Full opinion text
MEMORANDUM OPINION% AND ORDER RICHARD J. HOLWELL, District Judge: Lead Plaintiff State Universities Retirement System of Illinois (“plaintiff’) brings this suit pursuant to Sections 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 and Sections 11, 12(a)(2), and 15 of the Securities Act of 1933. Plaintiff alleges that General Electric (“GE”) failed to disclose information regarding GE’s health and the health of GE Capital, its wholly owned subsidiary, from September 25, 2008 to March 19, 2009 (“the Class Period”), at the height of the recent financial crisis. Plaintiff argues that GE’s Chief Executive Officer (“CEO”), Jeffrey Immelt (“Immelt”), and Chief Financial Officer (“CFO”), Keith Sherin (“Sherin”), made materially misleading statements during the Class Period and in connection with GE’s October 7, 2008 stock offering (“the October Offering”). According to plaintiff, during a time when the financial markets were crumbling and companies across the United States were scrambling to disclose their holdings in subprime loans, GE withheld information regarding its substantial holdings in subprime and non-investment grade loans and touted GE as safe in comparison to its competitors, despite the fact that GE was also feeling the impact of the financial crisis. Plaintiff also alleges that GE Capital’s CEO Michael Neal (“Neal”), CFO Jeffery Bornstein (“Born-stein”), and Chief Operating Officer (“COO”) William Cary (“Cary”) made materially misleading statements regarding GE and GE Capital’s financial health. In addition, plaintiff brings suit against the various companies that underwrote the October Offering (“the underwriter defendants”). Defendants now move to dismiss the Second Amended Class Action Complaint (“SAC”) pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. For the reasons stated below, defendants’ motion to dismiss is granted in part and denied in part. BACKGROUND The following allegations are drawn from the SAC. They are assumed to be true for the purposes of this motion. Despite the fact that the exposition of the facts below is quite lengthy, it is impossible to summarize all of plaintiffs factual allegations in narrative form, and some factual allegations will be discussed as relevant in the discussion section. GE is one of the. largest corporations in America. GE Capital, a wholly owned subsidiary of GE, is a financial services company. Broadly speaking, plaintiff alleges that GE concealed information about its financial health from the investing public in the wake of the economic collapse beginning in September 2008. Plaintiff claims that GE concealed: its difficulty issuing commercial paper; the quality of many of its investments; the fact that many of its assets were overvalued; its inability to pay the full dividend promised; the fact that business at GE Capital was drying up; and the precariousness of its AAA rating. In October 2008, GE announced an offering of stock, allegedly to shore up the company at a time when the company was severely imperiled. According to plaintiff, GE failed to disclose the foregoing financial information and made material misstatements that concealed this information both in the materials for the October 2008 offering (the “Offering Documents” or “Offering Materials”) and on an ongoing basis throughout the Class Period. The financial conditions GE allegedly concealed are as follows: First, GE was allegedly having great difficulty issuing commercial paper around September 2008. Immelt had private conversations with Treasury Secretary Henry Paulson regarding GE’s ability to issue commercial paper that contradicted the rosy picture of GE’s commercial paper program that Immelt presented to the public. Plaintiff draws its description of these telephone conversations from Paul-son’s book, On the Brink. According to Paulson, Immelt called him on September 8, 2008, and again on September 14, 2008, and informed him that GE “was finding it very difficult to sell its commercial paper for any term longer than overnight.” (SAC ¶ 10A-B.) Paulson concluded based on these conversations that GE was having difficulty funding itself. (Id.) Paulson also reported that Immelt called him on October 13, 2008, to lobby him to allow GE to participate in the Temporary Loan Guarantee Program (“TLGP”). (Id., ¶ lOd.) The initial plan for the TLGP was that it would guarantee the short-term unsecured loans of banks. (Id.) Immelt expressed his concern to Paulson that the program as it was then conceived would place GE at a competitive disadvantage to the banks because investors would prefer to lend money to entities whose loans were guaranteed by the government. (Id.) In response to this conversation, Paulson worked to alter the terms of the TLGP so that GE Capital could also participate, and the FDIC eventually changed the program to incorporate this change. (Id.) The plaintiff alleges that GE’s problems rolling out commercial paper continued through the fall of 2008. According to one of plaintiffs confidential witnesses (“CW”), CW 6, the commercial paper markets were “frozen” as of September 25, 2008. (Id., ¶ 138b.) In addition, GE eventually participated in another government program, the Commercial Paper Funding Facility (“CPFF”). (Id., ¶ lOg.) Plaintiff argues that if GE had been able to purchase commercial paper easily on the open market, it would have had no need to participate in the CPFF program. Second, GE disclosed on March 19, 2009, that GE Capital’s portfolio contained a number of lower quality investments. Specifically, GE revealed that “approximately 42% of GE Capital’s $183 billion in total consumer loans were made to non-prime borrowers” (id., ¶ 299) and high percentages of its commercial loans were made to companies with junk level credit ratings (id., ¶302). Plaintiff argues that GE Capital’s portfolio was shaky throughout the Class Period and that GE had an obligation to disclose this information well before the actual date of disclosure. Third, plaintiff alleges that both in the run up to and in the wake of the financial crisis, GE Capital experienced a drop-off in business. Plaintiff has gathered the accounts of various confidential witnesses from different parts of GE Capital in support of this allegation. CWs 8, 12, and 14 describe how GE Capital was having difficulty making new deals in the fall of 2008, stating that business fell off dramatically. (Id., ¶ 73.) CWs 9 and 11 also state that GE Capital’s financial problems were already brewing earlier in the year. (Id.) Fourth, plaintiff alleges that GE did not disclose that its AAA rating was imperiled. According to a January 2009 research note by UBS Investment Research, both Moody’s and Standard & Poor’s stated that GE’s ability to meet its projected earnings of $5 billion for 2009 weighed heavily in their determination of whether GE would retain its AAA rating. (Id., ¶414.) Plaintiff argues that GE should have known that its earnings projections were unrealistic, so these reports should have made GE aware that it was likely to lose its rating. For much the same reason, plaintiff alleges that GE made material misstatements when it “guaranteed” payment of the company’s 2009 dividend. (Id., ¶ 220.) Towards the end of the Class Period, GE revealed that it was experiencing financial strain. On February 27, 2009, GE announced that it would be forced to cut its dividend significantly. (Id., ¶ 279.) Whereas it had planned on issuing a $.31 quarterly dividend per outstanding share of common stock for 2009, Immelt announced that GE would be cutting its dividend to $10 per share. (Id.) On March 12, 2009, GE lost its AAA rating. (Id., ¶ 293.) And on March 19, 2009, GE disclosed to the world that its portfolio contained a number of lower quality loans and corporate bonds. (Id., ¶¶ 299-304.) Throughout its complaint, plaintiff alleges that GE should have disclosed the dangers it faced sooner. False Statements in the October Offering Prospectus On October 1, 2008, Immelt announced that GE would be offering at least $12 billion of common stock to the public and selling an additional $3 billion of preferred stock to Berkshire Hathaway, Inc. (SAC, ¶77.) On October 2, 2008, GE filed a prospectus for the October Offering. (Id., ¶ 81.) The issuance was conducted pursuant a shelf registration statement, a registration statement that GE keeps on file with the SEC to expedite the issuance of additional securities. (Id.) GE filed a supplement to this registration statement on October 2, 2008. (Id.) In addition, the Offering Materials include a number of documents that the supplement incorporated by reference. (Id., ¶ 82.) Plaintiff alleges that these materials contained a number of material omissions and misstatements. In the Offering Materials, GE stated that it had $695 billion in assets. (Id., ¶ 85.) According to plaintiff, this number was inflated. (Id.) Plaintiff identified through its own investigation several former GE employees who indicated that GE regularly failed to write down troubled assets to their true market value. (Id., ¶ 86.) These individuals, identified as confidential witnesses 1, 13, and 15, stated that GE would recategorize assets from “available for sale,” meaning the assets were being held for the short-term and needed to be marked to market regularly, to “held to maturity,” which did not. (Id., ¶¶ 86-94.) This shifting of assets was in violation of Generally Accepted Accounting Principles (“GAAP”). (Id.) Because the assets were not regularly marked to market as they should have been, GE was listing them at higher values than they should have been listed, overstating the value of its assets in the process. Furthermore, before recategorizing assets as held-to-maturity, GAAP required that GE mark the assets to market. GE allegedly did not comply with this requirement. Plaintiff also alleges that GE had insufficient loan loss reserves and . that the amounts GE was holding in reserve were incorporated into the Offering Materials. Whereas the average reserve among what plaintiff characterizes as “comparable companies” was 2.36% of outstanding loans, GE Capital’s reserves were only 1.43%. (Id., ¶ 105.) Plaintiff alleges that these loan loss reserves were insufficient because GE Capital had a number of risky loans on its books. (Id., ¶ 109.) Plaintiff claims that GE likewise failed to disclose crucial financial information in its Offering Materials. For example, GE did not disclose the high percentage of loans that were of poor quality. (Id., ¶ 95.) On March 19, 2009, GE disclosed that 42% of GE Capital’s $183 billion of consumer loans were to sub-prime borrowers and that a high percentage of its corporate debt was non-investment grade or “junk” status. (Id., ¶¶ 95-99.) Also, several of plaintiffs confidential witnesses detail that business at GE Capital was “drying up” during this period, and GE did not disclose this information to the public. (Id., ¶¶ 112-13.) Given these financial difficulties, GE should have, but did not disclose that it was in imminent danger of a ratings downgrade and was going to have difficulty paying out its quarterly dividends for the year 2009. (Id., ¶¶ 114-15.) Plaintiff also alleges that GE concealed its true reasons for making an offering by stating the offering “enhances our flexibility and allows us to execute on our liquidity plan even faster. Second, it gives us the opportunity to play offense in this market should conditions allow.” (Id., ¶ 116; see also id. ¶ 121.) Plaintiff alleges that this statement was misleading because GE was making the offering to shore up its financial viability. GE made several statements regarding its AAA rating that plaintiff alleges are materially misleading. Most of these statements fell into two categories. In one group of statements, GE described its “commitment to its AAA rating.” (Id., ¶¶ 117, 124.) In the other, GE described its AAA rating as a marker of quality. (See id. ¶ 128 (“We run the company for the long term and are taking the actions expected from a Triple-A-rated company.”); id., ¶ 136 (“GE, GECS and GE Capital have distinct business characteristics that the major debt rating agencies evaluate both quantitatively and qualitatively.”)). Finally, GE indicated in its Offering Documents that “Moody’s Investor Services commented that our revised operational and financial strategies for GE Capital ‘are supportive of our and GE Capital’s ‘AAA’ long-term and ‘Prime-1’ short-term ratings with a stable outlook.” (Id., ¶ 120.) GE attempted to reassure investors about its access to the commercial paper markets in its Offering Materials. It stated in its preliminary prospectus of October 1, 2008 that “GE Capital has continued to issue commercial paper.” (Id., ¶ 117a.) It stated in a September 25, 2008 Form 8-K that “demand remains strong” for GE Capital’s commercial paper. (Id., ¶ 125.) And it stated in FY 2005, 2006, and 2007 Form 10-K’s and in its FY 2004 Form 10-K/A (which were incorporated by reference into the Offering Materials) that “[a] large portion of GE Capital’s borrowings ... was issued in active commercial paper markets that we believe will continue to be a reliable source of short-term financing.” (Id., ¶ 138a (ellipsis in complaint).) GE indicated to investors that it was planning on issuing a dividend of $1.24 per share for the course of 2009. (Id., ¶ 126 (“Board approves plan to maintain $.31 per share quarterly dividend, totally $1.24 per share annually, through 2009.”).) GE further stated that “[biased on past performance and current expectations, in combination with the financial flexibility that comes with a strong balance sheet and the highest credit ratings, we believe that we are in a sound position to grow dividends.... ” (Id., ¶ 135.) Plaintiff alleges these statements were false. Plaintiff also takes issue with a GE’s characterization of its economic health. GE claimed in its 10-Q for the second quarter of 2008 that GE Capital’s “investment securities comprise mainly investment-grade debt securities.” (Id., ¶ 130; see also id., ¶ 137.) GE also stated it had “performed well during the recent market volatility” and would “continue to run GE Capital to be safe and secure, while earning high margins on conservatively underwritten business.” (Id., ¶ 127.) In 2007, GE described itself as having “disciplined risk management” and “continued strong credit quality.” (Id., ¶ 133.) Plaintiff argues that all of these statements and omissions constituted material misstatements. Alleged Exchange Act Violations Plaintiff alleges that GE continued to make much the same types of misstatements throughout the Class Period, which runs from September 25, 2008, until March 19, 2008. During this time period, plaintiff alleges that GE made misleading-statements or omissions regarding the following: its ability to fund itself through commercial paper, the status of its AAA rating, the quality of its loan portfolio, its ability to maintain its dividend, and the projected profits for GE Capital in 2009. Plaintiff also alleges that GE violated GAAP by improperly re-characterizing its assets from short-term to long-term and by maintaining inadequate loan loss reserves. A. Commercial Paper The Class Period begins several weeks after Immelt’s alleged conversations with Paulson regarding GE’s difficulties in obtaining commercial paper. Plaintiff alleges that GE’s difficulties continued at least through the beginning of the Class Period, relying upon the statement of CW 6, who reports that commercial paper markets were “frozen” as of September 25, 2008. (Id., ¶ 138(b).) Publicly, GE stated that it was not having difficulty issuing commercial paper. These allegedly false statements began on the first day of the Class Period, September 25, 2008. During a conference call to discuss GE’s Q3 2008 earnings release, Immelt stated, We have great CP [Commercial Paper] programs. We go direct to investors, so we’re not going through brokers. We run the program in 11 currencies. About two-thirds of the CP business is in the U.S., the rest is global; it’s spread across many countries. We have no issues funding ourselves. Even in the last 10 days where you’ve had some significant disruptive days, we continue to see a flight in quality. (Id., ¶ 171a.) Similarly, Sherin stated, “We’ve got a commercial paper program that’s broad and deep.... And if you look at our 61-day maturities, you really don’t have any near term pressure of any magnitude.” (Id., ¶ 171b). Soon thereafter, on October 8, 2008, Immelt appeared on Jim Cramer’s CNBC television program to discuss commercial paper. (Id., ¶ 183a.) According to plaintiff, “Immelt touted GE’s AAA credit rating as putting GE ‘first in line’ as a borrower.” (Id.) The same day, GE issued a Form 8-K updating a prior filing and stating that GE Capital relied upon “active unsecured commercial paper markets that we believe will continue to be a reliable source of short-term financing.” (Id., ¶ 183b.) Two days later, on October 10, 2008, GE hosted a conference call to discuss the Company’s Q3 2008 earnings. Immelt informed investors, “We’ve had no problems with our own CP.... ” (Id., ¶ 187a.) Sherin stated, “[W]e’ve got a great broad CP market. We haven’t had any trouble funding ourselves.... We continue to fund ourselves at very low rates without any issues.... ” (Id., ¶ 193e.) He also went on to downplay GE’s reasons for participating in government-backed commercial paper programs: “We don’t plan on using any of those, but if we were to do it in order I would say that the Fed facility is a great liquidity facility for our customers.” (Id.) Immelt added that, “even with all of this volatility, we have never had issues in the CP market rolling our paper.” (Id., ¶ 193d.) On October 20, 2008, the CPFF began taking applications to use its facility. On October 24, 2008, GE, through spokesman Russell Wilkerson, stated that it would “test” using the facility as an expression of support for the Fed’s program. (Id., ¶ 196a.) GE made similar statements in a October 24, 2008 Web-based publication. It stated, ‘We believe having access to the CPFF and demonstrating that it works well will encourage investors to buy more term commercial paper.” (Id., ¶ 196c.) The publications went on to disclose: Despite difficult conditions in the commercial paper market during the last five weeks, we have met our CP funding needs every day, including issuing term paper, and our pricing has been very close to historical spreads. However, investors who are concerned about their own ability to access liquidity have shortened their investment horizon and that has resulted in our weighted average maturity shortening. We believe the CPFF ... facility] will provide investors with confidence to purchase more longer-term CP again. (Id., ¶ 196e.) Later, on October 27, 2008, GE made a similar statement, saying, “We plan to use the facility primarily to support our commercial paper investors who need liquidity and to manage our maturity profile.” (Id., ¶ 198a.) Plaintiff alleges that these statements were misleading because they failed to disclose that using the CPFF was, in fact, a necessity for GE to continue to sell its commercial paper. (Id., ¶ 196g.) B. AAA Rating At the beginning of the Class Period, GE had the distinction of being one of the few AAA-rated industrial companies in the United States. GE regularly reminded investors of this fact in its press briefings. GE repeatedly spoke of its “commitment to its Triple-A credit rating.” (Id., ¶¶ 167, 168, 205, 234; see also id., ¶¶ 175, 178, 183a.) It told investors that its AAA rating gave it a competitive advantage over other companies because, for example, the AAA rating lowered GE’s borrowing costs. (Id., ¶¶ 170, 175, 223.) It also made repeated statements to investors along the lines of how it “ran GE to be a AAA company.” (Id., ¶¶ 168, 175, 191, 193, 205, 227, 232, 240, 245, 249.) At several points, GE was asked to comment on the likelihood that it would be able to maintain its AAA rating as the economic crisis wore on. On December 16, 2008, during GE’s annual outlook meeting, Immelt responded to one such question by saying, “I frequently get the question, what do you favor more the AAA or the dividend? I always give the answer both. I always say the way we allocate capital is to make sure we’ve got plenty of capital to do both.” (Id., ¶ 226.) Similarly, on January 23, 2009, Immelt appeared on CNBC and answered another question regarding GE’s ability to maintain both its rating and its dividend. (Id., ¶ 248.) He responded, “I hate the fact that there’s so much speculation around the dividend and AAA. I wish my words could end the speculation. The facts of what we’ve done here, I think, should let investors know we’ve got the cash, and we’ve got the operating model that’s going to secure the dividend in this environment.” (Id., ¶ 248.) Plaintiff alleges that these and other statements touting GE’s AAA credit rating were false and misleading in light of the continuing deterioration of GE Capital’s business. (Id., ¶ 181.) In early 2009, signs began to surface that GE would not be able to maintain its AAA credit rating. During January of 2009, a UBS Investment Research report disclosed that both Moody’s and S & P had cited GE’s ability to meet its earnings guidance of $5 billion as being crucial to its being able to maintain its AAA rating. (Id., ¶ 292.) On January 27, 2009, GE informed the public in a press release that Moody’s had stated that it had placed GE and GE Capital’s long-term AAA ratings on review for possible downgrade. (Id., ¶ 253.) It reassured investors, “Our objective is to maintain our Triple-A rating but we do not anticipate any major operational impacts should that change.” (Id.) On February 5, 2009, Immelt told Bloomburg that “GE had the earnings power and cash to justify the payout [of its dividend] and its highest-possible AAA credit ratings, now under review.” (Id., ¶ 260.) On February 10, 2009, Sherin spoke at a Barclay’s conference and stated, “[W]e are running the Company like a AAA and we are going to continue to be conservative and focus on being safe and secure.... ” (Id., ¶ 269.) And on March 2, 2009, GE released a letter to shareholders signed by Immelt and dated February 6, 2009. Immelt stated, “[W]e will continue to run the Company with the disciplines of a ‘Triple A,’ including adequate capital, low leverage, solid earnings, and conservative funding.” (Id.) On March 12, 2009, GE issued a press release stating that S & P had downgraded its rating from AAA to AA+. (Id., ¶ 293.) C. Statements about the Quality of GE Capital’s Portfolio At the beginning of the Class Period, GE Capital accounted for a significant portion of GE’s business. The economic crisis hit financial institutions especially hard, and GE made numerous statements regarding GE Capital’s financial health and more specifically about the quality of GE’s investments. On September 25, 2008, GE released its Q3 2008 earnings. That same day, Immelt stated in a press release: “While the financial services markets remain challenging and require us to adapt quickly to the rapidly changing environment, we will continue to run GE Capital to be safe and secure, while earning high margins on conservatively underwritten business.” (Id., ¶ 168.) GE also hosted a conference call that day. On the call, Immelt stated, Our GE Capital and Financial Service business model remains strong. We’ve got great cost base. We’re a senior secured and diversified lender. We’re match funded. We’ve never been a trader or market maker.... We expect to see higher losses in loss provisions and lower gains as the economy evolves. (Id., ¶ 169.) Sherin stated during the same conference call that its AAA rating gave it an advantage in the lending market, specifically, “[Y]ou can enter into investments at low risk levels, low loan-to-values, and senior secured positions at high returns.” (Id., ¶ 170.) Sherin made more specific statements during the same conference call regarding the quality of GE Capital’s portfolio. He stated, “We’ve got a great portfolio; our measurements and delinquencies and asset quality are all strong.” (Id., ¶ 171.) He further stated, “We have a fantastic real estate portfolio. It’s very high quality. The delinquencies on the book are .27% of assets, so it’s performing very well.” (Id., ¶ 172.) On October 10, 2008, GE issued a further Q3 earnings release. In that release, Immelt stated, “We have taken a number of steps to protect investors from the downside risk in financial services.... The Company is well positioned to perform in a very difficult environment, and our Board has approved a plan to sustain the GE dividend through 2009.” (Id., ¶ 184.) GE also hosted a conference call that same day. During the conference call, Sherin described GE Capital’s real estate business as “strong” and “driven by the investments we’ve been making in senior secured debt at high returns.” (Id., ¶ 186.) He also stated that GE Capital’s portfolio “remains robust,” continuing, “We’ve got a great portfolio. We’ve stuck to our risk management, but we are going to see a credit cycle here. We’re going to see higher delinquencies, we’re already seeing those. As we have higher delinquencies we’re going to put up more loss provisions.” (Id., ¶ 187.) On December 2, 2008, GE issued a press release to announce an “updated strategic framework” for GE. Sherin stated in the press release: We are operating in an extremely difficult environment, but we are outperforming our peers and we have strong franchises to build upon for long-term growth. We are a mid-market finance company differentiated by an originate-to-hold approach, product and geographic diversification, deep experience in risk assessment and collateral management, and senior secured positions for many of our receivables. (Id., ¶ 205.) The same day, GE held a financial services investor meeting. During the meeting, Cary, GE Capital’s Chief Operating Officer, stated, “Lastly, while we think we’ve planned pradently, we have a funding hedge of about $10 billion in our back pocket to manage any disruptions we might see in the marketplace. We feel pretty good about our plans around both collections and our forecast for new volume.” (Id., ¶ 213.) During the same meeting, Immelt stated, “I just want to do a deep dive on real estate debt portfolio. The left-hand side of the chart basically talks about the way we’ve structured the debt, low loan to value, high structured debt financing, well underwritten, great spread of risk. Through these cycles, we never lost any of our risk disciplines, any of our underwriting disciplines.” (Id., ¶ 224.) On December 16, 2008, GE issued a press release in which Immelt stated, “Our financial services business, while slowed by the current financial crisis, are strong, global, middle market franchises with a conservative originate-to-hold model backed by senior secured collateral.” (Id., ¶ 229.) According to plaintiff, the foregoing and related “rosy assessments” masked the fact that “GE Capital was in dire financial straits in terms of not generating “new business and revenues” and was “significantly exposed to substantial losses related to risky assets in its loan portfolio....”” (Id., ¶¶ 180,181,196.) Negative information began to emerge regarding the quality of GE Capital’s portfolio as the Class Period came to a close. On March 5, 2009, Sherin appeared on CNBC’s television program, “Squawk Box,” and allegedly admitted that the fair value of 98% of GE Capital’s assets was unknown to investors. (Id., ¶ 287.) On March 19, 2009, GE held a six-hour long investment meeting to discuss the financial condition of GE Capital. (Id., ¶ 294.) The company disclosed that 42% of GE Capital’s consumer loans were made to sub-prime borrowers, including 74% of GE Capital’s U.K. mortgages, the largest portion of GE Capital’s loan portfolio. (Id., ¶ 299.) In addition, with respect to GE Capital’s $230 billion commercial lending and leasing portfolio, in plaintiff’s words, (a) 81% of the $55 billion in GE Capital equipment loans in the Americas were made to borrowers with non-investment grade, or “junk” credit ratings. 40% of all of GE Capital’s equipment loans were made to borrowers rated B + or lower; (b) 93% of the $38 billion in GE Capital’s leveraged loans were made to borrowers with non-investment grade, or “junk” credit ratings. 76% leveraged loans were made to borrowers that were rated below B +, and 28% of these loans were made to borrowers with credit ratings below B-; (c) 95% of GE Capital’s $13 billion franchise finance portfolio involves loans made to non-investment grade or “junk” status borrowers, and 37% of borrowers were rated B + or below; (d) 85% of GE Capital’s $13 billion global aircraft portfolio (lending in connection with corporate jets) involves credit extended to customers with “junk” credit ratings. A shocking 72% of these customers have credit ratings below BB-; (e) 89% of GE Capital’s $18 billion in equipment loans in the European Union were made to borrowers with noninvestment grade, or “junk” credit ratings. 38% of all of these loans were made to borrowers rated B + and below; (f) 81% of GE Capital’s $20 billion in equipment loans made in the Asia Pacific region were made to borrowers with non-investment grade, or “junk” credit ratings. 22% of all of these loans were made to borrowers rated B + and below; and (g) 95% of GE Capital’s $10 billion in asset-based lending in the United States was made to borrowers with non-investment grade, or “junk” credit ratings. 86% of these loans were made to borrowers that were rated B + and below, and 42% of these loans were made to borrowers with credit ratings of B- or below. (Id., ¶ 301.) Together, these asset categories totaled $167 billion of GE Capital’s $230 billion commercial lending and leasing portfolio. GE’s share price opened at $10.32 on March 19, 2009. (Id., IT 308.) On March 20, 2009, the stock closed at $9.54 per share, a 7.6% drop. (Id.) D. Dividend During the Class Period, GE made various statements promoting its planned $1.24 dividend ($.31 per quarter) for the year 2009. The majority of these statements boil down to GE’s off-stated intention to maintain its dividend at this rate through 2009. (See, e.g., id. ¶ 169 (“Lastly, the GE dividend is secure for investors. The Board has approved management’s plan to maintain the current dividend through '09 even in these relatively uncertain economic times at $1.24 a share.”); see also id. ¶¶ 174, 197, 201, 207, 208, 214, 228, 232, 234, 240, 275.) The dividend was also described as “safe” (e.g., id., ¶ 190) and “protected” (e.g., id., ¶ 192). In addition, GE through its officers made several more specific statements. On December 16, 2008, Immelt proclaimed, “What can you count on? You can count on a great dividend, $1.24 board approved at the board meeting last Friday, $1.24 in 2009, $.31 a share in the first quarter.” (Id., ¶ 220.) He also stated, “We’re running the company really focused on cash. And so we have about a $3 billion coverage on the dividend.... And so the company really operationally is very well grounded to cover the dividend handily and to be in good shape as we think about next year.” (Id., ¶ 221.) He further stated, “I frequently get the question, what do you favor more the AAA or the dividend? I always give the answer both. I always say the way we allocate capital is to make sure we’ve got plenty of capital to do both.” (Id., ¶ 226.) On January 23, 2009, during a conference call to discuss the Q4 2008 and FY 2008 results, Immelt stated, “[W]e think given the strong operating performance of the company and the framework and the strong capital position that we still believe that supporting the dividend and doing it without straining, doing it just by controlling our own destiny and executing with excellence that is the best use of capital and capital allocation.” (Id., ¶ 245.) During a CNBC interview the same day, Immelt stated, “I hate the fact that there’s so much speculation around the dividend and the AAA. I wish my words could end the speculation. The facts of what we’ve done here, I think, should let investors know that we’ve got the cash, and we’ve got the operating model that’s going to secure the dividend in this environment.” (Id., ¶ 248; see also id., ¶ 249.) Plaintiff alleges that Immelt’s repeated assurance that the $0.31 quarterly dividend would continue were false and misleading as defendants knew that G.E. Capital was in financial distress and could not be a source to fund the dividend. On February 6, 2009, GE announced that it would pay $.31 per share for the second quarter of 2009. But Immelt scaled back his rhetoric regarding the dividend, saying merely, “The Board and I believe it is in the best interests of the Company’s shareholders to continue to pay an attractive dividend.” (Id., ¶ 257.) On February 27, 2009, GE reversed field announcing that it was cutting its quarterly dividend for the second half of 2009 to $.10 per share. (Id., ¶ 279.) When GE announced that it was cutting its dividend, its share price fell from $9.10 on February 26, 2009 to $8.51 on February 27, 2009, a loss of $.59 per share or 6.5%. (Id., ¶ 281.) GE’s- share price fell further the next trading day to $7.60 per share on March 2, 2009, a loss of $.91 per share, or about 10.7%. (Id.) Trading volume on both days was extremely high. (Id.) E. GE Capital’s 2009 Earnings Toward the end of 2008, GE began to predict what GE.Capital’s earnings would be for 2009. On December 2, 2008, Neal stated in a press release, “We have established a framework for GE Capital to earn approximately $5 billion in 2009. From there, we believe the business is positioned to sustain solid, 10% earnings growth in the future.” (Id., ¶206.) Immelt stated during the December 16, 2008 Annual Outlook Meeting also predicted that GE Capital would earn $5 billion in 2009 (id., ¶ 221), and he repeated this prediction during a press release issued the same day (id., ¶ 229). On January 23, 2009, Immelt again stated that GE Capital would earn $5 billion in a press release (id., ¶ 233), and he made the same prediction during an interview on CNBC (id., ¶ 247). On February 10, 2009, Sherin appeared on behalf of GE at a Barclay’s conference and again predicted that GE Capital would earn $5 billion in 2009. (Id., ¶¶ 266, 270.) Approximately one month later, on March 19, 2009, GE cut its profit estimate from $5 billion for GE Capital to approximately $2 to $2.5 billion. (Id., ¶ 295.) Plaintiff attacks these public statements as falsé and misleading in light of the reports of its confidential witnesses (“CW’). CW 8 is a former GE Capital Vice President of Risk Underwriting who worked in the Energy Financial Services group. (Id., ¶ 73.) CW 8 reports that Energy Financial Services “had record profits” until September 2008, when business “more or less halted.” (Id.) CW 9, a former Senior Vice President for Operations in the Commercial Lending group, reported that deal volume “fell off a cliff’ at GE Capital in early-to-mid 2008. CW 11, a former Assistant Vice President in Commercial Finance in the Media, Communications, and Entertainment division, reported that following the collapse of Bear Sterns in spring of 2008, “literally overnight we did not have new business. It was like a domino and things did not get better.” (Id.) CW 12, a former Senior Underwriter in the North American Equity Division at GE Real Estate, states that starting in September 2008, “transactions [at GE] were at, a halt, and deals weren’t getting done. Nobody was willing to buy and banks weren’t lending.” (Id.) CW 14 held various administrative positions in GE Capital. (Id.) CW 14 heard discussions beginning in the fall of 2008 to the effect that GE Capital had stopped making new deals. (Id.) Plaintiff contends that given this fall off in business at GE Capital, it was unrealistic to project $5 billion in profits for 2009. Plaintiff also notes that a January 2009 UBS Investment Research note reported that both Moody’s and S & P had cited GE Capital’s earnings guidance as crucial to GE in maintaining its AAA rating and suggests that GE Capital was overstating its projected earnings in an effort to stave off a downgrade. (Id., ¶ 292.) F. Inadequate Loan Loss Reserves Plaintiff claims that during a period of extreme economic turmoil, GE did not adequately provide for loan loss reserves. In support of this claim, plaintiff alleges that beginning in the first quarter of 2008, GE’s delinquencies as a percentage of total receivables steadily began to rise.' GE defined delinquent debts as those that were 30 days or more past due. (Id., ¶ 326.) Between 2005 and 2007, consumer delinquencies were consistently 5-5.5% of total consumer receivables. (Id., ¶ 327.) By the first quarter of 2009, this number had jumped to 8.2%. (Id.) Similarly, on the commercial side, delinquencies ranged between 1.22-1.35% of total assets between 2005 and 2007. (Id.) This number steadily increased beginning in 2008, reaching 2.84% for the first quarter of 2009. (Id.) The percentage of nonearning receivables, debts that are “90 days are more past due (or for which collection has otherwise become doubtful)” (Id., ¶ 326), also steadily increased. Over the same period, non-earning receivables as a percentage of total receivables rose from being steadily in the 1.4-1.5% range to 3.58% of financing receivables. (Id., ¶¶ 333-34.) Loan loss reserves as k percentage of total financing receivables declined between 2005 and 2007 from 1.574% to 0.980%. (Id., ¶ 340.) This figure jumped during the fourth quarter of 2008 to 1.403% and rose to 1.805% for the second quarter of 2009. (Id:, ¶ 341.) Plaintiff alleges, however, that these increases were insufficient because GE still had considerable shortfalls between its loan loss reserves and its nonearning receivables. For example, in the first quarter of 2009, GE had a shortfall of $4.39 billion between its nonearning receivables and its loan loss reserves. G. Reclassification of Assets Two of plaintiffs confidential witnesses, CW 13 and CW 15, report that GE shifted the way that it accounted for certain nonperforming loans in order to avoid writing them down. CW 13 worked as a Senior Underwriter and Asset Manager for commercial mortgage-backed securities within the Real Estate Group at GE Capital from October 2005 through September 2008. (Id., ¶ 73.) CW 13 “stated that GE Capital did not write down bad real estate deals, but would ‘take the asset and shift it to an investment to hold’ to avoid taking a write-down. Confidential Witness 13 described this process as being used so that the Company could ‘hide assets until the market turned around’ by making a ‘switch on the balance shift’ — shifting deals to the long term in the hope that the value would increase, and by doing so, avoid losses to the company.” (Id.) During the Class Period, CW 15 worked as a Regional Commercial Real Estate Manager at GE Commercial Finance within GE Capital. According to CW 15, “[b]e-ginning in mid-2007 and continuing into 2008, in circumstances when GE would learn that its equity stake and/or periodic payments were at risk, GE would ‘shift its equity position to long term on the balance sheet’ if it could not sell its stake or otherwise refinance it to avoid writing the asset down to fair value and taking a loss.” (Id.) CW 15 states that a committee of senior GE managers made the final decisions on all -loan transactions, including moving equity investments to long term on the balance sheet. (Id.) According to CW 15, Immelt himself was involved in decision making for larger transactions. (Id.) Plaintiff alleges that these actions violated Statements of Financial Accounting Standards (“SFAS”) 65 and 115, which govern how companies account for changes in the fair market value of loans. H. Internal Reporting at GE Plaintiffs confidential witnesses describe internal reporting within GE that kept GE Corporate in the loop. CW 1, who held various accounting positions within GE Capital in Commercial Finance, described a template whereby GE departments would “report their financial results to Corporate, including financial results and supporting schedules, information on bad debts, loan reserves, and write-downs.” (Id., ¶ 401.) CW 1 states that management at GE Corporate would regularly review this information and ask follow-up questions. (Id.) CW 1 also stated that GE Corporate got involved in certain types of decisions, such as the accounting treatment of assets that needed to be written down and larger financial decisions. (Id.) CW 4, a senior Vice President at GE Capital who left in 2008, states that “underwriting results, loan impairments, and opinions about loan loss reserves” were reported “up the chain” to GE Corporate. (Id., ¶ 404.) CW 14, who held various administrative positions within GE Capital, including providing “backup support” to the CEO of GE Capital, also states that quarterly reports and accompanying PowerPoint presentations were prepared by Finance personnel at GE Capital and “reported up to senior management at GE Corporate each quarter during the Class Period.” (Id., ¶ 402.) STANDARD OF REVIEW In evaluating a motion to dismiss pursuant to Rule 12(b)(6), a court accepts the truth of the facts alleged in the complaint and draws all reasonable inferences in the plaintiffs favor. Global Network Commc’ns, Inc. v. City of N.Y., 458 F.3d 150, 154 (2d Cir.2006). A complaint should be dismissed if it fails to set forth “enough facts to state a claim for relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). A complaint alleging securities fraud pursuant to Section 10(b) of the Securities Exchange Act is subject to two heightened pleading standards. First, the complaint must satisfy Rule 9(b), which requires that it “state with particularity the circumstances constituting fraud.” Fed.R.Civ.P. 9(b); see ATSI Commc’ns, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 99 (2d Cir.2007). Second, the complaint must meet the pleading requirements of the Private Securities Litigation Reform Act (“PSLRA”), 15 U.S.C. § 78u-4(b), which “insists that securities fraud complaints ‘specify’ each misleading statement; that they set forth the facts ‘on which [a] belief that a statement is misleading was ‘formed’; and that they ‘state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.’ ” Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 346, 125 S.Ct. 1627, 161 L.Ed.2d 577 (2005) (quoting 15 U.S.C. §§ 78u-4(b)(1), (2)). DISCUSSION I. Securities Exchange Act of 1934 Section 10(b) of the Securities Exchange Act of 1934 makes it illegal “[t]o use or employ, in connection with the purchase or sale of any security ... any manipulative or deceptive device or contrivance....” 15 U.S.C. § 78j(b). Rule 10b-5, promulgated thereunder, makes it unlawful for “any person, directly or indirectly, ... [t]o make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.” 17 C.F.R. § 240.10b-5. In order to state a claim for relief under § 10(b) and Rule 10b-5, plaintiff “must plead six elements: (1) a material misrepresentation or omission; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance; (5) economic loss; and (6) loss causation.” Heller v. Goldin Restructuring Fund, L.P., 590 F.Supp.2d 603, 613 (S.D.N.Y.2008). Defendants argue that plaintiff has failed to satisfy material falsity, scienter, and loss causation. The Court shall discuss each of these elements in turn. A. Material Misrepresentations or Omissions A plaintiff may bring a claim pursuant to Section 10(b) and Rule 10b-5 based on either affirmative misstatements or omissions of material fact. “A securities fraud complaint based on misstatements must (1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent.” ATSI Commc’ns, 493 F.3d at 99 (citing Novak v. Kasaks, 216 F.3d 300, 306 (2d Cir.2000)). A securities fraud complaint based on omissions must allege that “ ‘the corporation is subject to a duty to disclose the omitted facts.’ ” In re Optionable Sec. Litig., 577 F.Supp.2d 681, 692 (S.D.N.Y.2008) (quoting In re Time Warner Inc. Sec. Litig., 9 F.3d 259, 267 (2d Cir.1993)). A corporation is “‘not required to disclose a fact merely because a reasonable investor would very much like to know that fact.’ ” Id. (quoting In re Time Warner, 9 F.3d at 267). Nevertheless, a “duty to disclose ‘arises when disclosure is necessary to make prior statements not misleading.’ ” Beleson v. Schwartz, 599 F.Supp.2d 519, 525 (S.D.N.Y.2009) (quoting In re Time Warner, 9 F.3d at 268). In addition, the alleged misstatement or omission must have been material. “At the pleading stage, a plaintiff satisfies the materiality requirement of Rule 10b-5 by alleging a statement or omission that a reasonable investor would have considered significant in making investment decisions.” Ganino v. Citizens Utils. Co., 228 F.3d 154, 161 (2d Cir.2000). “Because materiality is a mixed question of law and fact, in the context of a Rule 12(b)(6) motion, a complaint may not properly be dismissed ... on the ground that the alleged misstatements or omissions are not material unless they are so obviously unimportant to a reasonable investor that reasonable minds could not differ on the question of their importance.” ECA & Local 134 IBEW Joint Pension Trust of Chi. v. JP Morgan Chase Co., 553 F.3d 187, 197 (2d Cir.2009) (hereinafter “ECA”) (alteration in original) (internal quotation marks omitted). Certain types of statements are generally not materially misleading. “Puffery” is one such type. Puffery is an optimistic statement that is so vague, broad, and non-specific that a reasonable investor would not rely on it, thereby rendering it immaterial as a matter of law. See id. at 206. However, the mere fact that a statement uses conclusory, indefinite, and unverifiable terms, rather than expressing a reason in dollars and cents, does not compel a conclusion that it is immaterial as a matter of law. Va. Bankshares, Inc. v. Sandberg, 501 U.S. 1083, 1093-94, 111 S.Ct. 2749, 115 L.Ed.2d 929 (1991) (holding that statement that merger would give shareholders “high value for their shares” could be deemed material, and noting that “such conclusory terms in a commercial context are reasonably understood to rest on a factual basis that justifies them as accurate, the absence of which renders them misleading”); Novak, 216 F.3d at 315 (statements that inventory situation was “in good shape” or “under control” made while defendants “allegedly knew the contrary was true,” were actionable). In addition, the PSLRA creates a safe harbor which provides special protection for alleged misstatements that are “forward-looking” in nature. See 15 U.S.C. § 77z-2(c)(l)(B)(ii). The PSLRA defines forward-looking statements to include, inter alia, statements containing “a projection of revenues, income (including income loss), earnings (including earnings loss) per share, capital expenditures, dividends, capital structure, or other financial items;” statements of the “plans and objectives of management for future operations ... and statements of “future economic performance.” 15 U.S.C. § 78u-5(i)(l)(A)-(C). The safe harbor shields written forward-looking statements from liability if any one of the following criteria is met: (1) the statement was “identified as a forward-looking statement, and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement;” (2) the statement was immaterial; or (3) the statement, if made by a business entity, was not made or approved by an executive who had “actual knowledge” that the statement was false or misleading. 15 U.S.C. § 78u-5(c)(1); Slayton v. Am. Express Co., 604 F.3d 758, 765-66 (2d Cir.2010). However, the safe harbor, and the closely related “bespeaks caution” doctrine, do not apply to statements of present or historical facts. See P. Stolz Family P’ship v. Daum, 355 F.3d 92, 96-97 (2d Cir.2004) (stating that the “bespeaks caution” doctrine does not protect misrepresentations of present or historical facts). Plaintiff alleges that GE made materially misleading statements regarding its ability to issue commercial paper, maintain its AAA rating, and maintain its dividend, and regarding GE Capital’s ability to earn $5 billion in 2009. Plaintiff also alleges that GE violated GAAP by recategorizing its assets to avoid marking them to market and by maintaining insufficient loan loss reserves. The Court will address each category of allegations in turn. 1. Commercial Paper Plaintiff alleges that during the fall of 2008, GE was experiencing difficulty issuing its commercial paper, while telling the public the opposite. In support of this allegation, plaintiff contrasts the private conversations between Paulson and Immelt on September 8 and September 14 with the company’s contemporaneous public statements that it was having no difficulty funding itself and had never had such difficulties. In Immelt’s conversations with Paulson, he reportedly disclosed that GE was having difficulty issuing commercial paper for terms longer than overnight. The allegation of CW6, that the commercial paper markets were “frozen” as of September 25, 2008, also supports this claim. Defendants argue that plaintiffs complaint is deficient because these allegations do not support an inference either that GE actually failed to meet its funding needs or that any difficulties that GE faced continued into the Class Period. Defendants suggest that in alleging that GE was having difficulty funding itself because it was issuing commercial paper on overnight terms, plaintiff is “making several illogical and unsupported leaps.... ” (GE Mem. 29.) GE is correct that the allegations in the complaint do not support a claim that GE was unable to roll its commercial paper on any terms. But what allegedly “stunned” the Secretary of the Treasury was Immelt’s report of the difficulty the Company was experiencing in funding, itself — GE was only able to borrow money overnight. If this information was of importance to Paulson (see GE Ex. 3 at 227-28), it was likely to be of interest to a reasonable investor. Yet at various times Immelt and Sherin issued several categorical denials that GE was having any difficulty whatsoever in funding itself. {E.g., SAC ¶¶ 171a, 187a, 193c.) Accordingly, the SAC adequately alleges that GE made material misrepresentations regarding its access to commercial paper markets. Defendants also argue that plaintiff has not demonstrated that any difficulties Immelt disclosed to Paulson in early to mid-September. continued into, the Class Period. (GE Mem. 29-32.) They argue that because of government intervention, the commercial paper markets stabilized significantly. (Id. 31.) But the data defendants rely upon in making this claim reveal only that more commercial paper was issued in late September; . defendants concede that the commercial paper being purchased on the private market had shorter maturities and higher interest rates. (Id. 32.) Furthermore, GE itself disclosed on October 24, 2008, that it was participating in the CPFF because it hoped to issue commercial paper with longer maturities. (SAC, ¶ 196e.) Defendants may show after discovery that GE was no longer experiencing difficulty by the time the Class Period began on September 25, 2008, and that its public statements were accurate. However, those issues are better addressed at the close of discovery. 2. Quality of the Loan Portfolio Plaintiff alleges that GE made material misrepresentations when it praised the quality of its loan portfolio and'made material omissions by failing to disclose its many subprime and non-investment grade holdings. “[U]pon choosing to speak, one must speak truthfully about material issues” and has “a duty to be both truthful and accurate.” Caiola v. Citibank, N.A., 295 F.3d 312, 331 (2d Cir.2002). It should be noted, of course, that this obligation does not constitute a free-standing duty to disclose any and all related material whenever a company speaks on a given topic, but rather “ ‘a duty to disclose only when silence would make other statements misleading or false.’ ” In re Bristol Myers Squibb Co. Sec. Litig., 586 F.Supp.2d 148, 160 (S.D.N.Y.2008) (quoting Glazer v. Formica Corp., 964 F.2d 149, 157 (2d Cir.1992)). In many parts of the complaint, plaintiff appears to allege that merely by disclosing factual information about some aspects of GE Capital’s assets and general financial health, it was also obligated to reveal that many of GE Capital’s borrowers were risky. In so arguing, plaintiff often fails to identify specific statements that are rendered false or misleading by GE’s omission. For example, plaintiff alleges that Immelt stated, “We are a senior secured and diversified lender.” (Id., ¶ 169.) Plaintiff does not dispute the truth of the statement itself, nor does it explain why the statement is made false by GE’s alleged omission. Plaintiff seems to suggest that in making this and other similar statements, Immelt was also obligated to disclose that GE had made loans to uncreditworthy borrowers. But the fact that GE extended credit to subprime and junk borrowers does not render the fact that GE was a senior secured lender misleading. A corporation is “not required to disclose a fact merely because a reasonable investor would very much like to know that fact.” In re Optionable Sec. Litig., 577 F.Supp.2d at 692 (internal quotation marks omitted). Although this criticism applies to many of the statements plaintiff alleges to be misleading, it does not apply to all. Plaintiff has identified several statements that' do implicate the quality of loan portfolio, including Sherin’s various descriptions of GE’s loan portfolio as “fantastic,” “great,” “robust,” “strong,” and “really high quality.” (Id., ¶¶ 171,172,186,187.) Similarly, Immelt informed investors that “[tjhrough these cycles, we never lost any of our risk disciplines, any of our underwriting disciplines.” (Id., ¶ 224.) Courts confronted with similar statements have scrutinized the surrounding context to determine what companies intended to convey to investors. Hill v. State St. Corp., 09 Civ. 12146, 2011 WL 3420439, at *16-*18 (D.Mass. Aug. 3, 2011) (determining that when State Street praised certain investments as “high quality” it could plausibly be read as a (misleading) representation as to “the relative safety of investing in State Street stock”); Yu v. State St. Corp., 686 F.Supp.2d 369, 375-76 (S.D.N.Y.2010) (determining based on the statements’ context that when State Street described certain assets as “high quality,” it intended to convey that they had a high credit rating, not that they would suffer no losses). In context, Sherin’s use of descriptors such as “very high quality” are more akin to those used in Hill than those at issue in Yu. In March 2009, GE released detailed information revealing that 42% of GE Capital’s $183 billion in consumer loans were made to non-prime borrowers, and at least $145 billion of its $230 billion commercial lending and leasing portfolio consisted of loans to non-investment grade companies. Plaintiff plausibly alleges that these disclosures suggest that GE’s loan portfolio was not as high quality as billed. Cf. Hill, 2011 WL 3420439, at *22 (“Had the investors known more details about the [mortgaged-backed securities] in the portfolios ..., they may have been able to consider the meaning of ‘high quality’ with a more discerning ear.”). GE argues that it had no independent duty to “break out” details concerning its subprime exposure. As an abstract proposition that may be so. But once a company chooses to speak — as GE insistently did with respect to the “high quality” of GE Capital’s portfolio — “it has a duty to disclose any additional material fact ‘necessary to make the statements [already contained therein] not misleading.’ ” In re CitiGroup Inc. Bond Litig., 723 F.Supp.2d 568, 590 (S.D.N.Y.2010) (brackets in original) (quoting 15 U.S.C. § 78k). If, as plaintiff alleges, defendant’s qualitative statements as to the strength of GE Capital’s portfolio were misleading, then they are actionable under the securities laws. See Novak, 216 F.3d at 315 (holding that a qualitative statement that inventory was “in good shape” while defendants knew the contrary was actionable); Shapiro v. UJB Fin. Corp., 964 F.2d 272, 282 (3rd Cir.1992) (“[W]here a defendant affirmatively characterizes management practices as ‘adequate, conservative,’ ... and the like, the subject is ‘in play.’ ”); see also Va. Bankshares, 501 U.S. at 1093, 111 S.Ct. 2749 (“It is no answer to argue, as [defendants] do, that the ... statements on which liability was predicated ... focused ... on the indefinite and unverifiable term ‘high’ value.... The objection ignores the fact that such conclusory terms in a commercial context are reasonably understood to rest on a factual basis that justifies them as accurate, the absence of which renders them misleading .... "). 3. The 2009 Dividend Beginning in the second half of 2008, GE made repeated statements that its $1.24 dividend was “safe” and “secure” through 2009. The most categorical assurance was made by Immelt on December 16, 2008 when he stated: “What can you count on? You can count on a great dividend, $1.24 board approved at the board meeting last Friday, $1.24 in 2009, $0.31 a share in the first quarter.” (SAC ¶ 220.) Plaintiff claims this was an actionable misstatement; defendants claim that it was an inactionable prediction or opinion. Both rely almost exclusively on the Second Circuit’s opinion in In re IBM Corporate Securities Litigation, 163 F.3d 102 (1998), to support their positions. Indeed, there is something for everyone in the IBM opinion. Defendants are correct that the court therein dismissed the shareholders’ claim that IBM’s statement that it had no plan to cut its dividend was not misleading as they were merely “expressions of optimism or projections about the future.” Id. at 107. There are important distinctions between IBM and the present case, however, that warrant the Court’s consideration. Procedurally, IBM was decided on summary judgment after plaintiffs had taken discovery regarding the disclosures at issue. Factually, the disclosures at issue here are not the sort of wishy-washy statements at issue in IBM. There, the company made mildly optimistic statements such as, “I will say again what I said before. I have no real plan, no desire, and I see no need to cut the dividend.” Id. This reference to the absence of a plan in IBM is a far cry from Immelt’s “What can you count on?” hard-sell to shareholders. This distinction is important, as the Second Circuit, while affirming summary j