Wade v. Wellpoint, Inc. (892 F. Supp. 2d 1102, 2012)

ORDER DENYING PLAINTIFF’S MOTION FOR LEAVE TO FILE A SECOND AMENDED COMPLAINT

SARAH EVANS BARKER, District Judge.

Before the Court is Plaintiffs Motion for Leave to File a Second Amended Complaint [Docket No. 100], filed on November 8, 2010. Plaintiffs motion comes in response to this court’s September 22, 2010 order [Docket No. 99] dismissing the First Amended Complaint (“FAC”) without prejudice. At that time, we found that the FAC fell short of the heightened pleading requirements applicable to securities fraud litigation, and we granted Plaintiff forty-five days within which to seek leave to amend the FAC to conform to our ruling. Wade v. Wellpoint, Inc., 740 F.Supp.2d 994, 1013 (S.D.Ind.2010) {‘Wade /”). Plaintiff has petitioned for such relief, but Defendants rejoin that Plaintiffs Proposed Second Amended Complaint (“PSAC”) fails to remedy the FAC’s deficiencies, rendering leave to amend futile. The instant motion is fully briefed, and the Court, being duly advised in the matter, now DENIES Plaintiffs motion.

Factual and Procedural Background

This lawsuit is a securities class action brought on behalf of investors in Well-Point, Inc. (“WellPoint” or “the Company”) against multiple defendants: the Company; its President, Chief Executive Officer (“CEO”), and Director, Angela F. Braly (“Braly”); its Executive Vice President and Chief Financial Officer, Wayne S. De-Veydt (“DeVeydt”); and its former CEO and Chairman of the Board of Directors, Larry C. Glasscock (“Glasscock”). Plaintiff, Dorothy Wade, alleges that Defendants violated provisions of the Securities Exchange Act of 1934 (“the Exchange Act”) by making several misrepresentations and omissions to Company investors between January 23, 2008 and March 10, 2008 (the “Original Class Period”), thereby artificially inflating the market price of WellPoint’s common stock and causing significant harm to investors. As a result of Defendants’ alleged malfeasance, Plaintiff asserts a claim for compensatory damages, including all reasonable fees and costs, in an amount to be proven at trial.

I. Plaintiffs Previous Allegations

WellPoint is a nationwide health care benefits company offering network-based managed care plans to employers, individuals, Medicaid, and senior markets. The Company is a licensee of the Blue Cross and Blue Shield Association; through its subsidiaries, it is licensed to conduct insurance operations in all fifty states. Am. Compl. ¶2. On January 23, 2008, Well-Point issued a press release and held a conference call announcing somewhat surprisingly positive guidance after 2007, which had been a difficult financial year for the Company. In these communications, the Company expressed confidence that many of the problems that had adversely affected WellPoint in 2007 would not impact its 2008 results. Relying in part on the statements of nineteen confidential witnesses (“CWs”), Plaintiff asserts that WellPoint’s management either knew or recklessly disregarded the falsity of the Company’s communications to investors. Plaintiff specifically contends that Well-Point was aware of its problems in the areas of claims processing, system integration, actuarial forecasting, enrollment trends, medical costs, and reserve levels. Accordingly, Plaintiff avers that there was no basis for WellPoint’s positive projections to investors.

A. The January Press Release

WellPoint issued a press release on January 23, 2008 (“the January Press Release”) to report the Company’s results for the fourth quarter of 2007 and the entire 2007 fiscal year. Am. Compl. ¶ 55. The January Press Release included an “Outlook” section, which set the following expectations for 2008:

• net income of $6.41 per share, representing growth of 15.3% over 2007;

• year-end medical enrollment of approximately 35.6 million members, representing growth of approximately 800,000 members over 2007; and

• an approximation of 81.6% for the 2008 benefit expense ratio.

Id. ¶ 56. The January Press Release also contained the following statement issued by DeVeydt:

We remain confident in our earnings per share target of $6.41 for 2008, which represents annual growth of 15.3 percent. ... We expect to continue generating strong cash flow in excess of our net income, and we plan to utilize our capital to expand product offerings, enhance services[,] and improve returns for our shareholders. We expect to repurchase more than $4.0 billion of our stock during 2008, subject to market conditions.

Id. ¶ 55. Moreover, the January Press Release expressed confidence in the projected 81.6% benefit expense ratio for 2008 despite the fact that this value had been higher in 2007 than in 2006 (an increase from 81.2% to 82.4%). Id. ¶ 57. WellPoint attributed the 2007 value to unusually higher claims costs, business mix changes, and unexpectedly less favorable reserve development, which had been caused in part by slower claims processing from system migration. The Company explained that “[approximately 80 basis points of the increase was driven by the medical business of the Specially, Senior and State Sponsored Business reporting segment.” Id. WellPoint justified the remaining increase in basis points by noting that its Commercial and Consumer Business (“CCB”) segment had experienced “a business mix shift[], including a decline in [ipdividual membership!] and less favorable than expected reserve development in 2007.” Id. According to WellPoint, its positive projection for 2008 was attributable to “the strong full year 2007 operating results in its CCB segment, its outlook for stable medical cost trends in 2008[,] and the expected improvements in its State Sponsored operations.” Id.

In the section titled “Membership,” the January Press Release boasted burgeoning enrollment — specifically, the addition of 708,000 new members over the course of 2007. Jan. Press Release at 2. The January Press Release addressed these membership developments in a few notable segments, e.g., the conversion of 144,-000 members of Connecticut’s Medicaid managed care programs from fully insured to self-funded policies during' the fourth quarter of 2007. Id. According to the January Press Release, unless extended, the self-funded arrangement for these members was set to expire on February 29,2008. Id.

The January Press Release also discussed WellPoint’s expectations regarding medical cost trends as follows:

Medical cost trends were below 8.0 percent in 2007, with the primary driver being unit cost increases. The Company continues to expect that medical cost trends will remain below 8.0 percent in 2008[] and continues to price its business so that expected premium yield exceeds total cost trend, where total cost trend includes medical costs and selling, general and administrative ... expense.

Am. Compl. ¶ 58; Jan. Press Release at 8.

The last page of the January Press Release included a section entitled “Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995.” In that section, WellPoint informed its audience that the January Press Release contained forward-looking information about the Company that was “subject to certain risks and uncertainties ... that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward looking information and statements.” Jan. Press Release at 15. The Company bolstered its warning by including a litany of risks, to wit:

• “trends in health care costs and utilization rates”;

• “reduced enrollment, as well as a negative change in our health care product mix”;

• “changes in economic and market conditions”;

• “inability to receive and process information”; and

• “failure to effectively maintain and modernize [its] information systems.”

Id.

B. The January Call

On January 23, 2008, WellPoint also held an earnings conference call (“the January Call”) announcing its results for the fourth quarter of 2007 and the entire 2007 fiscal year. Am. Compl. ¶¶ 10, 59. Braly and DeVeydt served as spokespersons for the Company during the January Call and were joined by numerous financial analysts. Id. ¶ 59. At the start of the Call, WellPoint’s Chief Accounting Officer advised listeners that some forward-looking statements would be made. Jan. Call Tr. at 2. He expressed the following warning:

Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of WellPoint. These risks and uncertainties can cause actual results to differ materially from our current expectations^] and we advise listeners to review the risk factors discussed in our press release this morning and other periodic filings we make with the SEC.

Id.

As it had in the January Press Release, WellPoint estimated during the January Call that the Company would achieve $6.41 earnings per share (“EPS”) (constituting a 15.3% increase over 2007), an increase of 800,000 total new members, and an 81.6% benefit expense ratio. Am. Compl. ¶ 11. To justify the 2008 projections, Braly stated:

Our expected growth in 2008 and beyond results in part from a number of milestones we’ve accomplished during 2007. During the year, we expanded the services and value we offer to our members. We also improved our operational efficiency and reduced administrative costs as a percentage of revenue. We improved the selling, general, and administrative expense ratio by 120 points during 2007 when compared to 2006. General and administrative expenses actually declined in 2007 while we served more than 700,000 new members. And we accomplished this while making strategic investments to grow our business in the future and provide superior service to our members.

Jan. Call Tr. at 3; see Am. Compl. ¶ 62. Among the Company’s other 2007 achievements, Braly noted that WellPoint had “[c]omplet[ed] several system migrations, resulting in lower technology production costs and improved information management capabilities.” Id.; Jan. Call Tr. at 4.

In terms of membership, Braly reiterated that the Company’s business mix had shifted to 51% self-funded and 49% fully insured over the course of 2007. Jan. Call Tr. at 2-3; Am. Compl. ¶ 61. Braly explained this change in part by reference to the abovementioned Connecticut Medicaid membership conversion. Id.; Jan. Call Tr. at 2. She also noted that, notwithstanding the 2007 business mix change, there had been only “nominal contributions to EPS,” which allowed the Company to stand by its $6.41 EPS guidance for 2008. Id. at 3; Am. Compl. ¶ 61. Further, Braly confirmed WellPoint’s expectation of 800,-000 new members in 2008. This figure apparently represented “lowering [of Well-Point’s] full-year membership growth guidance by 200,000.” Jan. Call Tr. at 3.

When DeVeydt fielded additional questions about the Company’s business shift, he explained that certain mitigating factors allowed him to remain confident in the guidance being issued at that time. At the same time, he cautioned, “[W]e have a number of moving parts here, and again, we are three weeks into the year at this point, so it’s hard to have 100% visibility.” Jan. Call Tr. at 10-11. DeVeydt did, however, note that “we think when you net [the competing factors] all out, we are still going to be dead on with our original guidance.” Id. at 11.

With regard to the benefit expense ratio, Braly attributed the increase between 2006 and 2007 (from 81.2% to 82.4%) to “higher than expected claims costs in the medical business of our Specialty, Senior[,] and State Sponsored business reporting segment ... as well as business mix changes and less favorable than expected reserve development in 2007.” Jan. Call Tr. at 3. DeVeydt later elaborated on this issue, saying:

As we previously discussed, 2007 was unfavorably impacted by 2006 reserves that developed less favorably in 2007 than anticipated. This contributed 60 basis points of a difference between our 4Q '06 and 4Q '07 benefit expense ratios. In addition, higher than anticipated medical claims in our Ohio and Connecticut state-sponsored operations impacted the fourth-quarter 2007 benefit expense ratio by about 40 basis points. We incurred operating losses in both of these programs in 2007. We’ve taken fiscally responsible action in our problematic State Sponsored programs in Ohio and Connecticut.... [W]e are currently in the process of exiting the Ohio CFC Medicaid program due to the inability to obtain fiscally sound rates. The Connecticut Medicaid contract converted to a self-funded arrangement during the fourth quarter of 2007 and also in California, we resolved pricing in all but one county and we expect resolution in the county this quarter.

Forty basis points of the difference in benefit expense ratio include a mix shift with a larger proportion of our business being in higher loss ratio products, and other items.

And finally, we also experienced a relatively high level of intra-year reserve adjustments in the CCB segment during the fourth quarter of 2007, and this unfavorably impacted the comparison to the fourth quarter of 2006 by another 50 basis points. We are migrating to fewer claims systems and streamlining our operations and processes. As a result, we’ve seen a slowdown of certain claims processing and our September 30, 2007 reserves did not completely adjust for this slowdown. In the fourth quarter, we dedicated resources to address this issue and improved the timeliness of affected claims processing. We have carefully evaluated our year-end reserves. We’ve adjusted our completion factors to better take business process changes into consideration and are confident that our reserving is consistent, conservative, and appropriate, maintaining our high single-digit margin for adverse development.

Jan. Call Tr. at 5; see Am. Compl. ¶ 63.

Because many of the factors contributing to the increase had ostensibly occurred in the fourth quarter, DeVeydt stated that “[t]he higher than expected 4Q '07 benefit expense ratio resulted from items that generally should not impact 2008.” Jan. Call Tr. at 5; Am. Compl. ¶ 63. DeVeydt further explained:

[0]ur 2008 benefit expense ratio guidance remains at 81.6% for the year, given the strong full-year 2007 operating results in our CCB segment, our continued outlook for stable medical cost trends in 2008, and the expected improvements in our State Sponsored operations. We continue to price our business so that our expected premium yield exceeds total cost trend, where total cost trend includes medical costs and selling, general and administrative expenses. As evidenced by our announced withdrawal from the Ohio CFC Medicaid program, we remain very disciplined in our underwriting approach and do not pursue business that we believe is priced below our profitability targets. Our 2007 medical cost trend was less that 8% and we continue to expect our 2008 medical cost trend to also be less than 8%.

Id.

Both Braly and DeVeydt were asked to justify their shared belief that the Company’s benefit expense ratio would fall in 2008. Braly explained that, despite some system migration, WellPoint had achieved greater timeliness in claims processing and better transparency with its reserves— changes stemming from the Company’s focus on excellent service. Jan. Call Tr. at 8; Am. Compl. ¶ 65. DeVeydt provided a more specific answer: slower claims processing in 2007 were attributable to the Company’s migration of systems. Jan. Call Tr. at 8. However, DeVeydt asserted that certain changes, e.g., the Company’s ability to pay down some of its backlog in the fourth quarter of 2007, had enabled more transparency surrounding the reserves. Id. He stated, “I would say I feel very confident that we’ve got our reserves at that high single digit level they’ve been at historically and that we’re going to start the new year off very strong. But these types of items do occur.” Id.

When discussing the Company’s reserves for medical costs, DeVeydt pronounced:

[0]ne of the things that we’ve met with the actuaries on and talked about is the fact that we want to ensure that when we go into '08, that we go in with great confidence, that we’re not going to fall short. It’s still an estimate. I can’t tell you that it’s going to be exactly 100% right. It could be a little over, it could be a little under. But at this point in time we’re still looking at it. The other thing is, our cycle time has really shrunk between when we’re receiving the claims and when we’re paying it. And that’s part of our initiative to drive better customer service.

Jan. Call Tr. at 15; Am. Compl. ¶ 67. Braly added the following comments:

Well, also, we do have fewer claims processing systems now than we had at the end of '06. And we’re seeing the benefit of that in a number of ways. We can get our arms around the inventories, the claims processing metrics. We get better visibility as we get more efficient and have fewer systems.

Jan. Call Tr. at 15; Am. Compl. ¶ 67.

A Morgan Stanley analyst asked De-Veydt whether WellPoint would adjust pricing later that year. To substantiate her question, the analyst cited higher than expected medical trends in 2007, which had caused the Company to increase its reserves for that year. Jan. Call Tr. at 13; Am. Compl. ¶ 66. In response, DeVeydt conceded that the “medical trend was slightly higher than ... expected [in 2007]” but restated his confidence in Well-Point’s pricing for 2008. Jan. Call Tr. at 13.

Another analyst asked Braly and De-Veydt to discuss WellPoint’s 2007 system migration process in terms of hypothetical 2008 migrations. Jan. Call Tr. at 18; Am. Compl. ¶ 69. Braly replied that there had been “quite a bit of migration movement over '06 and '07____We had some flawless execution around those migrations. So our plan is to continue to migrate in the way that we have with the process improvement,] so we are doing so slowly and cautiously and making good decisions.” Jan. Call Tr. at 18. She also repeated her views on continuing the system migration. Id.

Later in the January Call, an analyst from Deutsche Bank inquired how Well-Point was approaching its projections in light of the slowing economy. Jan. Call Tr. at 21-22; Am. Compl. ¶ 70. DeVeydt responded accordingly:

It’s interesting, we have baked into our guidance an assumption for a slowdown .... Now the good news is I think our assumptions were conservative and we are actually seeing slightly better than expected results there, which is good. But I think we are far from having this economy downturn be final. And so we’re not ready to declare victory there that we’ve got it 100% right. But right now I would say some of our assumptions appear to be conservative at this point.

Flip side is, we all know that when we start to see reductions in jobs, that you actually end up having an uptick in utilization initially because you have individuals who are taking advantage of those elective services that they didn’t have done before. When they know they’re losing their job, they try to take advantage of that. So that is something we all have to keep an eye on for the next year relative to that. But we did bake in some of that into our original guidance and right now ... we appear to be okay on that.

Jan. Call Tr. at 22.

Nevertheless, WellPoint’s representatives also made several cautionary statements about the Company’s estimates: that only three weeks of 2008 had elapsed; that estimates might not be “exactly 100% right”; that “better data as the year goes on” was typical; that the economic downturn could continue; that the Company was still migrating multiple information technology systems; and that WellPoint’s agreement with Connecticut Medicaid would expire in February. Jan. Call Tr. at 15-16, 18, 22. The January Call’s final transcript, like the January Press Release, also concluded with a “Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995” section. Id. at 24-25.

C. The Conference

On January 30, 2008, WellPoint sent Michael Kleinman, its Vice President of Investment Relations (“Kleinman”), as its representative for participation in the Wachovia Healthcare Conference (“the Conference”). Am. Compl. ¶ 73. Kleinman began his Conference presentation with the usual cautionary words — namely, that he would be making forward-looking statements that were “subject to certain risks and uncertainties that [were] spelled out more fully in our SEC filings available on our website.” Conf. Tr. at 1.

Once again, the projection of a decreased benefit expense ratio arose. Conf. Tr. at 5; Am. Compl. ¶ 73. Kleinman addressed the issue, stating, ‘Tear over year, the medical loss ratio did go up 120 basis points ... [but] we feel good going forward .... ” Conf. Tr. at 7. He attributed the expected decrease in that metric to the Company’s loss of a “high loss ratio” account and its efforts to decrease expenses by standardizing processes and eliminating certain levels of management. Kleinman also explained that the ongoing system migrations factored into the lower benefit expense ratio projection, noting that “[p]art of the way[ ] that we’re driving cost out of the system is through consolidating systems.... Now we are standardizing our processes and are doing a very good job of coming down.” Id. at 5; Am. Compl. ¶ 73. According to Kleinman, the Company forecasted three “base claims-processing systems [by] 2010-2011[] and [would] ultimately continue to move lower from there.” Conf. Tr. at 5. He also provided an (admittedly self-described) “oversimplified” explanation of the system migration process. Id. In his concluding remarks, Kleinman declared, “We have talked extensively about some of the issues that we had with particular states and about the actions that we’ve taken. So we feel good going forward that we’ve got those issues under control.” Id. at 7.

D. System Integration and Business Shift Problems

Along with the preceding allegations, Plaintiff claims as evidence of Defendants’ fraudulent mindset (scienter) that Defendants were well aware of certain “system integration problems” at the time of the January announcements. Plaintiff pleads this purported scienter as detailed in the ensuing section.

As mentioned previously, WellPoint acquired various unintegrated data processing systems whenever it absorbed another company. See Am. Compl. ¶ 5. Because this was evidently quite a headache, Well-Point initiated efforts to create the Enterprise Data Warehouse (“EDW”), an integrated and centralized data depository, in mid-2007. The EDW faced several challenges throughout 2007 and during the first quarter of 2008; by the start of the Original Class Period, it had not progressed past its “infant stages.” Id. ¶¶ 6, 78(b). In fact, Confidential Witness (“CW”) 6 claims that the Company was utilizing at least thirteen to fourteen different “standalone” systems as of January 2008. Id. ¶ 78(b). Three of Plaintiffs other CWs have stated that at least eight companies acquired before 2004 — all with their own data warehouses, processes, and procedures for data collection, storage, analysis, and reporting — had not been integrated into WellPoint’s information system as of 2008. Id.

Plaintiff contends that these challenges caused the problems created by the lack of system integration in 2007 to continue during the Original Class Period. Am. Compl. ¶¶ 6, 12, 78(a). For instance, CW9 reports that the lack of integration “hampered WellPoint’s visibility into claims data and [its ability to] ... accurately forecast medical costs, reserves or price trends.” Id. ¶ 78(a). CW 13 adds that the lack of visibility into claims data was a “direct cause” of WellPoint’s overstated projections during the Original Class Period. Id. ¶ 78(c). Meanwhile, WellPoint’s actuaries continued to receive data in a variety of formats, making it “extremely difficult” to analyze reserves and forecast pricing. Id. The Company also had a significant increase in its medical claims backlog (including “thousands of claims” sent to the Suspended Claims Group and claims returned due to submission errors) by January 2008. Id. ¶¶ 7, 14, 39, 40, 45, 49, 78(e)-(h). As a result, WellPoint wrote off millions of dollars in late 2007 or early 2008. To complicate matters, the Company’s medical claims cost trends had been deteriorating by that point. Braly responded in part to these problems by internally announcing a new reorganization strategy for 2008 aimed at controlling increasing costs of care. Id. ¶¶ 8,16, 44, 78(i).

It is Plaintiffs assessment that Well-Point’s system integration woes and lack of visibility into claims data and medical cost trends left the Company unable to price its product accurately or to forecast its medical reserves or benefit expense ratio. Am. Compl. ¶ 13, 78(b)-(c). This conundrum caused the Company to make a significant understatement of reserves for its 2008 medical costs. Id. ¶ 78(c). WellPoint’s focus on system integration snags also diverted attention from processing claims and further “deteriorated the reliability of [the Company’s] forecasting data.” Id. ¶¶ 13, 78(d). Based on the Company’s experience in 4Q07, Plaintiff asserts that Defendants were aware of this dilemma and had discussed how the forecasting problems would affect WellPoint going forward. Id. ¶ 15. During the Original Class Period, Braly sought to extend the Company’s forecast from six to at least eleven months “to help clarify the forecasting process and avoid future misses.” Id. The new forecast was completed on February 22, 2008.

Other variables compounded WellPoint’s existing difficulties with system integration and cost trends. For instance, by the end of 2007 the Company’s business had begun to shift toward more self-funded policies (as opposed to fully-funded policies, which tend to be more profitable). Am. Compl. ¶¶ 9,17, 43, 51, 78(j). This trend was partly traceable to the economic downturn generally affecting the country, although CW 16 has stated that the move toward self-funded products was “obvious” to the Company by October 2007. Id. ¶ 78(j). According to Plaintiff, WellPoint tried to mitigate the effect of this change by increasing rates before 2008, which instead exacerbated the shift as more members chose self-funded plans. Id. ¶9. Plaintiff further alleges that Defendants knew the Company had not secured the number of projected 2008 enrollees by December 2007' based on WellPoint’s October to December 2007 open enrollment period. Id. ¶¶ 17, 78(j).

Bearing in mind each of these system integration and business shift problems, Plaintiff asserts that Defendants knew their 2008 guidance was inappropriate. Plaintiff specifically states that Braly admitted knowledge that the Company would not achieve its 2008 guidance at a Well-Point managers’ meeting in mid-February 2008. “[A]ll high-ranking executive officers [and] the Individual Defendants” traditionally attended WellPoint managers’ meetings. Am. Compl. ¶ 54. At this particular meeting, Braly warned attendees that they would hear “rumors” about “issues” that WellPoint intended to announce to the public. Id. ¶¶ 18, 54. CW 19 has alleged that Braly advised attendees against engaging in any rumors, urging them to wait until the issues were properly disclosed to the public. Id. ¶ 54.

E. 2007 Form 10-K

On February 21, 2008, Braly, DeVeydt, and Glasscock signed WellPoint’s Form 10-K and filed it with the SEC. Am. Compl. ¶ 75. This form addressed the issue of the Company’s benefit expense ratio projections as follows:

The most judgmental accounting estimate in our consolidated financial statements is our liability for medical claims payable____We record this liability and the corresponding benefit expense for incurred but not paid claims including the estimated costs of processing such claims. Incurred but not paid claims include (1) an estimate for claims that are incurred but not reported, as well as claims reported to us but not yet processed through our systems; ... and (2) claims reported to us and processed through our systems but not yet paid

Liabilities for both claims incurred but not reported and reported but not yet processed through our systems are determined in aggregate, employing actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. Actuarial Standards of Practice require that the claim liabilities be adequate under moderately adverse circumstances. We determine the amount of the liability for incurred but not paid claims by following a detailed actuarial process that entails using both historical claim payment patterns as well as emerging medical cost trends to project our best estimate of claim liabilities....

For the most recent incurred months (generally the most recent two months), the percentage of claims paid for claims incurred in those months is generally low. This makes the completion factor methodology less reliable for such months. Therefore, incurred claims for recent months are not projected from historical completion and payment patterns; rather they are projected by estimating the claims expense for those months based on recent claims expense levels and health care trend levels, or “trend factors.”

Id. ¶ 75.

WellPoint’s Form 10-K did not revise any of the projections the Company had issued in January, although Plaintiff alleges that such guidance was no longer viable due to “a significant rise in medical costs and an unprofitable shift in new enrollment to [s]elf-[f]unded members” prior to that date. Am. Compl. ¶ 77. Furthermore, Plaintiff contends that WellPoint failed to disclose that the Company “lacked the ability to adequately forecast pricing trends and medical cost reserves because of its system integration issues ... [and] had significantly understated its medical cost reserves and priced its 2008 products at less profitable levels.” Id.

F. WellPoint’s March 2008 Revised Guidance and Aftermath

On March 10, 2008, WellPoint issued a press release entitled “WellPoint Revises 2008 Earnings Per Share Guidance.” Am. Compl. ¶ 79; Defs.’ Ex. 3. In keeping with previously issued communications, this press release also opened with a safe harbor statement. Defs.’ Ex. 3 at 2-3. Well-Point revised its EPS forecast from $6.41 to “in the range of $5.76 to $6.01 per share, assuming net realized investment gains of approximately $0.06 per share.” Id. at 7. This range still represented an increase over the $5.56 EPS reported for 2007. The Company also revised its member growth projection to 500,000 new members and increased its forecasted benefit expense ratio from 81.6% to “a range of 82.8 to 83.1 percent.” Id. at 7-8. WellPoint attributed these revisions to higher than expected medical costs, lower than expected prior year reserve development, lower than expected fully insured enrollment, and the changing economic environment. Defs.’ Ex. 3 at 7. The press release also included the following explanation from Braly:

We are making these revisions to our prior earnings guidance due to higher than expected medical costs, lower than expected fully insured enrollment and, to a lesser extent, the changing economic environment in which we are operating. ... While we are disappointed with having to revise our 2008 outlook, we are still expecting growth this year, with record levels of membership, revenue and earnings per share. We are taking actions and making investments in our business to further improve our performance during the balance of this year and beyond.

Id.

WellPoint also held a conference call on March 10, 2008 (“the March Call”) to discuss its revised guidance. During the March Call, Braly addressed each of the reasons the Company cited in its latest press release to these revisions.

With regard to medical costs, Braly explained that, “while [WellPoint] continue[d] to have favorable reserve development for the first two months of 2008, it was still less than [the Company’s] targeted level.” In other words, the original trend assumptions for 2008 had been understated. Mar. Call Tr. at 2. She noted that the higher medical costs had impacted a number of the Company’s product lines. Id. "When it was DeVeydt’s turn to speak, he informed listeners:

A primary driver of this increase is related to increased medical trend; a portion is due to the underwriting results in our Senior products; part is related to the California state-sponsored revenue reduction; while the remainder of the increase is related to business mix as individual business becomes a small portion of our revenue base.

Id. at 4. DeVeydt admitted that “it [was] generally in most markets where we missed the trend for 2008.” Id. at 5. Later, in response to an analyst’s question, Braly stated, “[W]hen we looked at where the trend was in December, we did make adjustments in our completion factors, thinking that would be sufficient to address it. We have now seen January and February and realize our completion factors weren’t adjusted enough.” Id. at 7. In addition, she acknowledged that the Company’s “claim cycle times continued to increase in 2008” despite steps taken to decrease processing times. Id. at 2.

In the matter of WellPoint’s revised membership projection, Braly explained, “While our total enrollment levels to date are close to our expectations, the growth has been weighted more towards self-funded customers than we had planned.” Mar. Call Tr. at 3. Braly attributed approximately half of the reduction in membership projection to the potential loss of the Connecticut Medicaid ASO contract. She further stated, “While we’re hopeful that we could keep this contract under reasonable terms, our guidance assumes the possible exit from the Connecticut Medicaid business later this year.” Id. Finally, Braly surmised that the weakening national economy was significantly affecting certain segments of WellPoint’s membership. Id.

On March 11, 2008, the day after Well-Point issued its guidance revisions and only six weeks after the January Call, the Company’s common stock price dropped by $18.66. Am. Compl. ¶ 85. The closing price on that day, $47.26 per share, represented a 28.3% decline. Id. That same day, Jamie Miller, WellPoint’s Chief Accounting Officer, Senior Vice President, and Controller, announced her resignation from the Company, effective April 4, 2008. Id. ¶ 83.

G. “Suspicious” Stock Sales

Weeks before the Company issued its revised guidance, Glasscock and two other Company managers sold portions of their WellPoint stock. Glasscock sold 87,113 shares of his personally held stock (which represented 26.8% of his total holdings with the Company, or 6.59%, including options) during the Original Class Period. Am. Compl. ¶ 98. Plaintiff avers that these executives made over $7.3 million from their sales and that Glasscock’s portion of that total exceeded $6.6 million. Additionally, Plaintiff contends that the sales “demonstrate [Defendants’ knowledge that their fiscal year 2008 guidance was baseless, that WellPoint’s system[] integration problems continued to hamper the Company’s operations and that the truth about the foregoing, once known to the market, would batter the Company’s stock price.” Id. ¶ 20.

II. Plaintiffs “New” Allegations

Plaintiff filed her Motion for Leave to File a Second Amended Complaint with this court on November 8, 2010. In the PSAC, which is appended to the motion as Exhibit A, she renews her prior allegations that Defendants knew or recklessly disregarded that statements within the January Press Release, the January Call, the Conference, and the 2007 Form 10-K were false and misleading. See PSAC ¶ 33. Plaintiff also maintains that the PSAC “adds ... new facts about a fraudulent scheme [the Company was] involved in with other major health care insurers.” Pl.’s Br. at 2. This scheme (“the Ingenix Scheme”), which allegedly commenced well before the Original Class Period, changes the relevant class period so that it would encompass October 24, 2007 through March 10, 2008 (“the Putative Class Period”). Id.; see PSAC ¶ 1. Plaintiff provides the following overview of these facts: “WellPoint, along with the nation’s other biggest health care insurers, created and used a flawed and conflict-ridden database owned by Ingenix Inc., to set artificially low reimbursement rates for out-of-network services in violation of the Company’s contractual obligations to its members.” PL’s Br. at 2. Specifically, Plaintiff directs the Court’s attention to paragraphs 5-11, 18-33, 71-74, 95-99, 100-03, 106-15, 117-19, 133, and 135-73 of the PSAC, which she designates as the “new” basis for permitting leave to amend. We enumerate Plaintiffs new allegations below.

A. Background on the Ingenix Scheme and Formal Investigation

When WellPoint members seek medical services from out-of-network providers, the Company reimburses them for these services “by paying the lesser of the billed charge or the ‘usual and customary rate’ (UCR) of doctors in the same or similar geographic area for substantially the same service.” PSAC ¶ 5. The Company represents to its members that the UCR for any given medical service is “the prevailing charge charged by most providers of comparable services in the specific area where the member received the service.” Id. Importantly, WellPoint is contractually obligated to calculate accurate UCRs and use these values when reimbursing members. Id. UCRs are also relevant to the Company’s benefit expense ratio; the dollar amount of out-of-network reimbursements represents a significant portion of this metric. Id. ¶ 6.

Here, Plaintiff avers that WellPoint, along with other insurers, impermissibly colluded to manipulate reimbursement rates in a scheme that “had a direct impact on the Company’s financial results, causing it to significantly understate benefit expenses during the Class Period.” PSAC ¶ 7. Plaintiff alleges that WellPoint and other unnamed companies created a flawed database to set UCRs and ensure that these values were artificially low. Ingenix Inc., a subsidiary of United Health Group, owned the database. Id. According to Plaintiff, Ingenix was the only commercial source of UCR data at that time. Id. ¶ 8. Plaintiff asserts that the Company and other Ingenix Scheme participants had a contractual relationship with Ingenix wherein Ingenix granted insurers access to software and UCR data, and the insurers, in turn, provided claims data that Ingenix used to create the database. Further, Plaintiff contends that all Ingenix Scheme participants received sizable software and access discounts because they contributed claims data to this “closed loop system.” Id. “[B]ecause of this inherent conflict of interest,” Plaintiff asserts, “WellPoint knew that the Ingenix[ ] database was defective and conflict-ridden when it was relying on it for reimbursements.” Id. ¶ 9. Plaintiff additionally posits that the database contained doubly “scrubbed” data; first, the Company discarded high “outlier” costs before submitting values to Inge-nix, and second, Ingenix applied its own “scrubbing” methods to remove remaining high charges from their computations. Id. Having thereby discarded its own definition of UCRs, WellPoint allegedly used artificially low reimbursement rates — “in some cases, up to 30% lower than the actual rates for the services.” Id. ¶ 10.

One of Plaintiffs “new” allegations in the PSAC is that WellPoint was aware of (and, in fact, acknowledged) its practice of underpaying for members’ claims long before the Original Class Period. Awareness purportedly came from “complaints from providers, patients and regulatory authorities.” PSAC ¶ 11. Plaintiff asserts generally that “WellPoint finally publicly admitted after the Class Period that there were ‘inherent conflicts of interest’ in the business relationship with Ingenix and [that] ‘WellPoint acknowledge^] the conflicts of interest in the Ingenix database.’ ” Id. ¶ 10. More specifically, Plaintiff cites an August 7, 2007 public hearing held by the California Department of Managed Health Care to address the business practices of Blue Cross, one of WellPoint’s subsidiaries. Id. ¶ 11. Plaintiff also refers to a written announcement authored by the California Medical Association which stated that “Blue Cross ha[d] engaged in abusive payment practices” since 2004. Id. Further, Plaintiff discusses the investigation of Ingenix undertaken by Andrew Cuomo, New York’s then-Attorney General, in early 2008. Pl.’s Br. at 2-3 (noting that Cuomo intended to subpoena a WellPoint subsidiary in connection with his investigation). With respect to that investigation, Plaintiff notes a report published by Cuomo’s office “confirming] ... [that] the Ingenix databases in fact under-reimburse[d] consumers.” PSAC ¶ 10 (internal quotation marks omitted).

On February 13, 2008, Cuomo proclaimed that the Office of the New York State Attorney General was charging Ingenix with fraud for having furnished a “defective and manipulative database ... with rigged pricing for medical services” to WellPoint and other insurers. PSAC ¶ 18. The value of WellPoint stock immediately dropped after this announcement and the news of Cuomo’s impending subpoenas. Plaintiff asserts that “in the two weeks following ... Cuomo’s announcement and an internal disclosure by Braly in mid-February that [WellPoint’s problems] would soon be announced publicly, [Defendants sold off more than $4.8 million of their WellPoint stock holdings.” Id. Combined with Glasscock’s alleged stock sale of $2.5 million on February 6, 2008, Plaintiff alleges that the named Defendants profited to the tune of at least $7.3 million before issuing the Company’s revised guidance on March 10, 2008. Id.

B. The October Press Release

WellPoint issued a press release on October 24, 2007 (“the October Press Release”) in which it reported the Company’s results for the third quarter of 2007. PSAC ¶¶ 19, 66. In the October Press Release, the Company made the following representations regarding 3Q07 finances:

• Net income had been $868 million, and net income per diluted share had been $1.45.

• The Company’s benefit expense ratio had been 81.7%, which represented an increase of 50 basis points from the third quarter of 2006.

• Based on medical trends from previous quarters in that fiscal year, the Company believed it could appropriately forecast a 2007 medical cost trend estimate of less than 8%.

Id. ¶¶ 66-68. The Company explained that the higher overall benefit expense ratio stemmed from an increased value in the “Specially, Senior, and State Sponsored Business” reporting segment, which was offset in part by a decreased value in the “Commercial and Consumer Business” reporting segment. According to the October Press Release, the decline in the latter value demonstrated “the Company’s commitment to disciplined pricing.” Id. ¶ 67. The document also quoted Braly’s optimistic view that the Company was committed to a growth target of at least 15% for EPS. Id. ¶¶ 19, 66. “[I]n truth,” Plaintiff asserts, “WellPoint’s 3Q07 reported financial results were false because WellPoint materially understated its 3Q07 benefit expenses by not recording any reserves for the backlog of unreported claims tied to the system integration problems and by using artificially low reimbursement rates for out-of-network service reimbursements.” Id. ¶ 19. Plaintiff similarly alleges that the Company’s 2008 guidance was false because it was based on the same purportedly altered Ingenix data. Moreover, Plaintiff asserts that the Company had “no reasonable basis” for the forecasts made at any time during the Putative Class Period because (1) WellPoint was aware of, but did not publicly acknowledge, its involvement in the Ingenix Scheme, and (2) CWs had informed Well-Point that “the same system integration problems which had caused WellPoint to miss its 4Q07 forecasts continued to negatively affect the Company.” Id. ¶ 23.

C. The October Call

At some point on October 24, 2007, Well-Point conducted a conference call to discuss the Company’s 3Q07 earnings (“the October Call”). Braly repeated the EPS of $1.45 that the Company had reported in the October Press Release and stated, “[T]hese results are in line with our prior guidance!,] and we continue to have met or exceed our EPS guidance every quarter.” PSAC ¶ 69. During the October Call, De-Veydt confirmed the 2007 medical cost trend of less than 8%. DeVeydt also informed those on the call that the Company was “committed” to its EPS growth target (at least 15%) for 2008. Id. ¶ 70.

D. 2007 Form 10-Q

WellPoint’s third significant act on October 24, 2007 was to file its Form 10-Q with the SEC. In this form, Defendants restated the financial results summarized in the October Press Release and the October Call. PSAC ¶ 71. The form also included several statements made by Braly and DeVeydt, which represented the following certifications:

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; [and] Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

Id. ¶ 72. Elsewhere in the document, Braly and DeVeydt certified that all information in the Form 10-K “fairly presented] in all material respects” the Company’s financial condition and the results of its operations. Id.

In sum, Plaintiff alleges that Defendants knew that the foregoing statements from the October Press Conference, the October Call, and the Form 10-Q were fraudulent. See PSAC ¶74. Plaintiff explains that such knowledge is evident from Defendants’ failure to disclose the Company’s participation in the Ingenix Scheme and its system integration problems. Thus, according to Plaintiff, “WellPoint’s benefit expense was materially understated during the Class Period and caused WellPoint’s 3Q07 financial results, issued in [the October Press Release, the October Call, and the Form 10-Q], to be false and misleading and in violation of GAAP and SEC rules.” Id.

E. New Allegations Regarding “Suspicious” Stock Sales

Plaintiff again submits that the stock sales of Glasscock, Sheila Burke, and Kenneth Goulet are facts from which the Court may (and, indeed, should) infer scienter. PSAC ¶ 131. During the PSAC’s Putative Class Period, “insiders” made over $23.1 million by selling shares of their personal stock in the Company. Plaintiff asserts that $5 million dollars’ worth of these sales took place after the WellPoint managers’ meeting and Cuomo’s February 13, 2008 announcement regarding his investigation into the alleged Inge-nix Scheme. Id. Glasscock sold 273,779 shares of his WellPoint stock during the Putative Class Period, which Plaintiff has classified month-by-month for the Court. According to Plaintiffs chart, Glasscock sold 62,222 shares of his Company stock in November 2007, 62,222 shares in December 2007, 62,222 shares in January 2008, and 87,113 shares in February 2008. Id. It is Plaintiffs contention that Glasscock timed these sales “to take maximum advantage of the artificial price inflation” caused by Defendants’ alleged misrepresentations. Id. ¶ 133.

Between May 4, 2005 and February 11, 2008, Glasscock sold his personally-owned WellPoint stock using a trading plan authorized by Rule 10b5-l of the Exchange Act. PSAC ¶ 134. He entered into a new Rule 10b5-l trading plan on February 11, 2008.

F. Post-Class Period Allegations

After concluding his investigation of the Ingenix database, Cuomo published a report summarizing the study. The report was issued in January 2009 and included among its findings:

Insurers mislead and obfuscate in their policy language. They promise to reimburse based on usual and customary rates — a form of market rate — but then reimburse on schedules complied by their own, the nation’s second largest health insurer, which has an interest in depressing reimbursement rates. They hide this conflict from their members. They pretend an independent database underlies these rates — it does not. Our investigation found that the schedules themselves, created in a well of conflicts, are unreliable, inadequate and wrong— usually at the expense of the consumer.

PSAC ¶ 106. Cuomo declared that Well-Point failed to disclose that “other health care insurers, including WellPoint, contributed information to the [Ingenix] database.” Id. ¶ 107. He also opined that any alleged conflicts with the database were 'real, not hypothetical, “because the Inge-nix databases in fact under-reimburse[d] consumers” and employed a fraudulent model for reimbursing out-of-network care. Id. ¶ 108. As per Cuomo’s report, “[t]he lack of disclosure and conflicts of interest” produced the alleged fraud, and the resultant loss was “understated market rates for UCRs by up to 28% across New York State, which translates to at least hundreds of millions of dollars in losses to consumers over the past ten years across the country.” Id. ¶¶ 108-09 (internal quotation marks omitted).

Plaintiff further maintains that in February 2009, WellPoint entered into a pecuniary settlement with Cuomo and executed an Assurance of Discontinuance. This document stated that a WellPoint subsidiary contributed data to and used the Inge-nix database and that, via other subsidiaries, the Company itself used Ingenix. PSAC ¶ 110. On the same day the Company agreed to settle with Cuomo, then-Executive Vice President Ken Goulet allegedly said, “WellPoint acknowledges the conflicts of interest in the Ingenix database which the Attorney General’s investigation brought to light.” Id. ¶ 111. A subsequent report of the U.S. Senate Committee on Commerce, Science, and Transportation pronounced that:

Insurers that contributed charge data to Ingenix often “scrubbed” their data to remove high charges. Ingenix ... used its own statistical “scrubbing” methods to remove valid high charges from their calculations.

The results of these questionable statistical methods were estimates of “usual and customary” charges that consistently skewed reimbursement rates downwards — in a direction that allowed insurers to reduce their claims payments.

Th[e] close ... business relationship between Ingenix and the health insurance industry [has] existed for more than a decade.

Id. ¶ 113-14.

G. “Additional” Scienter Allegations

In the PSAC, Plaintiff attempts to bolster her prior scienter allegations concerning the individually named Defendants. She states that Braly and DeVeydt, both “new top management” executives eager to prove their value to the Company, reported “repeatedly” on various metrics and fielded analysts’ questions. PSAC ¶ 117. “[B]ased on their communication with investors,” Plaintiff avers, “Braly and De-Veydt represented to the market that they had intimate knowledge of the Company’s financial results, including expense benefits and related metrics.” Id.

Next, Plaintiff reasserts that, “[a]s confirmed by the [Senate] report,” WellPoint used the Ingenix database to determine reimbursement rates before and during the Putative Class Period. PSAC ¶ 118. Plaintiff mentions a letter in which the President and CEO of a New Jersey-based WellPoint subsidiary wrote that he knew of no alternative data sources for health care reimbursement rates. She then contends that, “[a]s WellPoint’s top executives, [Defendants knew that WellPoint contracted with Ingenix to obtain access to Ingenix’s databases and in turn ... provided claims data for Ingenix[ ].” Id. Moreover, Plaintiff posits that because the nation’s largest health insurers used Ingenix, “[D]efendants knew, or recklessly disregarded, the inherent conflict of interest in using the Ingenix database to calculate reimbursement rates.” Id. To corroborate her allegations that Defendants knew or recklessly disregarded false statements, Plaintiff cites: (1) an August 2007 California public hearing on Blue Cross of California’s business practices; (2) a statement by the California Medical Association discussing “information received from physicians and patients” about “Blue Cross’s purportedly abusive payment practices”; and (3) Cuomo’s February 2008 announcement that he was investigating Ingenix. Id.

Most of the PSAC’s remaining supplementary paragraphs pertain to Plaintiff’s position that evidence of scienter lies in Defendants’ alleged accounting misstatements and disclosure violations. Plaintiff asserts that the Company’s Form 10-Q and Form 10-K were materially false and misleading because Defendants materially understated certain financial metrics and evaded disclosure of “material adverse” information regarding the Ingenix Scheme and system integration allegations. PSAC 140. After listing several distinctive Generally Accepted Accounting Principles (“GAAP”) applicable to WellPoint during the Putative Class Period, she pronounces that, “[i]n violation of [these] GAAP rules, [Defendants disregarded the available information after December 31, 2007 and failed [to] adjust [the] fiscal year 2007 benefit expense and IBNR reserves in [the] 2007 Form 10-K.” Id. ¶¶ 145-49, 152-54. The first piece of “available information” to which she alludes is the Company’s system integration problems that generated poor visibility into claims data and unreported claims. Id. ¶ 143. Secondly, she refers to Defendants’ alleged failure to know the Company’s actual costs and liabilities for Q307 and the 2007 fiscal year. Thirdly, despite a portion of its financial statements (which Plaintiff terms a “disclosure”) regarding factors “to be considered in developing [their] best estimate^],” Plaintiff asserts that Defendants did not establish IBNR reserves that “incorporated these exact factors.” Id. ¶¶ 150-51. Lastly, Plaintiff states that Defendants neglected to incorporate Cuomo’s subpoena and “certain other events occurring in early 2008 that gave [them] further insight” into Form 10-K. Plaintiff claims that this information was “require[d] consideration by management” but inappropriately disregarded by Defendants. Id. ¶ 152.

Plaintiff likewise alleges that the following Management, Discussion, and Analysis (“MD & A”) disclosures in Defendants’ financial statements were limited and materially misleading:

Liabilities for both claims incurred but not reported and reported but not yet processed through our systems are determined in aggregate, employing actuarial methods that are commonly used by health insurance actuaries and meet Actuarial Standards of Practice. Actuarial Standards of Practice require that the claim liabilities be adequate under moderately adverse circumstances. We determine the amount of the liability for incurred but not paid claims by following a detailed actuarial process that entails using both historical claim payment patterns as well as emerging medical cost trends to project our best estimate of claim liabilities.

Circumstances to be considered in developing our best estimate of reserves include changes in utilization levels, unit costs, mix of business, benefit plan designs, provider reimbursement levels, processing system conversions and changes, claim inventory levels, claim processing patterns, claim submission patterns and operational changes resulting from business combinations.

* * *

We regularly review and set assumptions regarding cost trends and utilization when initially establishing claim liabilities.

* * *

Our benefit expense includes costs of care for health services consumed by our members, such as outpatient care, inpatient hospital care, professional services (primarily physician care) and pharmacy benefit costs.

* * *

Our cost of care trends are calculated by comparing the year-over-year change in average per member per month claim costs for which we are responsible, which excludes member co-payments and deductibles. While our cost of care trend varies by geographic location, based on medical cost trends during the twelve months ended December 31, 2007, our aggregate 2007 cost of care trend was less than 8%.

* * *

Benefit expense increased $3.8 billion

Our benefit expense ratio increased 120 basis points to 82.4% in 2007.

PSAC ¶ 155. In Plaintiffs opinion, Defendants knew (or were reckless not to know) that their earlier projections were unsustainable because of system integration problems and WellPoint’s alleged participation in the Ingenix Scheme. She contends that Defendants violated SEC rules about MD & A disclosures by failing to supplement the above disclosures with “known adverse information” — that the Company’s past and current results would not be predictive of future results. Id. ¶ 156. In support of her pronouncements, she cites SEC releases that stress the importance of disclosing, inter alia, “information necessary to an understanding of the registrant’s financial condition,” “material events and uncertainties known to management,” and “matters that will have an impact on future operations and have not had an impact in the past.” Id. ¶¶ 159-60.

Accompanying Plaintiffs assertion that Defendants knew (or were reckless in not knowing) that the Company’s Putative Class Period financial statements were “materially false and misleading” is an inventory of several “additional factors” which she believes are symptomatic of scienter. This list, in pertinent part, sets forth the following “indicators” of Defendants’ knowledge or recklessness:

• [t]he types of accounting gimmicks employed — the accounting misstatements and disclosure violations at issue were not due to simple mathematical errors or honest misapplication of [ ] accounting standards. For example, the Company’s involvement in a fraudulent insurance billing scheme is evidence that it was [Defendants’] intent to understate its ... financial metrics ....

• [t]he duration over which the improper accounting was perpetrated .... WellPoint issued financial results and 2008 earnings guidance on several occasions during the Class Period before it was forced to reveal its trae financial condition by drastically lowering its earnings guidance at the end of the Class Period when its accounting improprieties could no longer be concealed ....

• [t]he magnitude or size of the misstatements ____ [T]he Company’s understatement of ... financial metrics was clearly material during the Class Period ....

• [t]he applicable accounting rules that were violated .... [T]he Company misapplied fundamental accounting principles ....

• [t]he income statement effect of the misstatements----[that is,] understating expenses and inflating net income during the Class Period ....

• [t]he significance of the financial statement items that were misstated ____ Notably, the Company disclosed ... in its Class Period financial statements: ... “We consider some of our most important accounting policies that require estimates and management judgment to be those policies with respect to liabilities for medical claims payable----”

PSAC ¶ 137 (emphases omitted). Finally, Plaintiff avers that WellPoint’s Sarbanes-Oxley certifications — those depicted above in the “2007 Form 10-K” and “2007 Form 10-Q” sections — establish scienter. “[B]e-cause Braly and DeVeydt certified [that] they had personally performed the review procedures as of the dates they signed the Sarbanes[-]Oxley certifications,” Plaintiff reasons, “they either knew of the accounting misstatements in the Class Period financial statements or [] they knowingly failed to carry out the required review of the Company’s financial statements and evaluation of the Company’s disclosure controls.” Id. ¶ 138. Thus, according to Plaintiff, the signatures of Braly and De-Veydt evince Defendants’ knowledge or reckless disregard that these forms “wer