Full opinion text
Opinion and Order BARBARA S. JONES, District Judge. This case arises out of a massive fraud at Satyam Computer Services Ltd. (“Satyam” or the “Company”), involving thousands of forged invoices, business contracts-and bank statements, dual sets of account books, and SEC .filings overstating the Company’s assets by a total of more than $1 billion. Before the Court are motions to dismiss two related complaints. The first is a consolidated class action against Satyam, certain officers and outside directors, the Company’s outside auditors, and other entities, alleging violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 783(b) and 78t(a), SEC Rule 10b-5, 17 C.F.R. § 240.10b-5 (“Rule 10b-5”), and sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77k, 77Z(a)(2), and 77o (the “Class action”). The second is an action brought by Aberdeen Claims Administration, Inc., on behalf of investors in Aberdeen Claims Trust and Aberdeen Claims Trust II, against Satyam, the Officer Defendants, the PwC Defendants, and the Maytas Defendants, alleging violations of sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 and common law claims for fraud, negligence, and negligent misrepresentation (“Aberdeen action”). The Director Defendants have moved to dismiss the Exchange Act and Securities Act claims against them in the First Amended Consolidated Class Action Complaint (“FACC”), and the Maytas Defendants have moved to dismiss the section 20(a) claim asserted against them in the FACC and the section 20(a) and common law claims asserted against them in Aberdeen’s Second - Amended Complaint (“SAC”). For the reasons provided below, the motions to dismiss the FACC and the SAC are GRANTED. BACKGROUND 1. Prior Proceedings On April 28, 2009, this Court consolidated a group of actions brought by individuals and institutional investors to hold accountable the perpetrators of the Satyam fraud. (Dkt. No. 4.) On May 12, 2009, the Court appointed the Global Institutional Investors group as Lead Plaintiff of this action and the law firms of Grant and Eisenhofer P.A., Bernstein Litowitz Berger & Grossman LLP, Barrow Topaz Kessler & Check LLP, and Labaton Sucharow LLP, as Lead Counsel for the class. (Dkt. No. 8.) On July 17, 2009, Lead Plaintiffs filed their first Consolidated Class Action Complaint against the Company, the Officer Defendants, the AC Defendants, the SA Defendants, the PwC Defendants, and the Maytas Defendants. (Dkt. No. 19.) The parties briefed Defendants’ motions to dismiss that complaint. The Class filed the FACC on February 17, 2011. (Dkt. No. 253.) Aberdeen filed its initial complaint in the Eastern District of Pennsylvania on November 13, 2009. (Dkt. No. 1 in 10-cv-2877.) Shortly thereafter, Aberdeen filed its First Amended Complaint on December 12, 2009. (Dkt. No. 14 in 10-cv-2877.) The action was transferred to the Southern District of New York on April 12, 2010. (Dkt. No. 15 in 10-cv-2877.) Aberdeen filed the SAC on February 18, 2010. (Dkt. No. 254.) II. The Parties A. Plaintiffs i. Lead Plaintiffs Public Employees’ Retirement System of Mississippi (“MPERS”), Mineworkers’ Pension Scheme (“MPS”), SKAGEN AS (“SKAGEN”), Sampension KP Livsforsikring A/S (“Sampension”) (collectively, “Lead Plaintiffs”) represent a class of investors who (a) purchased or otherwise acquired Satyam ADSs on the New York Stock Exchange (“NYSE”) and/or (b) were investors residing in the United States who purchased or otherwise acquired Satyam common stock on the National Stock Exchange of India (“NSE”) or the Bombay Stock Exchange (“BSE”) between January 6, 2004, and January 6, 2009 (the “Class Period”) and who were damaged by the purportedly fraudulent conduct alleged in the FACC. MPERS manages billions of dollars of assets for the benefit of more than 75,000 retired public employees of the State of Mississippi and for the future benefit of more than 250,000 current and former public employees. (FACC ¶ 17.) The FACC alleges that MPERS purchased Satyam common stock on Indian stock exchanges during the Class Period at artificially inflated prices and suffered damages as a result of Defendants’ alleged fraudulent conduct. (FACC ¶ 17.) The MPS is a registered pension scheme registered in the United Kingdom which pays income to more than 255,000 members in retirement. (FACC ¶ 18.) SKA-GEN is a Norwegian mutual fund manager that handles billions of dollars in assets. (FACC ¶ 19.) Sampension is a Danish pension fund that manages billions of dollars in assets for the benefit of employees in the Hellerup, Denmark local government, as well as employees in the graphical arts industry. (FACC ¶ 20.) The FACC alleges that MPS, SKAGEN, Sam-pension, and additional named plaintiff IBEW purchased Satyam ADSs on the NYSE during the Class Period at artificially inflated prices and suffered damages as a result of Defendants’ allegedly fraudulent conduct. (FACC ¶¶ 18-21.) ii. Additional Named Plaintiffs International Brotherhood of Electrical Workers Local Union # 237 (“IBEW”) is a New York union pension fund responsible for managing approximately $30 million for the Niagara Falls, New York, electrical workers union. (FACC ¶ 21.) Brian F. Adams (“Adams”) is a former Satyam employee who participated in two of the Company’s five employee stock option plans in existence during the Class Period. (FACC ¶ 22.) Adams purports to represent a sub-class all current and former employees who, during the Class Period, acquired and exercised options to purchase Satyam ADSs or ordinary shares through one of Satyam’s five employee stock options plans pursuant to the allegedly false and misleading statements made by Defendants and who suffered damages as a result of the fraudulent conduct alleged in the FACC (the “sub-class”). (FACC ¶¶ 23, 342.) The relevant employee stock option plans are: 1) Associate Stock Option Plan (“ASOPOrdinary”): The plan offers options to purchase Satyam ordinary shares and was annexed as an exhibit to the Company’s May 7, 2001 Registration Statement. Securities issued pursuant to the ASOP-Ordinary plan were subject to the Form F-3 filed by Satyam on February 25, 2005, which was last amended on May 9, 2005. (FACC ¶ 340a.) 2) Associate Stock Option Plan B (“ASOP-B”): The plan offers options to purchase Satyam ordinary shares and was annexed to the Company’s Form 20-F filed on April 28, 2006. Securities issued pursuant to this plan were subject to the Form F-3 filed by Satyam on February 25, 2005, which was last amended on May 9, 2005. (FACC ¶ 340b.) 3) Associate Stock Option Plan ADS (“ASOP-ADS Plan”): The plan offers options to purchase Satyam ADSs and was attached to the Form 20-F filed on April 28, 2006. Securities issued pursuant to this plan were subject to the Form F-3 filed by Satyam on February 25, 2005, which was last amended on May 9, 2005. (FACC ¶ 340c.) 4) Associate Stock Option Plan-RSUs ADS (“RSU-ADS Plan”): This plan offers options to purchase Satyam ADSs and was attached to the registration statement filed on January 12, 2007. (FACC ¶ 340d.) 5) Associate Stock Option Plan-RSUs (“RSU-Ordinary Plan”): This plan offers options to purchase Satyam ordinary shares and was filed with the Form 20-F on April 30, 2007. (FACC ¶ 340e.) The FACC alleges that Adams acquired options under the ASOP-ADS and RSU-Ordinary plans, but exercised options to purchase Satyam securities under only the ASOP-ADS plan. (FACC ¶¶ 23, 342.) iii. Aberdeen Aberdeen Claims Administration, Inc. (“Aberdeen”) is the trustee for the Aberdeen Claims Trust and Aberdeen Claims Trust II (“Trusts”), which are in turn the assignees of the rights of the various investors in the Trusts to pursue claims in this action. (SAC ¶¶ 24, 26.) Individuals who invested in the Trusts purchased Satyam common stock on the BSE and/or the NSE, and/or purchased ADSs on the NYSE. (SAC ¶ 27.) Roughly 20 entities comprise this group of investors. (SAC ¶ 28.) In total, Aberdeen seeks recovery for the investors’ losses totaling approximately $68 million resulting from the Satyam fraud. (SAC ¶ 29.) B. Defendants i.Satyam Satyam is an Indian public company that “provides global IT and business process outsourcing services to clients in numerous industries and throughout the world[.]” (FACC ¶ 24; SAC ¶ 36-38.) During the Class Period, Satyam ordinary shares traded on the NSE and the BSE, and its ADSs were listed on the NYSE until October 2010, when the Company moved its ADS trading to the over-the-counter market. (FACC ¶ 26.) The Company settled the charges brought against it by the SEC, as well as the claims against it in the FACC. ii.Officer Defendants Three former Satyam senior executives have been incarcerated in India since January 2009. (FACC ¶¶ 27-28, 30.) Ramalinga Raju founded the Company and was the Chairman of the Board of Directors (the “Board”) throughout the Class Period. (FACC ¶ 27; SAC ¶ 40.) Rama Raju is Ramalinga Raju’s younger brother and served as the Company’s Managing Director and CEO throughout the Class Period. (FACC ¶ 28; SAC ¶ 41.) Vadlamani Srinivas (“Srinivas”) was Satyam’s CFO throughout the Class Period. (FACC ¶ 30; SAC ¶ 42.) All three Officer Defendants resigned on January 7, 2009. (FACC ¶¶ 27-28, 30; SAC ¶¶ 40-42.) iii.AC Defendants As noted above, the FACC alleges section 10(b) and Rule 10b-5 violations against the following former directors of Satyam who each, at some point during the Class Period, served on the Company’s Audit Committee. Mangalam Srinivasan (“Srinivasan”) is an expert in international financial management and a distinguished fellow at Harvard University’s Kennedy School of Government. (FACC ¶ 50.) She was a member of the Board from July 1991 until December 25, 2008, and she served on the Audit Committee when the Company filed its 2004, 2005, 2006, 2007, and 2008 Form 20-Fs. (FACC ¶ 50.) Srinivasan is alleged to have signed the January 12, 2007, Registration Statement (the “2007 Registration Statement”). (FACC ¶ 429.) Krishna G. Palepu (“Palepu”) is a professor of Business Administration and Senior Associate Dean at Harvard Business School. (FACC ¶ 51.) He served on the Board from January 2003 until December 29, 2008, and was a member of the Audit Committee when the Company filed its 2004, 2005, 2006, 2007, and 2008 Form 20-Fs. (FACC ¶ 51.) Palepu is alleged to have signed the 2007 Registration Statement. (FACC ¶ 429.) M. Rammohan Rao (“Rao”) was Dean of the Indian School of Business until January 8, 2009, and was a Satyam director from July 29, 2005 until December 29, 2008. (FACC ¶ 52.) He served on the Audit Committee when the Company filed its 2006, 2007, and 2008 Form 20-Fs, and became the Chairman of the Audit Committee in July 2007. (FACC ¶ 52.) Rao is alleged to have signed the 2007 Registration Statement. (FACC ¶ 429.) T.R. Prasad (“Prasad”) is a former Cabinet Secretary and Defense Secretary of the Government of India, as well as former Chairman of the Foreign Investment Promotion Board, Secretary of Industrial Policy and Promotion, and member of the Finance Commission of India. (FACC ¶ 53.) He served on the Board from April 2007 until January 7, 2009, and was a member of the Audit Committee when the Company filed its 2007 and 2008 Form 20-Fs. (FACC ¶ 53.) V.S. Raju is a former Director, Dean and Professor of the Indian Institute of Technology. (FACC ¶ 54.) He was a Satyam director from April 2007 until January 7, 2009, and was án Audit Committee member when the Company filed its 2007 and 2008 Form 20-Fs. (FACC ¶ 54.) The FACC alleges that these AC Defendants “were responsible for overseeing the preparation and integrity of the Company’s financial statements; the engagement, performance, and compensation of the Company’s independent auditors; and the adequacy and effectiveness of the Company’s internal accounting and financial controls.” (FACC ¶ 55.) iv. SA Defendants Vinod K. Dham (“Dham”) was a member of the Board “at all relevant times,” and signed the 2007 Registration Statement. (FACC ¶¶ 56, 429.) He resigned from the Board on December 29, 2008. (FACC ¶ 56.) Ram Mynampati (“Mynampati”) was also a member of the Board throughout the Class Period, and he signed the 2007 Registration Statement. (FACC ¶¶ 57, 429.) During his tenure at Satyam, Mynampati was “the public face of the company in the US, particularly for interactions with investors.” (FACC ¶ 57.) He resigned as Director and Interim CEO in June 2009. (FACC ¶ 57.) Dham and Mynampati, along with Srinivasan, Palepu, and Rao, are the subjects of the sub-class’s Securities Act claims. v. Maytas Defendants Maytas Infra Ltd. (“Maytas Infra”) is a publicly held infrastructure development, construction, and management company located in India. (FACC ¶ 33.) Members of the Raju family, including Ramalinga Raju and his two sons, Teja Raju and Rama Raju Jr., held a significant financial stake in and exercised control of Maytas Infra. (FACC ¶ 33; SAC ¶ 112.) Maytas Infra had significant ■ holdings in Satyam stock during the Class Period. (FACC ¶ 33; SAC ¶ 114.) Teja Raju was Vice Chairman of Maytas Infra during the Class Period. (FACC ¶ 35; SAC ¶ 113.) Maytas Properties is a real estate development and management company, controlled by members of the Raju family, including Ramalinga Raju, Teja Raju and Rama Raju Jr. (FACC ¶ 34; SAC ¶ 115.) The FACC alleges that cash from the Company was funneled through Maytas Properties for the acquisition of real estate by the Raju family and in furtherance of the Raju brothers’ fraudulent scheme. (FACC ¶ 34.) Rama Raju Jr. was Vice Chairman of Maytas Properties during the Class Period. (FACC ¶36; SAC ¶ 116.) Together, the Maytas entities “were essential partners in the fraudulent scheme and recipients of untold sums of money misappropriated from Satyam; they were also among the tools and instrumentalities employed to perpetuate the fraud.” (SAC ¶ 9.) Both the FACC and the SAC allege that the Maytas Defendants are liable as control persons under section 20(a) of the Exchange Act for the Company’s fraud. (FACC ¶ 37; SAC ¶ 338.) III. The Alleged Fraud A. Overview of the Officer Defendants’ Scheme Based in large part on the January 7, 2009, written confession of Ramalinga Raju, Plaintiffs allege that the PwC Defendants, Director Defendants, and Maytas Defendants were all either active participants or recklessly complicit in the massive fraudulent scheme perpetrated by the Officer Defendants and the Company. In this letter, Ramalinga Raju reported that as of September 30, 2008, Satyam’s balance sheet overstated its assets by over $1 billion, fabricated interest income of $80 million, overstated its receivables by $100 million, and failed to report a debt of $260 million owed by the Company as a result of undisclosed related party loans to the Company. (FACC ¶ 79.) The FACC outlines the means by which the fraud was allegedly perpetrated, supported in large part by the investigation reports of the Indian Central Bureau of Investigation (“CBI”) and hundreds of witness statements taken by CBI investigators and obtained by Lead Plaintiffs’ counsel. (FACC ¶¶ 68-69.) As part of the scheme, the Officer Defendants instructed certain Satyam employees to create fake invoices without any corresponding purchase order and to cover up the false invoices by manipulating the programming of the Company’s invoice management system. (FACC ¶¶ 89-92). More than 7,000 phony invoices were generated this way, representing more than 10% of all Satyam invoices during the period. (SAC ¶ 268.) Employees who helped the Officer Defendants with this part of the fraud were compensated with stock options without having to go through the proper channels. (FACC ¶¶ 94-95; SAC ¶ 271.) The Officer Defendants maintained two sets of books: one with the inflated figures and one reflecting the true sales figures. (FACC ¶96; SAC ¶269.) The employees who generated the false invoices reported to Indian authorities that they had also been instructed to destroy evidence of their fraudulent conduct. (SAC ¶ 270.) In addition, the Officer Defendants recorded “ghost employees” on the books and diverted the salaries for these nonexistent people (as much as $4 million per month) to the Maytas entities through secret accounts maintained by Ramalinga Raju. (FACC ¶ 74; SAC ¶ 288.) To make it look like the Company had in fact earned the nonexistent proceeds and to cover up the fake salaries, the Officer Defendants forged deposit receipts, bank statements, bank confirmation letters, and letters describing nonexistent fund transfers. (FACC ¶¶ 97-102; SAC'¶ 272.) The perpetrators sought to destroy incriminating evidence of these forgeries during the period of time leading up to Ramalinga Raju’s confession. (FACC ¶.¶ 103-04; SAC ¶ 272.) The scheme also involved diverting Satyam funds for the benefit of the Raju family. More specifically, Plaintiffs allege that between 1999 and 2008, the Raju family diverted cash from Satyam to create a network of up to 327 secret companies, including the Maytas entities, which were used to fund the acquisition of roughly 8,000 acres of land in India for the personal benefit of the family. (FACC ¶¶ 105-14; SAC ¶ 273-74.) These activities created a serious cash shortage at Satyam, even though the Company reported an abundance of cash reserves. (FACC ¶ 115.) To cover up the land acquisition activities, Ramalinga Raju, Rama Raju, and other family members arranged secret loans to the Company, using their stock as collateral, from third party financial sources controlled by the Rajus. (FACC ¶ 115; SAC ¶277.) Between November 2006 and October 2008, 37 of the secret companies transferred approximately $307 million to Satyam’s bank accounts, of which approximately $42 million was returned to 15 of the 37 compa- ■ nies. (FACC ¶ 268.) These off-the-books loans, which were backed by artificially-inflated Satyam securities, left the Company with roughly $265 million in unpaid loan obligations. (SAC ¶ 279.) At the direction of the Officer Defendants, these related-party loans were never disclosed to investors and were instead recorded as proceeds from the previously entered fraudulent sales. (FACC ¶¶ 115-17; SAC ¶ 278.) Ramalinga Raju, Rama Raju, and Maytas Infra, in addition to other unspecified Raju family members, reaped the benefit of the falsified invoices, bank document forgeries, secret related party loans, and fake salaries by selling Satyam stock at prices that were artificially inflated as a result of their fraudulent conduct. (FACC ¶¶ 118 — 23; SAC ¶ 282.) In addition, the' Officer Defendants diverted a portion of the Company’s foreign earnings to tax havens, which funds were then transferred to Maytas Infra and other companies owned or controlled by Ramalinga Raju and his sons. (SAC ¶ 275.) To avoid detection of these ill-gotten gains, they and other family members sold their common stock by transferring shares to family members and trusted employees (straw men) who then sold the shares through five family-owned companies, which remitted the proceeds back to the straw men, who transferred the money back to • the Rajus. (FACC ¶ 120; SAC ¶¶ 281, 284-86.) Plaintiffs allege that Ramalinga Raju, Rama Raju, and Maytas Infra took approximately $68 million from these insider transactions. (FACC ¶ 119-21; SAC ¶ 282.) B. False and Misleading Statements Lead Plaintiffs allege that, as a result of the extensive fraudulent conduct described above, the Company’s cash position, bank deposits, and receivables were significantly overstated, and its debt levels were significantly understated, making virtually all of the financial statements and related disclosures issued by Satyam during the Class Period false and misleading in all material respects. (FACC ¶ 244.) In addition, the gross exaggeration of the number of employees in the Company and their utilization rate, made in numerous press releases, conference calls, SEC filings, and other public disclosures furthered the false illusion that the Company was growing and overstated the level of demand for Satyam’s services.- (FACC ¶¶ 245-47.) i. SEC Filings Lead Plaintiffs also allege that all of the false and misleading statements alleged in the FACC were contained in or incorporated by reference into the Company’s annual reports (Form 20-Fs) and quarterly reports (Form 6-Ks) during the Class Period, all of which were signed by Rania Raju as CEO and Srinivas as CFO. (FACC ¶ 248.) Specifically, the Form 20-Fs filed for fiscal years 2004-2008 and the Form 6T Ks filed for 2005-2008 and the first half of 2009 were allegedly false and misleading in several ways. (FACC ¶¶ 251-52.) First, the statements materially overstated the Company’s revenues, which resulted in the overstatement of gross profits and caused the Company to overstate its earnings per share and its cash flows. (FACC ¶¶ 254-58.) Second, the Company’s balance sheets reflected assets which were really the false proceeds from the non-existent business that had been fraudulently recorded on the books. (FACC ¶ 259.) Thus, the Company’s balance sheet disclosures of cash and investments in bank deposits were false and misleading, the Company reported sham interest income that was purportedly earned on the false bank deposits, and the Company overstated its accounts receivables, retained earnings, and shareholder equity. (FACC ¶¶ 259-65.) Third, the undisclosed related party loans resulted in material understatements of the Company’s debt liabilities, including an outstanding undisclosed liability of approximately $265 million resulting from loan activity between November 2006 and October 2008. (FACC ¶ 268.) Fourth, the annual reports disclosed much exaggerated employee numbers and utilization rates. For instance, the Company’s 2004 Form 20-F reported 14,456 employees and the 2008 Form 20-F reported 50,570 employees, representing a 250% growth in numbers in a span of four years. (FACC ¶ 271.) Plaintiffs allege that as many as 13,000 of the more than 50,000 reported employees did not actually exist. (FACC ¶ 271.) Beginning in at least 2007, the reported utilization rates were also inflated by as much as 2 0% during the Class Period to reflect the productivity levels of the ghost employees. (FACC ¶¶ 272-73.) Finally, the Company’s certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, which were attached to each annual report filed during the Class Period, falsely certified that the Form 20-Fs fully complied with Exchange Act requirements and “fairly present[ed], in all material respects, the financial condition and results of operations of the Company.” (FACC ¶¶ 274-76.) The SAC alleges similarly that all of Satyam’s Form 6-Ks and Form 20-Fs between April 30, 2004, and October 24, 2008, misreported the Company’s revenue from sales, cash and bank balances, and accrued interest. (SAC ¶¶ 121-243.) ii. Public Statements In addition to false SEC filings, Lead Plaintiffs’ allege that the Company made numerous false statements to the public, which artificially inflated the trading prices of Satyam ordinary shares. (FACC ¶ 277.) The FACC alleges that Ramalinga Raju boasted about the Company’s revenue growth in several conference calls with analysts, on April 22, 2004, April 21, 2005, April 21, 2006, April 20, 2007, and April 21, 2008. (FACC ¶¶ 278, 280, 282, 284-85, 287.) The participants on these calls consistently communicated to the investing public, based on Ramalinga Raju’s statements, that the Company was strong throughout the entire Class Period. (FACC ¶¶ 279, 281, 283, 286, 288.) Aberdeen also alleges that the press releases and public remarks accompanying many of Satyam’s SEC filings misrepresented the strength of the Company and likewise were used to create a false impression among the investing public about Satyam’s financial health. (SAC ¶¶ 134-136, 139-41, 144-46, 159-61, 164-66, 169-71, 185-87, 191-92,195-97, 201-03, 210-12, 215-17, 220-22, 226-28, 231-33, 240-42.) C. Red Flags Lead Plaintiffs claim that the AC Defendants’ “reckless discharge of their responsibilities directly caused Satyam to issue the false and misleading statements ... and was a direct and proximate cause of the harm suffered by Class members.” (FACC ¶ 238.) The Audit Committee is charged with the following responsibilities: • Oversight of Satyam’s financial reporting process and ensuring that the financial statements are correct, sufficient and credible; • Review of the quarterly financial statements with management before submission to entire Board; • Review of adequacy of internal audit processes, including structure and staffing of auditing department, the reporting structure coverage, and the frequency of internal audits: • Provide recommendations regarding the retention and payment of an independent auditor; • Approve retention and payments to the independent auditor for any non-audit services rendered; and • Review, with management, of the performance of the independent and internal auditors, as well as the adequacy of Satyam’s internal controls. (FACC ¶ 240.) According to Lead Plaintiffs, the AC Defendants were the “watchdogs” of the Company and recklessly disregarded their responsibilities in the face of “extensive information” that should have caused them to discover and prevent the fraud. (FACC ¶¶70, 241.) Lead Plaintiffs allege that there were certain “red flags” that should have alerted the AC Defendants to the fraud, including the magnitude of the fraud, the excessive auditor fees paid to PwC (the independent auditor), knowledge of deficient internal auditing controls, and the Maytas Acquisition proposal. (FACC ¶ 242.) i. Magnitude and Duration of the Fraud Lead Plaintiffs contend that the “sheer materiality” of the false statements which allegedly overstated the Company’s revenues by roughly $190 million annually and overstated the Company’s assets by over $1 billion should have tipped off the AC Defendants to the existence of the fraud. (FACC ¶ 242a.) The FACC alleges that “[i]t is not plausible that a pervasive fraud of the magnitude carried out by the Officer Defendants and PwC could have been achieved in the absence of, at a minimum, an extreme and reckless departure by the Audit Committee Defendants from any applicable standard of care.” (FACC ¶ 242a.) In addition, Lead Plaintiffs assert that the AC Defendants were highly educated and sophisticated people who, but for their recklessness, should have and would have detected the fraud. (FACC ¶ 242a.) ii.Excessive Fees Paid to PwC India The FACC alleges that PwC participated actively in the perpetration of the fraud designed by the Officer Defendants. In exchange for this participation, Lead Plaintiffs allege, the Company paid PwC grossly excessive fees for their auditing services, at times more than 14 times greater than the auditing market would dictate. (FACC ¶ 189.) In addition, Satyam paid PwC approximately $300,000 in both 2007 and 2008 for “other related services.” (FACC ¶¶ 191, 242b.) Certain AC Defendants were aware of the abnormally high level of fees being paid to PwC and the “sudden increase in the audit fee” for 2007 and 2008. (FACC 1242b.) When these individuals asked senior management about the fees, they were told that “the auditors were required to do a lot of work” and that the auditors’ workload had “increased two fold,” and the AC members took the issue no farther. (FACC 1242b.) Lead Plaintiffs contend that the AC Defendants were negligent in not investigating sufficiently the apparently exorbitant auditing fees paid to PwC. (FACC 1242b.) iii.Deficiency of Internal Audit Controls Lead Plaintiffs also assert that on May 10, 2007, and August 8, 2008, PwC sent “Management Letters” addressed “to the Company”, which included hundreds of internal control deficiencies identified by PwC. (FACC 1242c.) In addition, the FACC refers to an internal PwC email containing comments from a PwC employee regarding “suggested text for a presentation to the Audit Committee.” (FACC ¶ 242c.) The email contained the following language: Slide 7: Control deficiencies We have identified deficiencies in internal control over financial reporting that we consider to be control deficiencies and significant deficiencies. We have presented management a list of control deficiencies and Slides 16 to 19 of this presentation include the reporting to the audit committee of the significant deficiencies. (FACC ¶ 242c.) Based on the Slide, Lead Plaintiffs allege that the AC Defendants were aware of the numerous internal financial reporting control deficiencies and were reckless in not taking steps to investigate and correct them. (FACC ¶ 242c.) iv.Proposed Maytas Acquisition On December 16, 2008, roughly three weeks before Ramalinga Raju confessed to the fraud, the Company announced that it was going to acquire 51% of Maytas Infra and 100% of Maytas Properties in a $1.6 billion deal (the “Maytas Acquisition”). (FACC ¶ 38.) In response to the “immediate outrage from the global investment community,” Satyam withdrew the proposal only a few hours after the announcement. (FACC ¶¶ 8, 39.) In his confession letter, Ramalinga Raju described the Maytas Acquisition deal as “a last ditch attempt by the Raju family to cover up the fraud by allowing Satyam to acquire real assets for its non-existent cash.” (FACC ¶ 38.) Lead Plaintiffs alleges that “Satyam’s supposedly independent Board members voted unanimously to approve the transaction.” (FACC ¶ 39 (emphasis in original).) Neither of the Maytas entities’ business models was related to Satyam’s, and the Maytas Acquisition allegedly overvalued the Maytas entities considerably. (FACC ¶ 242d.) In addition, the proposed deal would have depleted all of Satyam’s reported cash and bank balances. (FACC ¶ 242d.) According to Lead Plaintiffs, the AC Defendants acted as a “rubber stamp” for management’s plans and approved the Maytas Acquisition without inquiring about the justifications for it, despite the fact that it reflected an irrational business decision and would have benefitted the Raju family directly. (FACC ¶ 242d.) v. Improper Remuneration of Defendant Palepu The FACC also alleges that the payment to Defendant Palepu for consulting services he provided at the time he was serving on the Board, for which he was compensated separately, was another red flag that the AC Defendants recklessly ignored. (FACC ¶ 242e.) According to Lead Plaintiffs, this “improper remuneration” compromised Palepu’s independence as a Board member. (FACC ¶ 242e.) D. Disclosure of the Fraud On September 15, 2008, Satyam announced that it was downsizing by 4,500 employees, which signaled that the Company’s services were less in demand than the Company had previously reported. (FACC ¶ 297.) As a result of this partial disclosure, the public trading price of Satyam ordinary shares declined by roughly 10% and the price of its ADSs declined by roughly 14%. (FACC ¶ 298.) Subsequently, the Company announced the Maytas Acquisition on December 16, 2008, and quickly canceled the deal in response to investors’ negative response, resulting in severe damage to investors’ confidence in management’s credibility. (FACC ¶¶ 299-301.) This damage led to an immediate decrease in ordinary share price by roughly 30% and a roughly 31.8% decline in the ADS price. (FACC ¶ 302.) Ramalinga Raju submitted to the Board and released to the public simultaneously his confession letter on January 7, 2009, in which he admitted to the massive fraudulent enterprise and implicated his brother in the fraud. (FACC ¶ 303; SAC ¶290-92, 297.) At the time, there were roughly 670 million shares of outstanding Satyam securities. (SAC ¶ 300.) Ordinary share prices fell 77.6% on that day, and another 40% on the next day, totaling a two-day decline of 87%. (FACC ¶303; SAC ¶ 301.) Trading in Satyam ADS on the NYSE halted before the markets opened in the U.S., and resumed again only on January 12, 2009, at which time the ADS price had dropped roughly 87%. (FACC ¶ 303; SAC ¶ 302.) In September 2010, the Company filed with its Form 6-K a Statement of Unaudited Standalone and Consolidated Financial Results for 2009-10, as well as the results of the Company’s forensic investigation into the fraud. (FACC ¶ 304; SAC ¶ 244-45.) This filing also admitted the financial irregularities and internal financial reporting control deficiencies during the Class Period. (FACC ¶304; SAC ¶ 244-46.) The total impact on Satyam’s financial controls was reported to be $1.5 billion. (FACC ¶ 305a.) The September 2010 filing provided additional metrics of the fraud’s tremendous impact and reported that the internal controls over financial reporting were not effective at a reasonable assurance level. (FACC ¶¶ 305b-c, 306-11.) The Company also announced that it and several of its officers, directors, and auditors were being investigated and/or prosecuted by a number of Indian and U.S. government agencies. (FACC ¶ 313; SAC ¶ 294.) IV. Claims A.FACC Based on the foregoing factual allegations, the FACC charges the AC Defendants with two counts of civil securities fraud. In Count II of the FACC, Lead Plaintiffs allege that the AC Defendants violated section 10(b) of the Exchange Act and Rule 10b-5 by recklessly failing to prevent the fraudulent inflation of the Company’s reported assets and earnings as well as the fraudulent reduction of Satyam’s liabilities. (FACC ¶ 367.) Lead Plaintiffs attribute all of the Company’s allegedly false and misleading statements to the AC Defendants because they had “extensive control of and role in the Company’s financial reporting systems[.]” (FACC ¶ 366.) Count V of the FACC alleges that the AC Defendants violated section 20(a) of the Exchange Act as control persons of the Company who had and exercised the power to influence the Company’s decision-making. (FACC ¶ 387.) Count IV alleges that the Maytas Defendants were control persons subject to liability under section 20(a) because of their “practical operational control of the Company, their representation within the management and Board of Directors through the Officer Defendants, and/or stock ownership!;.]” (FACC ¶ 381.) In Counts X and XI, the employee stock option sub-class charges the SA Defendants with violations of sections 11 and 12(a)(2) of the Securities Act in connection with the RSU-ADS Plan and the RSU-Ordinary Plan, which were attached to the 2007 Registration Statement and the April 30, 2007 Form 20-F, respectively. (FACC ¶¶ 420, 437.) Count XII alleges strict liability under section 15 of the Securities Act against the SA Defendants because they “had the requisite power to directly or indirectly control or influence the specific corporate policies which resulted in the unlawful acts and conduct” alleged by the sub-class. (FACC ¶ 449.) B. SAC In Count II, Aberdeen charges the Maytas Defendants, among others, with violating section 20(a) of the Exchange Act as controlling persons who had and exercised the power to influence and control the decision-making and actions of Satyam. (SAC ¶ 338.) Counts VI, VII, and VIII assert common law claims of fraud, negligence, and negligent misrepresentation against the Maytas Defendants for their alleged role in the fraud. (SAC ¶¶ 365-69, 372-76, 378-83.) C. Motions The AC Defendants and SA Defendants (together, “Director Defendants”) filed two motions to dismiss. One seeks dismissal of the FACC pursuant to the Supreme Court’s decision in Morrison. (Dkt. No. 266.) The other was filed contemporaneously and seeks dismissal under Federal Rules of Civil Procedure 12(b)(6) and 9(b) and the Private securities Litigation Reform Act of 1995 (“PSLRA”). (Dkt. No. 269.) SA Defendant Dham joined in the Director Defendants’ motions to dismiss, and also filed his own motion to dismiss. (Dkt. No. 264.) Maytas Infra and Maytas Properties filed two sets of virtually identical motions to dismiss the FACC and the SAC for lack of personal jurisdiction, for forum non conveniens, and pursuant to Federal Rules 12(b)(6) and 9(b), the PSLRA, and the Securities Litigation Uniform Standards Act (“SLUSA”). (Dkt. Nos. 279, 281, 283, 289, 291, 293.) Teja Raju and Rama Raju Jr. joined all six Maytas motions to dismiss. LEGAL STANDARD “In deciding a motion to dismiss, a court ordinarily accepts as true all well pleaded factual allegations and draws all reasonable inferences in the plaintiffs favor.” In re Lehman Bros. Sec. & ERISA Litig., 683 F.Supp.2d 294, 298 (S.D.N.Y.2010) (citation omitted). To survive a Rule 12(b)(6) motion to dismiss, a complaint must articulate sufficient factual allegations “to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact.)” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (citations omitted). A plaintiff must state “enough facts to state a claim to relief that is plausible on its face.” Id. at 570, 127 S.Ct. 1955. “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.” Ashcroft v. Iqbal, 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citation omitted). A court may “consider any written instrument attached to the complaint, statements or documents incorporated into the complaint by reference, legally required public disclosure documents filed with the SEC, and documents possessed by or known to the plaintiff and upon which it relied in bringing the suit.” Sgalambo v. McKenzie, 739 F.Supp.2d 453, 470 (S.D.N.Y.2010) (quoting ATSI Commc'ns v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir.2007)). Securities fraud claims are subject to the heightened pleading requirements of Rule 9(b) of the Federal Rules of Civil Procedure. Rule 9(b) requires a party to “state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.” Fed.R.Civ.P. 9(b). Although intent may be alleged generally, a plaintiff must still “allege facts that give rise to a strong inference of fraudulent intent.” Acito v. IMCERA Grp., Inc., 47 F.3d 47, 52 (2d Cir.1995) (citations omitted). A complaint alleging securities fraud will survive a motion to dismiss “only if a reasonable person would deem the inference of scienter cogent and at least as compelling as any opposing inference [of non-fraudulent intent] one could draw from the facts alleged.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 324, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007) (citations omitted). DISCUSSION I. Claims Against the Director Defendants A. Standing Article III of the Constitution requires a plaintiff to have standing before the plaintiff may maintain a lawsuit. To establish standing, a plaintiff must allege (1) personal injury, (2) that is fairly traceable to the defendant’s allegedly unlawful conduct, and (3) is likely to be redressed by the requested relief. Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984). In addition, a plaintiff seeking to represent a class must be a member of the class he purports to represent. See e.g., Bailey v. Patterson, 369 U.S. 31, 32-33, 82 S.Ct. 549, 7 L.Ed.2d 512 (1962) (citing McCabe v. Atchison, T. & S.F.R. Co., 235 U.S. 151, 162-63, 35 S.Ct. 69, 59 L.Ed. 169 (1914)); Nat’l Super Spuds, Inc. v. N.Y. Mercantile Exch., 660 F.2d 9, 17 (2d Cir.1981). “Because a plaintiff cannot claim a personal injury in connection with a security he did not purchase, he ‘lacks standing to sue on claims arising from ... offerings which he did not purchase.’ ” In re Wachovia Equity Sec. Litig., 753 F.Supp.2d 326, 368 (S.D.N.Y.2011) (quoting N.J. Carpenters Health Fund v. DLJ Mortg. Capital, Inc., No 08 Civ. 5653(PAC), 2010 WL 1473288, at *3 (S.D.N.Y. Mar. 29, 2010)); see In re Lehman Bros., 684 F.Supp.2d 485, 490 (S.D.N.Y.2010). The cardinal rule of section 10(b) standing is that a plaintiff seeking to assert such a claim must be either a purchaser dr seller of the securities at issue. Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 749, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975). The purpose of this rule is to “limit[ ] the class of plaintiffs to those who have at least dealt in the security to which the prospectus, representation, or omission relates.” Id. at 747, 95 S.Ct. 1917. Moreover, a plaintiff who asserts Securities Act claims must have purchased securities that are traceable to the allegedly misleading registration statement. See Barnes v. Osofsky, 373 F.2d 269, 273 (2d Cir.1967) (“[A]n action under § 11 may be maintained only by one who comes within a narrow class of persons, i.e. those who purchase securities that are the direct subject of the prospectus, and registration statement.”) (quotation marks and citation omitted). Section 3(a)(1) of the Exchange Act and section 2(1) of the Securities Act both define a “security” to include, among other things, “any note, stock, ... investment contract, ... any put, call, straddle, option, or privilege on any security[.]” 15 U.S.C. §§ 77b(a)(l), 78c(a)(10). Although the federal securities laws generally consider an option to purchase a security to be the equivalent of a security, see Caiola v. Citibank, N.A., N.Y., 295 F.3d 312, 327 (2d Cir.2002), employee stock options are acquired as part of a contract between employer and employee, and must be considered an “investment contract” in order to constitute a security. -The anti-fraud provisions of both the Securities Act and the Exchange Act require that any allegedly fraudulent statement must occur in connection with a “sale”, “offer to sell”, or “purchase” of a “security.” Dubin v. E.F. Hutton Grp. Inc., 695 F.Supp. 138, 142 (S.D.N.Y.1988). Accordingly, the Supreme Court has held that the Securities and Exchange Acts do not apply to pension plans to which employees do not contribute and in which employee participation is compulsory. See Int’l Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of Am. v. Daniel, 439 U.S. 551, 559, 99 S.Ct. 790, 58 L.Ed.2d 808 (1979). This is because such a pension plan does not require the employee to “give up a specific consideration in return for a separable financial interest with the characteristics of a security.” Id. (citations omitted). Inducements to continue employment-as opposed to inducements to accept employment-do not satisfy this test. See Fishoff v. Coty Inc., No. 09 Civ. 628(SAS), 2009 WL 1585769, at *6 (S.D.N.Y. June 8, 2009) (holding that a plaintiffs mere “continued employment is not a cognizable contribution” sufficient to constitute a security for purposes of securities fraud). Adams purports to assert Exchange Act claims on behalf of the subclass arising from the acquisition and/or exercise of options to purchase Satyam ordinary shares and -ADSs under each of the five employee stock option ■ plans as ■ well as Securities Act claims arising from the acquisition and/or exercise of options to purchase Satyam ordinary shares and ADSs under the RSU-Ordinary and RSU-ADS plans. According to the FACC, Adams acquired options under the ASOPADS and RSU-Ordinary plans, but exercised options to purchase Satyam securities under only the ASOP-ADS plan. Adams does not plead that he acquired any stock options as part of his acceptance of employment at Satyam, and stock option plan documents submitted to the Court by the Director Defendants show that he acquired options as incentive to continue his employment at the Company. Thus, Adams lacks standing to bring claims under the Securities Act or the Exchange Act based on the mere acquisition of options under any plan. Because Adams alleges that he purchased Satyam securities by exercising options pursuant to only one plan, the question of whether Adams has standing to represent purchasers of securities pursuant to the other four plans becomes one of personal injury. See Hoffman v. UBS-AG, 591 F.Supp.2d 522, 532 (S.D.N.Y.2008) (“If a party, such as Plaintiffs in this case, is not personally injured by the alleged action of a defendant then he is not entitled to come into court and litigate that action, regardless of whether the disposition of his case necessarily requires the same result as the case of another.”). Adams- appears to argue that because the various offering documents affiliated with the ASOP-Ordinary, RSU-Ordinary, and RSU-ADS plans were incorporated by reference into the allegedly misleading registration statements, he has standing to represent exercisers of all such options. (See Lead Pis.’ Mem. in Opp. to Dir. Defs.’ Mot. to Dismiss, June 2, 2011, 34-35 (“Lead Pis.’ Opp. Mem.”).) Furthermore, he argues that the dates on which he exercised his various ASOP-ADS options demonstrate that he must have acquired securities, pursuant to every annual report during the Class Period, which makes his injury the same as all purchasers of any securities during that period of time. (Id. at 35.) Several courts in this District have considered and rejected the argument that a purchaser of securities pursuant to one filing suffers the same injury as a different purchaser who acquires securities pursuant to another filing merely because the two offerings derive from or are incorporated into a common registration statement. This argument fails because enlarging the field of potential misstatements “does not thereby enlarge the field of possible plaintiffs beyond the ranks of those who purchased or acquired the securities at issue.” In re Wachovia Equity, 753 F.Supp.2d at 370 (citing In re Lehman Bros., 684 F.Supp.2d at 491) (emphasis added); see also In re Morgan Stanley Mortg. Pass-Through Certificates Litig., No. 09 Civ. 2137(LTS)(MHD), 2010 WL 3239430, at *5 n. 6 (S.D.N.Y. Aug. 17, 2010) (finding that plaintiff who purchased one type of certificate derived from the same shelf registration statements as other certificates lacks standing to represent purchasers of the other certificates); New Jersey Carpenters Health Fund v. NovaStar Mortg., Inc., No. 08 Civ. 5310(DAB), 2011 WL 1338195, at *6 (S.D.N.Y. Mar. 31, 2011) (finding plaintiff had standing to represent only purchasers of certificates from one of six offerings under the same registration statement). Ultimately, the issue boils down to the cardinal rule. Because Adams did not exercise options under the ASOP-Ordinary, RSU-ADS, or RSU-Ordinary plans, he does not have standing to represent class members who did. See Hoffman, 591 F.Supp.2d at 531 (“Plaintiffs lack standing for claims relating to funds in which they did not personally invest.”); In re Smith Barmy Transfer Agent Litig., 765 F.Supp.2d 391, 399 (S.D.N.Y.2011); King Cty., Wash. v. IKB Deutsche Industriebank AG, Nos. 09 Civ. 8387(SAS), 09 Civ. 8822(SAS), 2010 WL 2010943, at *2 (S.D.N.Y. May 18, 2010). There is, however, an exception to this rule. The ASOPB plan was attached to the same Form 20-F filing as the ASOP-ADS plan, and securities issued under both plans were subject to the same Form F-3 filing. The fact that the plans offer options to purchase different types of security is not enough to preclude Adams from representing participants in the ASOP-B plan, as the operative documents for both plans are identical. See In re WorldCom, Inc., Nos. 02 Civ. 3288(DLC), et al., 2004 WL 555697, at *7 (S.D.N.Y. Mar. 19, 2004). Accordingly, Adams has standing to represent sub-class members who exercised options under the ASOP-B and ASOP-ADS plans. Adams has no standing to represent purchasers of securities under either RSU plan, which are the only plans implicated in the Securities Act claims. The claims against the SA Defendants are therefore dismissed. B. Effects of Morrison i. Evolution of the transactional test The Director Defendants seek dismissal of MPERS’ claims and the sub-class’s claims pursuant to the Supreme Court’s decision in Morrison v. National Australia Bank, Limited, — U.S. —, 130 S.Ct. 2869, 177 L.Ed.2d 535 (2010), which clarified the distinction between domestic and foreign transactions to better define the territorial reach of section 10(b). In Morrison, the Supreme Court repudiated the Second Circuit’s “conduct” and “effects” tests, opting instead to announce a new bright line rule defining the reach of section 10(b). By choosing to “apply the presumption [of extraterritoriality] in all cases,” the Court held that section 10(b) applies only to “transactions in securities listed on domestic exchanges[ ] and domestic transactions in other securities[.]” Morrison, 130 S.Ct. at 2884. The Court went on to define the contours of this new transactional test. It noted that there exists a level of activities and conduct occurring within the United States that would not be sufficient to trigger section 10(b) liability. Id. (“[I]t is a rare case ... that lacks all contact with the territory of the United States[, and] the presumption against extraterritorial application would be a craven watchdog indeed if it retreated to its kennel whenever some domestic activity is involved in the case.”) (emphasis in original). The focus of the Exchange Act, the Supreme Court added, is on the purchases and sales of securities in the United States, and “not upon the place where the deception originated[.]” Id. Because Morrison dealt with securities traded only on foreign exchanges, the Supreme Court provided little guidance about how to determine whether a “purchase or sale is made in the United States.” Id. at 2886. The Exchange Act defines a “purchase” to “include any contract to buy, purchase, or otherwise acquire,” and it defines a sale to “include any contract to sell or otherwise dispose of.” 15 U.S.C. §§ 78c(a)(13)-(14). In the wake of Morrison, many courts in this District have struggled to determine what exactly makes, a transaction domestic. See, e.g., Valentini v. Citigroup, Inc., 837 F.Supp.2d 304 (S.D.N.Y.2011); In re UBS Sec. Litig., No. 07 Civ. 11225(RJS), 2011 WL 4059356 (S.D.N.Y. Sept. 13, 2011); S.E.C. v. Goldman Sachs & Co., 790 F.Supp.2d 147 (S.D.N.Y.2011); In re Vivendi Universal, S.A. Sec. Litig., 765 F.Supp.2d 512 (S.D.N.Y.2011); In re Royal Bank of Scot. Grp. PLC Sec. Litig., 765 F.Supp.2d 327 (S.D.N.Y.2011); Plumbers’ Union Local No. 12 Pension Fund v. Swiss Reins. Co., 753 F.Supp.2d 166 (S.D.N.Y.2010); In re Société Generale Sec. Litig., No. 08 Civ 2495(RMB), 2010 WL 3910286 (S.D.N.Y. Sept. 29, 2010). And, most recently, the Second Circuit decided its first post -Morrison case and held that “to sufficiently allege the existence of a ‘domestic transaction in other securities,’ plaintiffs must allege facts indicating that irrevocable liability was incurred or that title was transferred within the United States.” Absolute Activist Value Master Fund Ltd. v. Ficeto, 677 F.3d 60, 62 (2d Cir.2012). The Director Defendants have moved to dismiss under Morrison two categories of claims: (1) MPERS’ section 10(b) claims resulting allegedly from the purchase of Satyam ordinary shares on Indian exchanges, and (2) the sub-class’s Exchange Act and Securities Act claims related to the acquisition and/or exercise of. options to purchase Satyam ADSs and ordinary shares pursuant to the employee stock option plans. The Director Defendants do not seek dismissal under Morrison of the remaining Lead Plaintiffs’ Exchange Act claims because the FACC alleges that those plaintiffs purchased Satyam ADSs on the NYSE. (Dir. Defs. Mem. in Support of Mot. to Dismiss Pursuant to Morrison, Apr. 18, 2011, 1 n. 2 (“Defs.’ Morrison Mem.”).) ii. MPERS’ Claims MPERS argues principally that its purchases of foreign shares on foreign exchanges constitute domestic transactions within section 10(b)’s reach because the buy orders were placed from the United States and the injuries were suffered in the United States. (Lead Pis.’ Opp. Mem. at 59-64.) This argument is predicated on precisely the approach the Supreme Court rejected in Morrison. Cf. Morrison, 130 S.Ct. at 2884 (“[T]he focus of the Exchange Act is not upon the place where the deception originated.”); see In re Societe Generale, 2010 WL 3910286, at *6 (“By asking the Court to look to the location of ‘the act of placing a buy order,’ and to ... ‘the place of the wrong,’ Plaintiffs are asking the Court to apply the conduct test specifically rejected in Morrison.”) (citations omitted); Cornwell v. Credit Suisse Grp., 729 F.Supp.2d 620, 624 (S.D.N.Y.2010) (“[T]o carve out of the new rule [Plaintiffs’] purchase ... of securities on a foreign exchange because some acts that ultimately result in the execution of the transaction abroad take place in the United States amounts to nothing more than the reinstatement of the conduct test.”); In re UBS, 2011 WL 4059356, at *7 (“[T]here is nothing in the text of Morrison to suggest that the Court intended the location of an investor placing a buy order to be determinative of whether such a transaction is ‘domestic’ for purposes of § 10(b).”). That “Plaintiffs respectfully disagree with the district courts’ holdings” in Cornwell and In re Societe Generale, (Lead Pls.’ Opp. Mem. at 62), does not persuade this Court to do so. MPERS attempts to distinguish the facts in Morrison by pointing out that case dealt with “foreign-cubed” transactions that did not involve investors making investment decisions in the United States, as this case does. (Lead Pis.’ Opp. Mem. at 57-58.) This argument merely reprises the unsuccessful argument that this Court has already rejected. An investor’s location in the United States does not transform an otherwise foreign transaction into a domestic one. See In re Vivendi Universal, 765 F.Supp.2d at 532 (“[T]he Supreme Court [in Morrison ] clearly sought to bar claims based on purchases and sales of foreign securities on foreign exchanges, even though the purchasers were American.”). Lead Plaintiffs have failed to establish that MPERS’ off-exchange purchases of foreign stock constitutes a domestic transaction subject to section 10(b) liability, and the Director Defendants’ motion to dismiss MPERS’ claims is therefore granted. iii. Sub-class’s Claims The remaining sub-class claims are the Exchange Act claims related to the exercise of options under the ASOP-B and ASOP-ADS plans to purchase Satyam ordinary shares and Satyam ADSs, respectively. As the plaintiff, Adams bears the burden of alleging adequately that each type of transaction occurred in the United States. See Goldman Sachs, 790 F.Supp.2d at 159. Nowhere in the FACC does Adams allege that any of the relevant transactions took place in the United States. Regarding the exercise of options to purchase ordinary shares, Adams echoes the arguments asserted unsuccessfully by MPERS. (Lead Pis.’ Opp. Mem. at 66.) For the same reasons as articulated above, the Court dismisses the claims of sub-class members who exercised options to purchase ordinary shares under the ASOP-B plan. See supra Part. 2.A.ii. The exercise of options to purchase ADSs requires a more nuanced analysis under Morrison. To defeat Defendants’ motion, Adams must show that either irrevocable liability was incurred by the parties in the United States or that title to the ADSs was transferred in the United States. See Absolute Activist, 677 F.3d at 62. According to the Director Defendants, the stock option plan documents demonstrate that the exercise of options to purchase Satyam ADSs occurred in India and therefore fall outside the scope of section 10(b). (Defs.’ Morrison Mem. at 3-5.) In response, Adams argues that his ADS transactions are the same as Lead Plaintiffs’ purchases of ADSs on the NYSE, which the Director Defendants have not challenged under Morrison. (Lead Pls.’ Opp. Mem. at 66.) In reliance on Morrison’s first prong, Adams contends that “[Momson ] clearly provides that the fact that a security is listed on a U.S. exchange is the determining factor.” (Id. at 67 (citing Morrison, 130 S.Ct. at 2888).) Adams thus advocates for an interpretation of Morrison under which every purchase of a Satyam ADS is covered under section 10(b), regardless of where the transaction itself occurs, simply because Satyam ADSs are listed on the NYSE. This argument has been rejected by several courts in this District as incongruous with Morrison’s transactional test. See In re Royal Bank of Scotland, 765 F.Supp.2d at 336 (“The idea that a foreign company is subject to U.S. Securities laws everywhere it conducts foreign transactions merely because it has listed some securities in the United States is simply contrary to the spirit of Morrison.” (quotation marks omitted)); In re Vivendi Universal, 765 F.Supp.2d at 531 (finding there is “no indication that the Morrison majority read Section 10(b) as applying to securities that may be crosslisted ... where the purchase and sale does not arise from the domestic listing”); In re Alstom SA Sec. Litig., 741 F.Supp.2d 469, 472 (S.D.N.Y.2010) (“That the transactions themselves must occur on a domestic exchange to trigger application of § 10(b) reflects the most natural and elementary reading of Morrison.”). For instance, in Sgalambo v. McKenzie, the court dismissed claims based on the purchase of Canadian Superior common stock on the Toronto Stock exchange, even though Canadian Superior common stock was also listed on the NYSE. 739 F.Supp.2d 453, 487 (S.D.N.Y.2010). The same reasoning applies to the exercise of Adams’ options to purchase Satyam ADSs, as the relevant transaction is the actual exercise of Adams’ options to purchase ADSs, which occurred in India. According to the option exercise documents, Adams’ options were not deemed to be “exercised” until the Company received the Exercise Notice and payment in India. (Decl. of Evert J. Christensen in Support of Dir. Defs.’ Mot. to Dismiss Pursuant to Morrison, Ex. A, at 2 (“Christensen Morrison Decl.”) (“This option shall be deemed to be exercised upon receipt by SATYAM of such [Exercise] Notice accompanied by the Exercise Price and payment of any applicable withholding tax.”).) After that, and assuming the option exercise documents comply with the relevant law, title in Satyam securities is transferred upon completion of the option exercise, i.e. once the Company has received the Exercise Notice and accompanying payment. (Christensen Morrison Decl., Ex. A at 2 (“[T]he ADSs shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such ADSs.”).) Transfer of the ADSs occurs directly from Satyam in India to the exercising plan participant. (Christensen Morrison Decl., Ex. F, at 2 (“On receipt of the Exercise Notice from the Optionee, SATYAM shall take necessary steps as per the applicable provisions of law on the date of exercise for the allotment of the ADSs to the Optionee by the appropriate authority!.]”).) This series of steps demonstrates that Satyam incurs irrevocable liability and title is transferred in India. That Satyam ADSs were also listed on the NYSE is irrelevant because Adams acquired his ADSs directly from Satyam. Adams has alleged no facts to establish that the option exercise transactions occurred in the United States. He asserts in passing that he “has clearly pleaded that his transactions occurred in the United States,” and cites to Paragraph 344 in the FACC. Paragraph 344 in the FACC, however, does not include any facts about the location of the transactions at issue. (FACC ¶ 344.) Conclusory arguments not supported by any factual allegations in a complaint are insufficient to establish that the option exercise transactions were domestic. Accordingly, all of the sub-class’s remaining Exchange Act claims are dismissed. Adams has requested an opportunity to conduct additional discovery regarding when and where irrevocable liability was incurred and title to the ADSs was passed. (Letter dated March 26, 2012, at 3.) Adams appears to argue