from $13.81 per share to $7.89 per share. See CCAC ¶ 20, at 7. Also on that day, a substantial volume of shares — 27,293,100— were traded. See CCAC ¶ 20, at 7. Allegedly based on the series of false and misleading statements, TMI was able to obtain hundreds of millions of dollars in its securities offerings. See CCAC ¶ 22, at 8. Specifically, TMI made one stock offering in early September of 2007, in which it raised $500 million in sales. See id. Further, it made two offerings in January of 2008, which gathered an additional $212 million in total proceeds. See CCAC ¶ 22, at 8. On February 28, 2008, TMI announced in its 2007 Form 10-K Annual Report that it was forced to meet over $300 million in margin calls under its RPAs. See CCAC ¶ 23, at 8. This disclosure was the first time that TMI announced that it owned $2.9 billion in MBSs backed by Alt-A collateral, and that the declining value of its Alt-A-backed MBSs was to blame for the margin calls. Also on February 28, 2008, upon the release of the above information, TMI’s common stock dropped in value again-this time fifteen percent, from $11.54 per share to $9.86 per share. See CCAC ¶ 24, at 8. TMI stock traded heavily that day, with 21,012,500 shares changing hands. See CCAC ¶ 24, at 8. TMI had not, however, met all of its margin-call obligations. On February 28, 2008 — the same day as the release of TMI’s 2007 Form 10-K — JP Morgan Chase notified TMI that TMI had defaulted on a $320 million loan by failing to meet an earlier margin call of $28 million. See CCAC ¶ 25, at 8-9. On March 3, 2008, TMI disclosed via a press release that it had “been subject to additional margin calls of approximately $270 million as of February 29, 2008,” and that it was “currently in default with one RPA counterparty.” CCAC ¶¶ 26, 171, at 9, 48. TMI also stated that “the lender had not yet exercised its right to liquidate pledged collateral,” which the Plaintiffs assert was false, and TMI also stated that, “to the extent any other RPA contains a cross-default provision, the related lender could declare an event of default at any time,” which the Plaintiffs assert was misleading. CCAC ¶ 26, at 9; id. ¶ 372, at 113 (quoting TMI’s March 3, 2008 Form 8-K). JP Morgan had already told TMI: (i) that TMI was in default; and (ii) that JP Morgan planned to exercise its rights under the RPA. See CCAC ¶ 27, at 9. Also, TMI did not disclose that all of its RPA agreements included cross-default provisions, meaning that any company with which TMI had an RPA could declare a default event and demand buy-back of the TMI RPAs. See CCAC ¶ 27, at 9. After that disclosure, TMI’s stock price fell yet again. Between February 29, 2009 and March 3, 2009, the price of TMI common stock decreased from $8.90 per share to $4.32 per share-a drop of fifty-one percent. See CCAC ¶ 28, at 9. Over the course of those three days, investors traded 76,858,800 shares of TMI stock. See CCAC ¶ 28, at 9. On March 4, 2008, TMI’s auditor, KPMG, LLP sent TMI a letter informing TMI that it was withdrawing its unqualified audit opinion contained in TMI’s Form 10-K for 2007. See CCAC ¶29, at 9-10. KPMG stated that, “due to conditions and events that were known or should have been known to the company,” the 2006 and 2007 year-end financial statements “contain material misstatements associated with available for sale securities,” and that “substantial doubt exists relative to [TMI]’s ability to continue as a going concern.” CCAC 1129, at 9-10 (alterations omitted). KPMG demanded that TMI “make appropriate disclosure of the newly discovered facts” and that its previous opinion letter “could no longer be relied upon.” CCAC ¶ 29, at 9-10. Only one week earlier, KPMG had issued an unqualified audit opinion for TMI. See CCAC ¶ 30, at 10. On March 5, 2008, TMI disclosed to its investors that the February 28, 2009 JP Morgan default had triggered cross-defaults in all of TMI’s RPAs. See CCAC ¶ 32, at 10. On the same day, the price of TMI’s common stock fell again, from $3.40 per share to $1.26 per share — a 54.4% drop. See CCAC ¶ 33, at 10. On March 6, 2008, TMI received a letter from the NYSE informing TMI that the NYSE had commenced an investigation into transactions in TMI’s common stock in January of 2008. See CCAC ¶34, at 10- 11. The investigation was ostensibly regarding the impact of recent market events in the mortgage industry on TMI’s book value. See CCAC ¶ 178, at 51. TMI did not disclose the existence of the letter or the investigation that day. See CCAC ¶ 34, at 11. On March 7, 2008, TMI disclosed to the public that it received the letter from KPMG and further announced that it would restate its financial statements for 2007-but not for 2006. See CCAC ¶ 35, at 11. TMI stated that the restatement was necessary because of “a significant deterioration of prices of MBS[s], combined with a liquidity position under unprecedented pressure from increased margin calls[,] a portion of which [TMI] has been unable to meet.” CCAC ¶ 35, at 11 (alterations omitted). TMI also stated that its restatement would result in a $427.8 million impairment charge on its balance sheet to reflect the fact that it may not have the ability to hold certain ARM assets to maturity. See CCAC ¶ 35, at 11. Between March 7, 2008 and March 10, 2008, TMI’s stock price fell another thirty-six percent, from $1.08 to $0.69. See CCAC ¶37, at 11- 12. Between March 7, 2008 and March 10, 2008, 34,591,800 shares were traded. See CCAC ¶ 394, at 120. On March 11, 2008, TMI filed the restatement of its financials. See CCAC ¶ 35, at 11. The impairment charge listed on the restated financial statement was $676.6 million. See CCAC ¶35, at 11. The restatement resulted in a $300,000.00 reduction in management fees and a $5.4 million reduction in fourth-quarter performance fees. See CCAC ¶ 35, at 11. The Plaintiffs allege that the restatement reflected an impairment to TMI’s asset portfolio as of December 31, 2007 and not as of March, 2008. Problems continued to pile on TMI. On March 12, 2008, TMI announced that it had defaulted on a $49,000,000.00 RPA with Morgan Stanley, because it could not meet a $9,000,000.00 margin call. See CCAC ¶ 38, at 12. This default allegedly led to a further decrease in TMI’s stock price. See CCAC ¶ 38, at 12. On March 19, 2008, TMI announced that it had entered into a bailout agreement with five of its remaining lenders to obtain approximately $5.8 billion in financing. See CCAC ¶ 39, at 12. Goldstone admitted that the deal would significantly dilute the value of TMI common stock, and that the deal was the only way to “give the company the liquidity and staying power to remain afloat.” CCAC ¶ 39, at 12. On the same day, the price of TMI stock fell again. See id. The price per share of TMI common stock dropped fifty percent, from $3.00 per share to $1.50 per share. See CCAC ¶ 39, at 12. On April 28, 2008 — seven weeks after TMI received the NYSE letter — TMI informed the investing public that the NYSE had commenced an investigation of some of its January 2008 trading. See CCAC ¶ 178, at 51. Likely because April 28, 2008 is outside the Class Period, the Plaintiffs do not attempt to causally tie any particular adverse effect to this disclosure. They emphasize, however, how long it took— seven weeks — for TMI to disclose that the NYSE had commenced this investigation. See CCAC ¶ 178, at 51. During those seven weeks, the Plaintiffs point out, TMI issued nine SEC filings and press releases, and none of them mentioned the investigation. See 1934 Act Response at 10. 5. TMI’s Public Offerings and SEC Filings. The Plaintiffs allege that the Defendants are strictly liable for violations of Sections 11, 12(a)(2), and 15 of the Securities Act, 15 U.S.C. §§ 77k, 77Z(a)(2), and 77o, respectively. See CCAC ¶ 40, at 12. The allegations arise out of four events: (i) the May 4, 2007 public offering of 4,500,000 shares of common stock at $27.05 per share, which resulted in gross proceeds of $121.7 million; (ii) the June 19, 2007 public offering of 2,750,000 shares of 7.5% Series E Cumulative Convertible Redeemable Preferred Stock (“Series E Stock”) at $25.00 per share, which resulted in gross proceeds of $68,800,000.00; (iii) the September 7, 2007 public offering of 20,000,000 shares of 10% Series F Cumulative Convertible Redeemable Preferred Stock (“Series F Stock”) at $25.00 per share, which resulted in gross proceeds of $500 million; and (iv) the January 15, 2008 concurrent public offering of eight million shares of Series F Stock at $19.50 per share, which resulted in gross proceeds of $156 million, and seven million shares of common stock at $8.00 per share, which resulted in gross proceeds of $56,000,000.00. CCAC ¶ 40, at 12. All of these public offerings were made pursuant to a Shelf Registration Statement (“SRS”), filed with the SEC on Form S-3 on May 20, 2005, and a Prospectus that became effective on June 16, 2005. CCAC ¶ 42, at 13. The SRS prospectively incorporates by reference: any documents [the Company] file[s] pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus and prior to the termination of the offering of the securities to which this prospectus relates will automatically be deemed to be incorporated by reference in this prospectus and to be part hereof from the date of filing those documents. CCAC ¶ 42, at 13 (presumably quoting the SRS). Thus, the SRS incorporates by reference certain of the quarterly, annual, and current reports. See CCAC ¶42, at 13. The May 2007 Offering was made pursuant to: (i) the SRS; (ii) a Preliminary Prospectus Supplement filed with the SEC on form 424B5 on May 3, 2007; and (iii) a Prospectus Supplement filed with the SEC on Form 424B2 on May 7, 2007. See CCAC ¶ 43, at 13. The June 2007 Offering was made pursuant to: (i) the SRS; (ii) a Preliminary Prospectus Supplement, filed on Form 424B5 on June 11, 2007; (iii) a Final Term Sheet, filed with the SEC as a Free Writing Prospectus on June 15, 2007; and (iv) a Definitive Prospectus Supplement, filed with the SEC on Form 424B2 on June 18, 2007. See CCAC ¶44, at 13-14. The September 2007 Offering was made pursuant to: (i) the SRS; (ii) a Free Writing Prospectus filed with the SEC on August 30, 2007; (iii) a Preliminary Prospectus Supplement dated and filed with the SEC on Form 424B5 on August 30, 2007; (iii) a Final Term Sheet dated August 30, 2007; and (iv) a Prospectus Statement dated August 30, 2007, and filed with the SEC on Form 424B2 on September 4, 2007. See CCAC ¶ 45, at 14. The January 2008 Offerings were made pursuant to: (i) the SRS; (ii) two Preliminary Prospectus Supplements filed on Forms 424B5 on January 9, 2008; and (iii) two Prospectus Supplements filed on Forms 424B2 on January 15, 2008. See CCAC ¶46, at 14. 6. How TMI Makes Money. TMI is not a bank or savings-and-loan institution, but its business purpose, strategy, and methods of operation are very similar to those of banks and savings-and-loans. The primary distinction is that, unlike a bank, TMI finances the purchase and origination of its ARM assets with equity capital, unsecured debt, CDOs, and short-term borrowing, instead of deposits or federal advances. Goldstone, during a November 27, 2007 earnings conference, explained: We are a portfolio lender. I would contrast that with a mortgage banking strategy. By mortgage banker, I mean that’s a company who is in the business of originating mortgages and they then turn around and sell them to third parties and they book gain on sale, present value future cash flows as part of that gain on sale. That’s not the business that we are in. We’re a portfolio lender. We originate loans and acquire assets principally to hold on our balance sheet and our income and profitability is generated by the spread or the net difference between the income that we earn, or the interest that we earn on our assets, and our cost of funds. CCAC ¶ 72, at 21-22. The Plaintiffs insist that this business model results in a need to continuously acquire capital and increase the magnitude of its balance sheet. See CCAC ¶ 73, at 22. They further insist that the model requires TMI to have ready access to cash to achieve growth and to maintain stability during market downturns. See CCAC ¶ 73, at 22. The composition of TMI’s asset portfolio was a significant aspect of its business plan throughout the Class Period. See CCAC ¶ 78, at 23. TMI acquires cash needed to fund its operation in three primary ways: (i) equity offerings, including selling of preferred and common stock; (ii) short-term borrowing, such as RPAs and ABCP; and (iii) CDOs. See CCAC ¶73, at 22. Sale of CDOs were a significant source of funding, but became more difficult to consummate as the mortgage financing market declined during the Class Period, particularly for those securities rated less than AAA. See CCAC ¶ 75, at 22. TMI even encountered difficulties selling its AAA-rated CDOs during the Class Period. See CCAC ¶ 75, at 22. 7. The Plaintiffs’ Motive-Based, Facts. Another business entity, Thornburg Mortgage Advisory Corporation (“TMAC”), manages and runs TMI. See CCAC ¶ 193, at 57-58. Thornburg is the CEO of TMAC. See CCAC ¶ 193, at 57-58. Of the other individuals that run TMAC, many are also TMI executives, including Goldstone and Senior Vice Presidents Nathan Fellers and Ann Beckett. See id. TMAC executives were paid from management fees that TMAC earned under its Management Agreement with TMI. TMAC’s management fee was based on TMI’s “Average Historical Equity,” ie., the difference between total assets and total liabilities calculated each month. CCAC ¶ 194, at 58. The Plaintiffs insist that this fee structure provided an incenfive to grow the size of TMI’s asset base to get more income for TMAC and, therefore, more executive compensation. See CCAC ¶ 194, at 58. At least one analyst has concluded that “this management structure could produce a potential conflict of interest between the external manager and shareholders, particularly about the appropriate size of assets during different phases of a business cycle.” CCAC ¶ 195, at 58. PROCEDURAL BACKGROUND On May 27, 2008, the Plaintiffs filed the CCAC against the Defendants, asserting claims arising under Sections 10(b) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78j(b) and 78t(a), and Sections 11, 12(a)(2), and 15 of the Securities Act, 15 U.S.C. §§ 77k, 77Z(a)(2), and 77o. Specifically, the Plaintiffs asserted: (i) claims against the Individual Defendants for violations of Section 10(b) of the Exchange Act and of Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5; (ii) claims against the Individual Defendants for violations of Section 20(a) of the Exchange Act; (iii) claims against the Individual Defendants, the Underwriter Defendants, and the Director Defendants for violations of Sections 11 and 12(a)(2) of the Securities Act; and (iv) claims against the Individual Defendants for violations of Section 15 of the Securities Act. On September 22, 2008, the Defendants moved to dismiss all of the Plaintiffs’ claims. See Motion to Dismiss Consolidated Amended Complaint by Defendants Thornburg Mortgage, Inc., Garrett Thorn-burg, Larry A. Goldstone, Joseph H. Badal, Paul G. Decoff, Clarence D. Simmons, Ann-Drue M. Anderson, David A. Ater, Eliot R. Cutler, Ike Kalangis, Owen M. Lopez, Francis I. Mullin, Jr., and Stuart C. Sherman, filed September 22, 2008 (Doc. 126); Opposed Motion by May/June 2007 Underwriter Defendants to Dismiss Consolidated Class Action Complaint; Memorandum of Points and Authorities in Support Thereof, filed September 22, 2008 (Doc. 128); Opposed Motion to Dismiss of Underwriter Defendants UBS Securities LLC and Bear Stearns & Co., Inc., filed September 22, 2008 (Doc. 130); Motion of Friedman, Billings, Ramsey & Co, Inc. to Dismiss and Memorandum of Points and Authorities in Support Thereof, filed September 22, 2008 (Doc. 132). On December 22, 2008, the Plaintiffs filed briefs in opposition to the Defendants’ motions to dismiss. See Plaintiffs’ Opposition to the Motions to Dismiss Plaintiffs’ Securities Act Claims Submitted By: 1) Thornburg Mortgage, Inc., Garrett Thornburg, Larry A. Goldstone, Joseph H. Badal, Paul G. Decoff, Clarence D. Simmons, Anne-Drue M. Anderson, David A. Ater, Eliot R. Cutler, Ike Kalangis, Owen M. Lopez, Francis I. Mullin, Jr., and Stuart C. Sherman; 2) The May/June 2007 Underwriter Defendants; 3) Friedman, Billings, Ramsey & Co., Inc.; 4) UBS Securities LLC and Bear Stearns & Co, Inc.; and 5) Stifel, Nicolaus & Company, Incorporated, filed December 22, 2008 (Docs. 152, 153); Plaintiffs’ Opposition to Defendants’ Motion to Dismiss Consolidated Amended Complaint Filed by Thornburg Mortgage, Inc., Garrett Thorn-burg, Larry A. Goldstone, Joseph H. Badal, Paul G. Decoff, Clarence D. Simmons, Anne-Drue M. Anderson, David A. Ater, Eliot R. Cutler, Ike Kalangis, Owen M. Lopez, Francis I. Mullin, Jr., and Stuart C. Sherman, filed December 22, 2008 (Docs. 154, 155, 156, 157). On February 5, 2009, the Defendants filed reply briefs in further support of their motions. See Reply in Support of Opposed Motion by May/June 2007 Underwriter Defendants to Dismiss Consolidated Class Action Complaint, filed February 5, 2009 (Doc. 165); Joinder of Underwriter Defendant Stifel, Nicolaus & Company, Incorporated in Reply in Support of Motion to Dismiss, filed February 5, 2009 (Doc. 166); Reply Memorandum (and Joinder) in Support of Motion to Dismiss by Underwriter Defendants UBS Securities LLC and Bear, Stearns & Co., Inc., filed February 5, 2009 (Doc. 167); Reply Memorandum in Support of Motion to Dismiss Consolidated Amended Complaint by Defendants Thornburg Mortgage, Inc., Garrett Thornburg, Larry A. Goldstone, Joseph H. Badal, Paul G. Decoff, Clarence D. Simmons, Anne-Drue M. Anderson, David A. Ater, Eliot R. Cutler, Ike Kalangis, Owen M. Lopez, Francis I. Mullin, Jr., and Stuart C. Sherman, filed February 5, 2009 (Doc. 168); Reply in Support of Motion of Friedman, Billings, Ramsey & Co., Inc. to Dismiss, filed February 5, 2009 (Doc. 170). On April 22, 2009, the Court heard oral argument from the Plaintiffs and the Defendants in connection with the Defendants’ motions to dismiss the CCAC. During oral argument on April 22, 2009, counsel for Friedman Billings Ramsey, one of the Underwriter Defendants, conceded that Regulation S-K’s disclosure obligations bind the Defendants: “There are two requirements in judging our securities filings. One, we have to say certain things. Reg S-K and S-C provide what we have to say. And then otherwise, we cannot misrepresent what we do say. We cannot say something that’s false or would mis-lead.” Transcript of Hearing at 38:12-18 (taken April 22, 2009)(Gut-man). The Plaintiffs’ counsel concurred in the interpretation of the Defendants’ disclosure obligations. See id. at 196:24-197:10 (Court, Zivitz). On January 27, 2010, the Court issued two Memorandum Opinions and Orders, granting in part and denying in part the Defendants’ motions to dismiss the CCAC. See Memorandum Opinion and Order, 683 F.Supp.2d 1236, 1261 (D.N.M.2010) (Doc. 251)(“MOO”); Amended Memorandum Opinion and Order, 695 F.Supp.2d 1165 1225- (D.N.M.2010) (Doc. 252)(“Amended MOO”). The Court dismissed the Plaintiffs’ claims arising under Sections 11, 12(a)(2), and 15 of the Securities Act against all of the Defendants. The Court dismissed the claims based on Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder, against Thorn-burg, Badal, Decoff and Simmons. The Court dismissed the Section 20(a) claims against Thornburg and Badal. The Court allowed the Section 10(b) claims to proceed against Goldstone, and, because TMI is in bankruptcy and subject to the automatic stay of 11 U.S.C. § 362, the Court reserved ruling on Section 10(b) claims against TMI and on the Section 20(a) claims against Goldstone, Simmons, and Decoff. In dismissing the Plaintiffs’ claims arising under Sections 11 and 12(a)(2) of the Securities Act, the Court noted that liability attaches in two instances: (i) where a defendant omits to disclose information that the law requires the defendant to disclose; or (ii) where a defendant issues a materially false or misleading statement in a registration statement or prospectus. See MOO at 1249-51. The Court further held that liability cannot be premised on silence in the absence of a duty to disclose and held that the Plaintiffs “failed to provide the Court with the source of such a duty.” Amended MOO at 1223 (citation omitted). See MOO at 1258-59. In dismissing the Plaintiffs’ claims arising under Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder, the Court noted that the sources of a duty to disclose information under the federal securities laws are found either: (i) in express mandates of the statute and rules promulgated under the statute; or (ii) in the general anti-fraud provisions of the statutes and rules. See Amended MOO at 1209. The Court further stated that the Plaintiffs failed to provide such a source for the Defendants’ disclosure duties: The Plaintiffs have not pointed to any statute or SEC regulation that demands disclosure of the facts allegedly withheld, nor, after careful review, does the Court find any disclosed facts that were rendered materially false or misleading in the absence of the withheld facts. As such, the Court finds that the Defendants did not have a duty to disclose these allegedly withheld facts. Amended MOO at 1209. In analyzing the Plaintiffs’ Section 20(a) claims against Thornburg and Badal, the Court noted that “the only articulable act or omission by TMI as an entity, the misleading Form 8-K dated March 3, 2008, was filed after Thornburg’s tenure as CEO ended” and after Badal had retired from TMI. Amended MOO at 1217-18. As a result, the Court dismissed the Plaintiffs’ Section 20(a) claims against these two individuals. The remedy the Defendants sought in moving to dismiss was a dismissal with prejudice. In opposing the Defendants’ motions to dismiss, however, the Lead Plaintiffs requested leave to amend in the event that the Court found the CCAC to be deficient in any way. See Plaintiffs’ Opposition to Defendants’ Motion to Dismiss Consolidated Amended Complaint at 58 n. 48; Plaintiffs’ Opposition to the Motions to Dismiss Plaintiffs’ Securities Act Claims at 32. The Memorandum Opinions and Orders did not state, however, whether the dismissals were with or without prejudice. On February 5, 2010, the Plaintiffs filed a Motion for Clarification of the Court’s January 27, 2010 Memorandum Opinions and Orders Granting in Part and Denying in Part Defendants’ Motions to Dismiss the Consolidated Amended Complaint, see Doc. 254 (“Motion for Clarification”), ostensibly asking the Court to clarify this apparent ambiguity. Specifically, the Plaintiffs requested that the Court: (i) order that the Court issued the Memorandum Opinions and Orders without prejudice; and (ii) allow the Plaintiffs to amend the CCAC to cure the averments it held to be deficient. In their motion, the Lead Plaintiffs asserted that, if permitted, they would amend the CCAC to address the following: (i) the Court’s holding that the Plaintiffs failed to state a claim under Sections 11 and 12(a) of the Securities Act, to discuss, among other things, the impact of Regulation S-K, 17 C.F.R. § 229.303, and Regulation S-X, 17 C.F.R. § 210.4-01, on the Defendants’ liability for material omissions from the offering documents; (ii) the Court’s implicit finding that TMI was not liable for Goldstone’s misrepresentations in June 2007 and July 2007, insofar as that finding affects the Individual Defendants’ liability under Section 20(a); (iii) the Individual Defendants’ liability under Section 20(a) of the Exchange Act as a result of TMI’s failure to comply with its affirmative duty pursuant to Section 10(b) of the Exchange Act to disclose all material, nonpublic information in its possession before selling $900 million in TMI securities during the Class Period; and (iv) the Court’s holding that the alleged misstatements in TMI’s offering documents are not actionable. See Motion for Clarification ¶ 9, at 4. The Lead Plaintiffs devoted substantial time and space, however, to arguing the legal merits of their case, and insisted that, if permitted, they would add additional factual and legal assertions to the CCAC from which the Court would conclude that they had stated a proper claim. See Motion for Clarification ¶¶ 9-29, at 4-12. Specifically, the Lead Plaintiffs represented that they intended to add additional factual and legal allegations to state a claim under Sections 11 and 12(a) of the Securities Act, additional allegations to show that TMI was obligated to disclose all material non-public information in its possession, and additional allegations that would allow it to state a claim under Section 20(a) of the Exchange Act against Thornburg and Badal. The Defendants opposed the Plaintiffs’ Motion for Clarification on February 18, 2010. See Certain D & O Defendants’ Response in Opposition to Plaintiffs’ Motion for Clarification of the Court’s January 27, 2010 Memorandum Opinions and Orders Granting in Part and Denying in Part Defendants’ Motions to Dismiss the Consolidated Amended Complaint, filed February 18, 2010 (Doc. 257); Defendants Joseph H. Badal, Paul Decoff, Michael Jeffers, Owen Lopez and Stuart Sherman’s Joinder to Certain D & O Defendants’ Response in Opposition to Plaintiffs’ Motion for Clarification [Docket No. 257] of the Court’s January 27, 2010 Memorandum Opinions and Orders Granting in Part and Denying in Part Defendants’ Motions to Dismiss the Consolidated Amended Complaint, filed February 18, 2010 (Doc. 259); Joinder of Defendants Goldstone and Simmons in Certain D & O Defendants’ Memorandum of Law in Opposition to Plaintiffs’ Motion for Clarification, filed February 22, 2010 (Doc. 261); Underwriter Defendants’ Opposition to Lead Plaintiffs’ Motion for Clarification of the Court’s January 27, 2010 Memorandum Opinions and Orders Granting in Part and Denying in Part Defendants’ Motions to Dismiss the Consolidated Amended Complaint, filed February 18, 2010 (Doc. 258). The only Defendant who did not appear to oppose the Lead Plaintiffs’ motion was TMI, against whom this action is stayed under 11 U.S.C. § 362. The Plaintiffs made clear that their Motion for Clarification sought no relief as to TMI. On March 4, 2010, the Plaintiffs filed their reply papers. See Plaintiffs’ Reply Memorandum of Law in Further Support of Their Motion for Clarification of the Court’s January 27, 2010 Memorandum Opinions and Orders Granting in Part and Denying in Part Defendants’ Motions to Dismiss the Consolidated Amended Complaint and in Response to the Underwriter Defendants’ Opposition Thereto, filed March 4, 2010 (Doc. 271); Plaintiffs’ Reply Memorandum of Law in Further Support of Their Motion for Clarification of the Court’s January 27, 2010 Memorandum Opinions and Orders Granting in Part and Denying in Part Defendants’ Motions to Dismiss the Consolidated Amended Complaint and in Response to Certain D & O Defendants’ Opposition Thereto, filed March 4, 2010 (Doc. 272). On June 9, 2010, the Court heard oral argument in connection with the Plaintiffs’ motion for clarification. At the hearing, the Court opened up conversation by giving the parties its initial impression of the motion. The Court stated that, because the issue whether the Lead Plaintiffs could amend was not addressed in the opinion, and the parties seek different outcomes on that point-the Defendants sought dismissal with prejudice, the Lead Plaintiffs sought leave to amend if the CCAC was found deficient — the Motion Seeking Clarification was appropriate. See Transcript of Hearing at 8:17-24 (taken June 9, 2010)(“June 9, 2010 Tr.”)(Court). The Court stated that it would thus grant the motion to clarify. See June 9, 2010 Tr. at 8:17-24 (Court); id. at 30:11-14 (Court). In granting the Plaintiffs’ motion, the Court clarified that, because the lawsuit is still, in many respects, in its infancy, it would be inclined to allow the Lead Plaintiffs to file a motion to amend and/or a motion for reconsideration. See June 9, 2010 Tr. at 8:25-12:10 (Court). The Court stated that, at this early stage, it would be inclined to allow the Lead Plaintiffs to amend and that it believed there might exist factual allegations that the Lead Plaintiffs could add to cure their pleading deficiencies. See June 9, 2010 Tr. at 9:7-10:4 (Court). The Court also said that the Lead Plaintiffs would have to file a motion to amend, not file an amended complaint, so that the Court and the Defendants could decide whether the amendment would be futile. See June 9, 2010 Tr. at 8:25-9:6 (Court). The Court then said it thought that most of the Lead Plaintiffs’ motion to clarify was not, in fact, a motion to clarify or a motion to amend, but was a motion to reconsider. See June 9, 2010 Tr. at 9:7-12:10 (Court). It appeared to the Court that the Lead Plaintiffs disagreed with the Court on some of its rulings. See June 9, 2010 Tr. at 9:7-15 (Court). The Court thought that the Lead Plaintiffs needed to file a motion to reconsider on those issues, rather than trying to get such review on a motion to amend, so the Court and the Defendants could see clearly where the Lead Plaintiffs disagree with the Court’s legal conclusions on full briefing. See June 9, 2010 Tr. at 9:7-12:10 (Court). The Court was concerned that it did not yet have the benefit of a full briefing from the Defendants on the issues on which the Lead Plaintiffs want reconsideration. See June 9, 2010 Tr. at 12:7-10 (Court). The Court then allowed the parties to argue, being informed of the Court’s inch-nations. Benjamin Sweet, attorney for the Lead Plaintiffs, gave some examples of additional factual allegations that the Lead Plaintiffs would add if given the opportunity to amend the CCAC. See June 9, 2010 Tr. at 15:6-16:7 (Sweet). Betsy Manifold, also an attorney for the Lead Plaintiffs, suggested allegations that the Lead Plaintiffs would add to further support their control-person claims and the scienter element of their Section 10(b) claims against certain Individual Defendants. See June 9, 2010 Tr. at 18:9-25 (Manifold). Ms. Manifold admitted, however, that what they sought was a hybrid motion for leave to amend and motion to reconsider. See June 9, 2010 Tr. at 19:4-11 (Manifold). Mr. Sweet conceded that he would be satisfied if the Court allowed the Lead Plaintiffs to file motions to amend and for reconsideration, rather than grant the relief sought in those motions on the motion for clarification. See June 9, 2010 Tr. at 29:12-15 (Court, Sweet). Steven Farina, Defendant Friedman, Billings, Ramsey & Co., Inc.’s attorney, argued that any motion to amend or for reconsideration would be futile, because the proposed amendments do not cure the deficiencies that the Court has found in the CCAC and because there exist no grounds for reconsideration. See June 9, 2010 Tr. at 20:13-23:21 (Court, Farina). Mr. Farina expressed concerns that the Lead Plaintiffs were blurring the standards used to review those two motions, and conceded that requiring the Lead Plaintiffs to file a written motion would help with that potential problem. See June 9, 2010 Tr. at 23:14-24:20 (Court, Farina). David Bohan, the attorney for UBS Securities and Bear, Stearns, argued that the Court should deny the motion to amend, because the Lead Plaintiffs should have brought the motion to amend when the new facts came to their attention, rather than waiting until after the motions to dismiss were granted in part and then challenging whether those dismissals were with or without prejudice. See June 9, 2010 Tr. at 25:4-27:17 (Court, Bohan). Jonathan Dickey, counsel for certain Underwriter Defendants, expressed his confidence that the Lead Plaintiffs’ motion to amend and motion to reconsider would fail. See June 9, 2010 Tr. at 28:8-13 (Dickey). He also reminded the Court that his clients are currently dismissed from the action and stressed that the amendment/reconsideration process should move swiftly, and not become a series of rolling amendments as the Plaintiffs try to mend the CCAC and repair their claims against dismissed Defendants. See June 9, 2010 Tr. at 27:20-28:25 (Dickey). At the June 9, 2010 hearing, the Court instructed the Plaintiffs to file their motion within thirty days, orally setting forth detailed instructions on how the Plaintiffs should structure their motion. Thereafter, on July 5, 2010, the Court issued a Memorandum Opinion and Order granting the Plaintiffs’ motion for clarification, and setting forth in writing the instructions the Court had set forth orally. See Doc. 300 (July 5, 2010 MOO). In its July 5, 2010 MOO, the Court stated: The Lead Plaintiffs should submit the motion to amend and the motion to reconsider as one motion. The motion should have two sections. Section one should discuss the motion to amend and all the traditional issues that rule 15 of the Federal Rules of Civil Procedure raise. The Lead Plaintiffs should set forth their new facts — facts that the Court did not previously have before it — which, if the Court had known the facts, would have changed the outcome of the motion. The Lead Plaintiffs should also address precisely how these new facts would have changed the Court’s conclusions. This section should deal only with the new facts and how the new facts would change the analysis as the Court has performed it. The Court asks the Lead Plaintiffs to be particularly intellectually honest on this point. This section should not argue that the Court was incorrect on any particular rule of law in its prior opinion, ie., that the Court failed to consider the abstain- or-disclose rule, that the facts in the CCAC allege violations of Regulations S-X or S-K, or some other issue of law that the Lead Plaintiffs could have argued in response to the motions to dismiss. The first section should be strictly a motion to amend under rule 15. The second section should encapsulate the proposed motion to reconsider. In writing that section, the Lead Plaintiffs should not assume that the motion to amend will be granted, and so the Lead Plaintiffs should not assume that the Complaint contains facts that it will add in its proposed amendment. In this section, the Lead Plaintiffs can address the errors of law that they believe the Court made, but must address them in the context of a motion for reconsideration and explain why the alleged errors justify reconsideration under the appropriate legal standard. July 5, 2010 MOO at 18-20, 2010 WL 2998471. The Plaintiffs now request that the Court: (i) grant them leave to amend the CCAC; and (ii) reconsider certain portions of its January 27, 2010 orders granting in part and denying in part the Defendants’ motions to dismiss the CCAC. The Plaintiffs also filed a supporting memorandum. See Plaintiffs’ Memorandum of Law in Support of Omnibus Motion for (i) Leave to Amend the Consolidated Class Action Complaint (ii) For Reconsideration of the Court’s January 27, 2010 Memorandum Opinions and Orders Granting in Part and Denying in Part Defendants’ Motions to Dismiss the Consolidated Amended Complaint, filed January 9, 2010 (Doc. 309)(“Memorandum”). The Defendants oppose the Motion. See Opposition of Defendants Goldstone and Simmons to Plaintiffs’ Motion for Leave to Amend and for Reconsideration, filed August 23, 2010 (Doe. 319)(“Goldstone and Simmons Response”); Defendants Badal, Decoff, Lopez, and Sherman’s Opposition to Plaintiffs’ Omnibus Motion for Leave to Amend and for Reconsideration, filed August 23, 2010 (Doc. 320)(“Badal, Decoff, Lopez, and Sherman’s Response”); Garrett Thorn-burg and Certain Director Defendants’ Response in Opposition to Lead Plaintiffs’ Omnibus Motion for (i) Leave to Amend the Consolidated Class Action Complaint and (ii) for Reconsideration of the Court’s January 27, 2010 Memorandum Opinions and Orders Granting in Part and Denying in Part Defendants’ Motions to Dismiss the Consolidated Amended Complaint, filed August 23, 2010 (Doc. 327); May/ June 2007 Underwriter Defendants’ Opposition to Plaintiffs’ Motion for Leave to Amend and for Reconsideration, filed August 23, 2010 (Doc. 321); Opposition of FBR Capital Markets & Co. To Plaintiffs’ Motion for Leave to Amend and Reconsideration, August 23, 2010 (Doc. 328); Joinder and Supplementary Memorandum of Underwriter Defendants UBS and Bear Stearns in Opposition to Plaintiffs’ Omnibus Motion for Leave to Amend and for Reconsideration, filed August 23, 2010 (Doc. 325); May/June 2007 Underwriter Defendants’ Request for Judicial Notice in Opposition to Plaintiffs’ Motion for Leave to Amend and for Reconsideration, filed August 23, 2010 (Doc. 322). The September 2007 and January 2008 Underwriter Defendants renew their request that, if the Court reconsiders its decision that TMI’s 2007 Form 10-K was not actionable, the Court dismiss the UBS and Bear Stearns, because the Plaintiffs have not cured their lack of statutory standing for their claims based on the January 2008 offering. On October 22, 2010, the Plaintiffs filed their Omnibus Reply in Further Support of Plaintiffs’ Omnibus Motion For: (i) Leave to Amend the Consolidated Class Action Complaint, and (ii) for Reconsideration of the Court’s January 27, 2010 Memorandum Opinions and Orders Granting in Part and Denying in Part Defendants’ Motions to Dismiss the Consolidated Amended Complaint. See Doc. 341 (“Reply”). At the November 3, 2010 hearing, the parties agreed that the Court should first decide whether to reconsider its MOO and then decide whether to grant allow the Plaintiffs leave to file an amended complaint. The Plaintiffs conceded that “there is no Tenth Circuit opinion