Thorpe v. Walter Investment Management, Corp. (111 F. Supp. 3d 1336, 2015)

OMNIBUS ORDER

URSULA UNGARO, District Judge.

THIS CAUSE is before the Court upon Defendant H. Marc Helm’s Motion to Dismiss the Second Amended Class Action Complaint, D.E. 76, and Defendants Walter Investment Management, Corporation, Mark J. O’Brien, Denmar Dixon, Keith A. Anderson, Brian Corey and Charles E. Cauthen’s Motion to Dismiss the Second Amended Class Action Complaint, D.E. 77. On February 29, 2015, Plaintiffs Richard Thorpe and Darrel Weisheit filed their response, D.E. 79, and on February 19, 2015, the Defendants filed their reply, D.E. 80 & 81. Thus, the Motions are ripe for disposition.

THE COURT has considered the Motions and the pertinent portions of the record, and is otherwise fully advised in the premises. For the reasons stated below, Defendant H. Marc Helm’s Motion to Dismiss is GRANTED and Defendants Walter Investment Management, Corporation, Mark J. O’Brien, Denmar Dixon, Keith A. Anderson, Brian Corey and Charles E. Cauthen’s Motion to Dismiss is GRANTED IN PART AND DENIED IN PART.

BACKGROUND

This is a federal securities fraud class action brought against Walter Investment Management, Corp. (‘Walter Investment” or the “Company”) and several officers and board members of Walter Investment and its wholly-owned subsidiaries Green Tree Servicing LLC (“Green Tree”) and Reverse Mortgage Solutions, Inc. (“RMS”). Plaintiffs assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. Plaintiffs allege that Defendants made false or misleading statements or failed to disclose that: (1) the Company had lax and inadequate legal and regulatory compliance controls; (2) the Company’s business practices repeatedly violated consumer protection laws and thereby, jeopardized the Company’s revenues and profits; (3) the Company ignored repeated loan servicing errors in violation of applicable regulations; (4) the Company’s internal controls over financial reporting and servicing processes and procedures were not effective; (5) RMS’s financial statements were materially overstated and contained false and misleading statements; and (6) the Company overstated the value of the RMS acquisition. (Compl. ¶ 19.) Lead Plaintiff Richard Thorpe and Plaintiff Darrel Weisheit bring these claims on behalf of a putative class of persons who purchased Walter Investment securities between May 9, 2012 and August 11, 2014, both dates inclusive (the “Class Period”). (Compl. ¶1.)

Walter Investment is a loan servicer and loan originator focused on generating recurring, fee-based revenues from an asset-light platform, which includes less-than-prime loans, non-conforming loans and other credit challenged mortgage assets. (Compl. ¶ 2.) The six individual defendants (collectively, the “Individual Defendants”) either are or were senior officers of the Company or its wholly-owned subsidiaries, Green Tree or RMS, during the Class Period. The Individual Defendants are as follows: (1) Mark J. O’Brien, the Company’s Chairman of the Board of Directors and Chief Executive Officer; (2) Denmar J. Dixon, the Company’s Vice Chairman and Executive Vice President, member of the Company’s Audit Committee and Nominating and Corporate Governance Committee, and Chairman of the Compensation and Human Resources Committee; (3) Charles E. Cauthen, former Chief Operating Officer and Chief Financial Officer for the Company; (4) Keith A. Anderson, the Company’s Chief Operating Officer since August 2013 and Green Tree’s Chief Executive Officer and President since September 2011; (5) Brian Corey, Senior Vice President and Chief Compliance Officer for the Company and Senior Vice President, General Counsel and Secretary for Green Tree during the Class Period; and (6) H. Marc Helm, Co-Founder, President, Chief Operating Officer and Chief Executive Officer of RMS until December 2013. (Compl. ¶¶ 27-32.) •

I. The Alleged Misrepresentations

The alleged misrepresentations fall into two categories: (i) those that concern the Company’s financial statements, compliance with state and federal laws, internal controls over loan servicing protocols and procedures, and internal controls over loan operations; and (ii) those that concern the RMS acquisition and RMS’s financial condition.

A. Allegations Concerning the Company’s Financial Statements, Compliance & Internal Controls

With respect to the Company’s financial statements, compliance and internal controls, Plaintiffs allege that Defendants misrepresented and/or failed to disclose the following: (i) the Company had lax and inadequate legal and regulatory compliance controls; (ii) the Company was not in compliance with applicable legal and regulatory requirements; (iii) the Company’s business practices repeatedly violated consumer protection laws thereby jeopardizing the Company’s revenues and profits; (iv) the Company ignored repeated servicing errors in violation of .applicable regulations; and (v) the Company had inadequate internal controls over financial reporting and loan servicing operations which led to the Company’s issuance of materially false and misleading financial statements. (Compl. ¶¶ 76-78, 87, 100 & 112.) According to Plaintiffs, Defendants made the following misrepresentations about the Company’s financial statements, compliance, and internal controls:

• On May 9, 2012, August 9, 2012 and May 10, 2013, the Company filed Form 10-Q with the SEC, which reported the Company’s cash and cash equivalents as well as contained the dollar amounts of the Company’s residential íoan assets, loan receivables, revenue, expenses and net income. Form 10-Q also included signed certifications, pursuant to the Sarbanes-Oxley Act of 2002, by Defendants O’Brien and Cauthen, stating that the financial information contained in Form 10-Q was accurate and disclosed any material changes to the Company’s internal control over financial reporting. (Compl. ¶¶ 79, 82 & 107.)

• On May 9, 2012, Walter Investment issued its First Quarter 2012 Earnings Presentation to investors, which touted its “servicer rating affirmed or upgraded” and “culture of compliance — strong independent controls and processes for monitoring and managing compliance.” (Compl. ¶ 80.)

• On June 5, 2012, the Company issued its presentation at the Keefe, Bruyette & Woods Mortgage Finance Conference to investors, which touted the Company’s “active portfolio management — to improve servicing, regulatory compliance and credit performance,” “grounded in the long-term value proposition we offer clients for improved credit performance and regulatory compliance,” and “proven track record as a high-quality manager of whole loans.” (Compl. ¶ 81.)

• On August 9, 2012, Walter Investment issued its Second Quarter 2012 Earnings Presentation to investors, which touted the Company’s “differentiated servicing model: platform continues to deliver results that exceed clients’ expectations” and “culture of compliance: regulatory compliance capabilities remain at the ‘top of the list’ in terms of ability to win new business.” (Compl. ¶ 83.)

• In an earnings call held on August 9, 2012, Defendant O’Brien stated: “We have a solid platform with distinct advantages that afford our shareholders a great vehicle for which to participate and a significant growth opportunity within the mortgage servicing sector. We continue to execute for our clients by delivering strong portfolio performance in a regulatory-compliant matter.” (Compl. ¶ 84.)

• During the same earnings call, Defendant Cauthen stated, in relevant part: “[W]e’re very comfortable and confident that our business practices meet all the requirements out there. You can go through the [Consumer Financial Protection Bureau’s] examination manual or any of the other information you might read publicly about what best practices are in this business and we follow those very, very stridently.” (Compl. ¶ 85.)

• On August 9, 2012, Walter Investment issued a press release which quoted Defendant O’Brien as stating: ‘We continue to exceed our clients’ expectations for performance on serviced portfolios and are seeing operational improvements in our Loans & Residuals segment and our ARM business. Based on our continued track record of performance, as well as the significant amount of new business opportunity in the market and in our pipeline, we expect to see continued strong performance and results in the second half of this year.” (Compl. ¶ 86.)

• On September 11, 2012, Defendants presented at the 2012 Investor and Financial Analyst Day and the presentation included remarks by Defendants O’Brien, Dixon, Corey and Anderson. (Compl. ¶ 95.)

• During the presentation, Defendant Anderson made statements such as: (i) “[W]e put so much emphasis on our day-to-day activities of compliance;” (ii) “Things like charging fees to customers and handling customer complaints. We don’t take any of those things lightly. We always want to be well inside the boundaries. We don’t want to. push any of the boundaries on any of those activities;” and (iii) “So where there’s opportunities to make another $0.05 or $0.10 and some fee opportunities and we don’t see that it’s well-defined within state regulatory requirements, we’re going to pass on that. We’re going to leave that money aside because we’re more comfortable managing in a tighter box.” (Compl. ¶ 95.)

• During the presentation, Defendant Corey made statements such as: “We hold regularly scheduled meetings with senior management at least monthly where we review law changes and go through implementation to make sure that we remain on track. Next, we prepare policies and procedures, forms and employee alerts, and all of those are reviewed by the compliance department before they’re implemented. The organization conducts employee training, when appropriate, on law changes, and then we perform post-implementation audits and quality control.” (Compl. ¶ 96.)

• The slide presentation used by Defendants at the 2012 Investor and Finan- ■ cial Analyst Day represented, among other things, that the Company had the following:

• “Culture of Compliance: Strong independent controls , and processes for monitoring and managing compliance.”

• “Green Tree has the necessary independent control and processes to mitigate risk. This is monitored through: Legal and Compliance Departments; Internal Audit; Quality Control; Call Monitoring; Policy and Procedures.”

• “These controls and functions exist to mitigate regulatory, litigation, reputational and financial risks.”

• “Compliance — Risk Mitigation: To preserve client brand value, we aggressively maintain compliance with all federal and state requirements and laws. Quarterly audits are conducted to ensure our standards are met.”

• “All third-party agents (e.g. collection agencies and attorneys) are required to complete a rigorous due diligence process.”

• “Third-party score cards are used to ensure consistent performance, quality, and compliance, and are maintained over time.”

• “Risk Mitigation: Leverages Green Tree’s compliant and secure infrastructure, ensuring compliance risk is minimized; Customer Service and compliance-based collections approach to mitigate ‘headline risk;’ Collector and supervisor incentives ties to compliance requirements.”

• “GT ARM Customer-Centric Approach: Respect, Teamwork, Prudence, Responsiveness, Integrity, Fairness, Accountability, Dignity, Performance-Oriented.”

• “Green Tree’s demonstrated capabilities, both in Credit Performance and Compliance with Industry Regulations, positions us well for future growth.” (Compl. ¶¶ 97 & 98.)

• On November 8, 2012, Walter Investment issued its Third Quarter 2012 Earnings Presentation to investors, which touted the Company’s “differentiated servicing model: high level of compliance drives preferred partner status.” (Compl. ¶ 99.)

• In a March 19, 2013 fourth quarter earnings conference call, Defendant O’Brien stated, “[i]n the servicing business, we have added significant additional product capabilities and clearly added scale. We have achieved this while maintaining high standards of performance and compliance across the entire platform.” (Compl. ¶ 104.)

• In a March 26, 2018 2012 year-end earnings presentation to investors, Defendants represented that it “Reduced CDR [Cohort Default Rates] through improved servicing performance” and its “2013 Base Performance and Earnings Drivers” included “Servicing performance; CDR Reduction; Highly efficient transfers.” (Compl. ¶ 105.)

• In a May 9, 2013 first quarter 2013 earnings presentation and a June 12, 2013 Morgan Stanley Financials Conference, Defendants represented that the Company’s “[h]igh level of compliance drives preferred partner status.” (Compl. ¶¶ 106 & 108.)

• On August 8, 2013, the Company issued a press release announcing the Company’s second quarter 2013 financial results, which quoted Defendant O’Brien as stating, “[o]ur core Servicing segment continued to deliver solid growth in profits and exceptional operational performance from both existing and recently acquired portfolios of new business.” (Compl. ¶ 109.)

• On August 8, 2013, the Company issued its Second Quarter 2013 Earnings Presentation to investors, which touted the Company’s servicing business by stating: (i) “high level of compliance drives preferred partner status;” (ii) “[r]eceived servicer rating upgrades from Fitch Ratings, making Green Tree top rated specialty servicer;” (iii) “[s]ervicing segment achieved exceptional results while boarding 552,000 accounts, lowering GSE first-lien delinquencies by 126 bps and growing incentive and performance based fees 83% as compared to the prior year period;” and (iv) “[s]ervieing: Delinquency improvements driven by the business model improve profitability.” (Compl. ¶ 110.)

• On September 24, 2013, in a presentation at the Barclays Global Financial Services Conference, Defendants represented that the Company “[r]eceived servicer rating upgrades from Fitch Ratings, reinforcing Green Tree’s top rated specialty servicer status” and “[s]ervicing: Delinquency improvements driven by the business model improve profitability.” (Compl. ¶111.)

B. Allegations Concerning the RMS Acquisition and RMS Financial Condition

With respect to the RMS acquisition and RMS’s financial condition, Plaintiffs allege that Defendants misrepresented and/or failed to disclose that: (i) RMS’s financial statements were overstated by material amounts and contained false and misleading statements, (ii) there were material weaknesses in the Company’s internal controls, (iii) the Company overstated the value of the RMS acquisition, and (iv) RMS’s financials understated the Company’s servicing liabilities. (Compl. ¶¶ 94 & 103.) According to Plaintiffs, the Defendants made the following misrepresentations about the RMS acquisition and its financial condition:

• On August 6, 2012, the Defendants filed Form 8-K with the SEC, which explained the terms of the RMS acquisition. (Compl. ¶ 90.)

• In a September 4, 2012 presentation to investors, the Company stated that the RMS deal was “[i]mmediately accretive to Walter Investment stand-alone earnings.” (Compl. ¶ 68.)

• On September 4, 2012, Walter investment announced its acquisition of RMS and stated that the RMS “purchase price as multiple of 2012E EBITDA is at an attractive level of 2.6X,” RMS “string earnings and EBITDA generation,” and “strong earnings accretion and a solid return on invested capital well in excess of our cost of capital.” (Compl. ¶ 88.)

• On September 4, 2012, the Company issued a press release describing the RMS acquisition, which in relevant part stated: “The Company anticipates the acquisition of RMS will be significantly accretive to both earnings and cash flow, and estimates that, on a pro forma basis, the acquisition would have been accretive to 2012 core earnings per share by approximately 25% had the acquisition been completed at the beginning of this year. The $120.0 million transaction value represents a multiple of approximately 2.6x RMS’s expected 2012 EBITDA, or 4.1x its 2012 expected core earnings.” (Compl. ¶ 89.)

• On October 15, 2012, the Company filed a Form 8-K with the SEC and incorporated .by reference RMS’s financial statements for 2010 and 2011, as well as unaudited financial statements for the period ended June 30, 2012. (Compl. ¶ 91.)

• On November 7, 2012, the Company announced in a press release and in a Form 8-k that it had completed its acquisition of RMS for consideration of approximately $120 million. (Compl. ¶¶ 92 & 93.)

• On January 17, 2013, the Company filed an amended Form 8-K in order to report pro forma financial information relating to the RMS acquisition, which incorporated by reference the unaudited financial results for RMS as of September 30, 2012. (Compl. ¶¶ 101 & 102.)

II. The Alleged Corrective Disclosures

On March 18, 2013, the Company disclosed that its management “has identified a material weakness in our internal control over financial reporting” and “[a]s a result of this material weakness, management has concluded that, as of the end of the period covered by this Annual Report on Form 10-K, our internal control over financial reporting was not effective.” (Compl. ¶ 113.) The material weakness in internal controls related to the improper capitalization of third party costs paid to investment bankers with respect to the RMS acquisition. Id. Plaintiffs allege that the Company’s shares fell $8.61 per share to close on March 19, 2013 at $32.98 per share, a drop of over 20%. (Compl. ¶ 114.)

On June 6, 2013, the Company disclosed that it had failed to record certain estimated liabilities relating to RMS’s servicing errors and the Company reported that RMS’s financial statements and the Company’s 8-Ks incorporating those financial statements could no longer be relied upon because the error was material to the RMS balance sheets and income statements. (Compl. ¶ 115.) Plaintiffs do not allege that there was a subsequent drop in stock price relating to the Company’s disclosure on June 6, 2013.

On September 24, 2013, the Company restated RMS’s financial statements filed on Form 8K, which indicated that it materially understated liabilities with respect to servicing errors. (Compl. ¶ 116.) The liabilities relating to service errors were restated to show that as of June 30, 2012, liabilities increased by $41 million, as of December 31, 2011, liabilities increased by $35 million and as of December 31, 2010, liabilities increased by $20 million. Id. Plaintiffs do not allege that there was a subsequent drop in stock price relating to the Company’s disclosure on September 24, 2013.

On October 3, 2013, the Company announced the resignation of Charles Cauthen, who served as its Executive Vice President and Chief Financial Officer. (Compl. ¶ 117.) Plaintiffs do not allege that there was a subsequent drop in stock price after the announcement of Defendant Cauthen’s resignation.

On November 6, 2013, the Company filed Form 10-Q, which was signed by Defendants O’Brien and Cauthen, with the SEC, in which the Company announced pending investigations with the Department of Housing and Urban Development, the Federal Trade Commission (“FTC”) and the Consumer Financial Protection Bureau (“CFPB”). (Compl. ¶ 118.) The Company announced that on October 2, 2013, the Company received a subpoena from the HUD Office of the Inspector General requesting “documents and other information concerning (i) the curtailment of interest payments on HE CM loans serviced or sub-serviced by RMS and (ii) RMS’s contractual arrangements with a third party vendor for the management and disposition of real estate owned properties.” Id. Additionally, the Company announced that on October 7, 2013, the CFPB notified Green Tree that its staff was considering recommending action against Green Tree for violations of various federal consumer financial laws. Id. The Plaintiffs allege that the Company’s shares fell $2.51 per share to close at $33.41 on November 7, 2013. (Compl. ¶ 119.)

On February 27, 2014, the Company announced in a Form 8-K that agents from the FTC and CFPB were seeking authority to bring an enforcement action against Green Tree. (Compl. ¶ 120.) That same day, Defendant Dixon, in commenting on the FTC’s and CFPB’s investigation, explained that “[w]e were notified last week that they are now recommending an action and will seek approvals to proceed” and stated that “we are very proud of the servicing standards we maintain, our excellent servicer ratings and track record of compliance.” (Compl. ¶ 121.) Defendant O’Brien also stated that “[we] remain dedicated to serving the needs of our customers without sacrificing our strong track record of regulatory compliance” and “grew our servicing portfolio with a focus on maintaining our historically high level of compliance and performance.” Id. Plaintiffs allege that on February 27, 2014 shares of Walter Investment fell from $28.28 to $25J0. (Compl. ¶ 122.)

On August 8, 2014, Defendant Anderson resigned. (Compl. ¶ 123.) Plaintiffs do not allege that there was a subsequent drop in stock price after the announcement of Defendant Anderson’s resignation.

On August 11, 2014, the Company disclosed in a Form 10-Q filing that it is pursuing settlement discussions with the government agencies concerning Green Tree. (Compl. ¶ 124.) In the August 11, 2014 Form 10-Q, the Company disclosed that: (i) it had been informed by the FTC and CFPB staffs that “as part of a settlement, they will seek injunctive relief in relation to Green Tree Servicing’s business practices, civil money penalties and equitable monetary relief;” (ii) “the CFPB staff has authority to commence an action against Greet Tree Servicing and that the FTC staff has authority to negotiate and would need further FTC approval to file such an action;” and (iii) with respect to the RMS investigation, the Department of Justice had begun investigating possible violations of the False Claims Act. Id. Plaintiffs allege that as a result of this disclosure, on August 11, 2014, Walter securities opened at $28 and closed at $24.75, a drop of more than 11%. (Compl. ¶ 126.)

On August 12, 2014, Compass Point Research and Trading LLC issued a report regarding the Company, which noted that the Company’s recent stock price decline was caused in part by the Company’s August 11, 2014 disclosure concerning the developments with regulators. (Compl. ¶ 127.) Also, on August 12, 2014, analyst FBR Capital downgraded Walter from “Outperform” to “Market Perform” given the rising legal and regulatory costs. (Compl. ¶ 128.)

Finally, on November 6, 2014, the Company filed with the SEC on Form 10-Q its quarterly report for the period ending September 30, 2014, which disclosed that Green Tree was now under investigation by various state attorneys general and state regulators as well as the Office of the United States Trustee concerning its business practices, including its loan servicing practices. (Compl. ¶ 129.) Plaintiffs do not allege that there was a subsequent drop in stock price relating to the Company’s disclosure on November 6, 2014.

PROCEDURAL HISTORY

On December 23, 2014, the Court granted the Defendants’ Motions to Dismiss the First Amended Class Action Complaint and ordered Plaintiffs to file a Second Amended Complaint on or before January 6, 2015 in order to cure the deficiencies discussed in the Order, if possible. D.E. 71. On January 6, 2015, the Plaintiffs filed their Second Amended Complaint and this cause is before the Court for the second time on the Defendants’ Motions to Dismiss the Second Class Action Complaint.

On March 20, 2015, after the Motions to Dismiss were fully briefed, Plaintiffs requested the Court take judicial notice of (i) Walter Investment Management, Corp.’s (“Walter Investment”) February 26, 2015 press release, in which Walter Investment disclosed that it “agreed to a proposed stipulated order with the [Federal Trade Commission] and [Consumer Financial Protection Bureau] which is subject to approval by the FTC, CFPB and the court;” (ii) Excerpts from Walter Investment’s Form 10-K for the period ended December 31, 2014, in which Walter Investment disclosed that it agreed to settle the pending FTC/CFPB action against the Company on terms including fines, restitution and injunctive relief; and (iii) the qui tam Complaint filed in United States ex rel. Matthew McDonald, et al. v. Walter Investment Management Corp., et al., No. 8:03-cv-1705-T23-TGW (M.D.Fla. Dec. 4, 2013), which was recently unsealed and filed by RMS’s interim CFO who alleges, among other things, that RMS did not comply with certain FHA regulations applicable to the servicing of reverse mortgages and improperly sought interest payments from HUD. D.E. 84. The Court granted Plaintiffs’ request to take judicial notice of these documents, see D.E. 88, but agreed to take judicial notice of the qui tam Complaint for the limited purpose of “establishing] the fact of such litigation and related filings,” and not the truth of the allegations contained within. United States v. Jones, 29 F.3d 1549, 1553 (11th Cir.1994) (explaining that in order to be judicially noticed under Federal Rule of Evidence 201 “indisputability is a prerequisite”); F.D.I.C. v. Icard, Merrill, Cullis, Timm, Furen & Ginsburg, P.A., No. 8:11—cv-2831-T-33MAP, 2013 WL 1912838, at *2 (M.D.Fla. May 9, 2013) (“The Court takes judicial notice of the state court Amended Complaint and Answer ‘for the limited purpose of recognizing ... the subject matter of the litigation.’ The Court does not take judicial notice of accuracy of the factual allegations contained within the state court pleadings.”) (citation omitted). The Defendants were afforded an opportunity to respond to the judicially noticed documents, D.E. 85, and on April 1, 2015, the Defendants did so, D.E. 86 & 87.

Then on April 24, 2015, Plaintiffs again requested the Court take judicial notice of (i) Press Release, Consumer Financial Protection Bureau, CFPB and Federal Trade Commission Take Action Against Green Tree Servicing for Mistreating Borrowers Trying to Save Their Homes (Apr. 21, 2015); (ii) Press Release, Federal Trade Commission, National Mortgage Servicing Company Will Pay $63 Million to Settle FTC, CFPB Charges (Apr. 21, 2015); (in) Complaint, Federal Trade Commission v. Green Tree Servicing, LLC, Corp., No. 15-2064 (D.Minn. Apr. 21, 2015); and (iv) Consent Order, Federal Trade Commission v. Green Tree Servicing, LLC, Corp., No. 15-2064 (D.Minn. Apr. 23, 2015). D.E. 90. The Court granted the Plaintiffs’ request for judicial notice and allowed the Defendants an opportunity to file a response to the judicially noticed documents, D.E. 93, which were filed on May 1, 2015, D.E. 94 & 95.

LEGAL STANDARD

In order to state a claim for relief, Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the claim showing that the pleader is entitled to relief’ in order to “give the defendant fair notice of what the claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964, 167 L.Ed.2d 929 (2007).

On a Rule 12(b)(6) motion to dismiss the complaint for failure to state a claim upon which relief can be granted, the court takes the factual allegations in the complaint as true and construes them in the light most favorable to the plaintiff. Edwards v. Prime Inc., 602 F.3d 1276, 1291 (11th Cir.2010). The Court does not view each fact in isolation, however, but considers the complaint in its entirety. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007).

Conclusory allegations will not suffice to state a claim; rather, the complaint must allege sufficient facts to state a plausible claim to relief. See Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (“[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.”). This means that the factual content of the complaint must “allow[ ] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. “Dismissal for failure to state a claim is proper if the factual allegations are not ‘enough to raise a right to relief above the speculative level.’” Edwards, 602 F.3d at 1291 (quoting Rivell v. Private Health Care Sys., Inc., 520 F.3d 1308, 1309 (11th Cir.2008)).

Securities fraud claims are subject to Fed.R.Civ.P. 9(b)’s heightened pleading requirements. Rule 9(b) provides that “[i]n allegations of fraud or mistake, a party must state with particularity the circumstances constituting fraud or 'mistake” but “[mjalice, intent, knowledge, and other condition of mind of a person shall be averred generally.” The Eleventh Circuit has stated that Rule 9(b)’s fraud particularity requirement is met as long as the complaint sets forth “(1) precisely what documents or oral representations were made, and (2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) same, and (3) the content of such statements and the manner in which they misled the plaintiff, and (4) what the defendants obtained as a consequence of the fraud.” Ziemba v. Cascade Int’l, Inc., 256 F.3d 1194, 1202 (11th Cir.2001) (internal quotation marks and citation omitted).

In 1995, Congress passed the Private Securities Litigation Reform Act (“PSLRA”), codified at 15 U.S.C. § 78u-4(b), which made two notable changes to the pleading requirements for securities fraud actions. The Court must dismiss the action if either of these two pleading requirements are not met. Druskin v. Answerthink, Inc., 299 F.Supp.2d 1307, 1321 (S.D.Fla.2004). First, the PSLRA altered Rule 9(b)’s particularity requirement by mandating the following:

[T]he complaint shall specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, the complaint shall state with particularity all facts on which that belief is formed.

15 U.S.C. § 78u-4(b)(l)(B). Thus, the PSLRA requires greater specificity than Rule 9(b). Druskin, 299 F.Supp.2d at 1321.

Second, the PSLRA raised the standard for pleading scienter by making it clear that a plaintiff can no longer plead scienter generally. In order to properly allege scienter, the plaintiff must, for each alleged misrepresentation or omission, “state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” 15 U.S.C. § 78u-4(b)(2) (emphasis added). “Moreover, the complaint must allege facts supporting a strong inference of scienter for each defendant with respect to each violation.” Mizzaro v. Home Depot, Inc., 544 F.3d 1230, 1238 (11th Cir.2008) (emphasis added) (citing Phillips v. Scientific-Atlanta, Inc., 374 F.3d 1015, 1016 (11th Cir.2004)).

Courts may consider materials that are incorporated by reference into a complaint without converting a motion to dismiss to a motion for summary judgment if the document is (1) central to plaintiffs claim and (2) undisputed. Day v. Taylor, 400 F.3d 1272, 1276 (11th Cir.2005) (holding district court did not err by considering a contract central to the dispute without converting the motion to a motion for summary judgment); see also Harris v. Ivax Corp., 182 F.3d 799, 802 n. 2 (11th Cir.1999) (recognizing the incorporation by reference doctrine in a securities case). Additionally, the Eleventh Circuit has expressly held that a court may judicially notice relevant documents legally required by, and publicly filed with, the Securities and Exchange Commission (“SEC”)! See Bryant v. Avar do Brands, Inc., 187 F.3d 1271, 1276-81 (11th Cir.1999). As the Eleventh Circuit has stated, the “usual rules for considering 12(b)(6) motions are thus bent to permit consideration of an allegedly fraudulent statement in context.” Harris, 182 F.3d at 802 n. 2.

DISCUSSION

Plaintiffs allege violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Section 10(b) states:

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange — (b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, ... any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe as necessary or appropriate in the public interest or for the protection of investors.

15 U.S.C. § 78j(b) (2012). '

Rule 10b-5 provides:

It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange,

(a) To employ any device, scheme, or artifice to defraud,

(b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or

(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.

17 C.F.R. § 240.10b-5 (2012).

In order to state a claim under Section 10(b) and Rule 10b-5, a plaintiff must allege the following: “(1) a material misrepresentation or omission by the defendant; (2) scienter; (3) a connection between the misrepresentation or omission and the purchase or sale of a security; (4) reliance upon the misrepresentation or omission; (5) economic loss; and (6) loss causation.” Amgen Inc. v. Conn. Ret. Plans & Trust Funds, — U.S.-, 133 5.Ct. 1184, 1192, 185 L.Ed.2d 308 (2013) (quoting Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 131 S.Ct. 1309, 1317, 179 L.Ed.2d 398 (2011) (internal quotation marks omitted)).

Defendants Walter Investment, O’Brien, Dixon, Anderson, Corey and Cauthen argue that the Second Amended Complaint should be dismissed because Plaintiffs failed to cure the defects identified by the Court in its December 23, 2014 Order dismissing the First Amended Complaint. D.E. 77. Similarly, Defendant Helm argues that the Second Amended Complaint should be dismissed because he is mentioned in 10 out of the 229 numbered paragraphs and none of those paragraphs contain any facts supporting the fraud-based claims asserted against him. D.E. 76. The Court will now examine whether the Plaintiffs have sufficiently alleged claims under Section 10(b) and Rule 10b-5 in their Second Amended Complaint.

I. Material Misrepresentations

Defendants make several arguments as to whether Plaintiffs have adequately alleged a material misrepresentation. Those arguments are as follows: (i) Defendants Anderson and Corey cannot be held liable under a group pleading theory for any statements made by the Company before they became officers in August 2013; (ii) the Individual Defendants cannot be held liable for RMS’s financial statements because they were not the makers of the statements contained therein; (iii) Plaintiffs improperly rely on immaterial statements; and (iv) statements regarding Walter Investment’s financial performance are forward-looking statements protected by the PSLRA’s safe-harbor provision. In response, Plaintiffs contend that the Defendants may be held liable for the misstatements contained in the RMS financial statements and that Defendants Anderson and Corey can be held liable for statements made before they became officers, but did not rebut the Defendants’ remaining arguments. Additionally, Plaintiffs concede that the allegations contained in paragraphs 68, 81, 83, 86, 88, 89, 90, 92, 93, and 109 of the Second Amended Complaint are inactionable. D.E. 79 at 22 n. 12. In the December 23, 2014 Order, the Court found that these allegations are inactionable and therefore, in analyzing the Defendants’ arguments, the Court will only address the 20 alleged material misrepresentations found at paragraphs 79, 80, 82, 84, 85, 91, 95-99, 101, 102, 104-108, 110 & 111.

A. Can Defendants Anderson and Corey be held liable Under a Group Pleading Theory for statements Attributed to the Company prior to August 2013?

Defendants Anderson and Corey argue that prior to August 2013 they were not officers of Walter Investment and as a result, they cannot be held liable under a group pleading theory for statements made by Walter Investment prior to August 2013. The group pleading doctrine “can be broadly characterized as a presumption of group responsibility for statements and omissions in order to satisfy the particularity requirements for pleading fraud under Federal Rule of Civil Procedure 9(b).” Phillips, 374 F.3d at 1018. As the Court noted in its previous Order, the Eleventh Circuit has declined to address whether the group pleading doctrine remains viable after the PSLRA, see Phillips, 374 F.3d at 1019, but this Court as well as other courts in the Southern District of Florida “have permitted plaintiffs to attribute allegedly false statements to defendants via group pleading so long as plaintiffs also make the specific factual allegation that [the defendant], due to his high ranking position and direct involvement in the everyday business of the Company, was directly involved in controlling the content of the statements at issue.” Murdeshwar v. Search Media Holdings Ltd., No. 11-Civ-20549, 2011 WL 7704347, at *12 (S.D.Fla. Aug. 8, 2011) (internal quotation marks and citation omitted).

Assuming the group pleading doctrine is viable, it is inapplicable to Defendants Anderson and Corey for any misrepresentations made by the Company prior to August 2013. The Second Amended Complaint alleges and the stipulated facts found in the Joint Planning and Scheduling Report establish that Defendant Anderson has served as the Company’s Chief Operating Officer since August 2013 and Defendant Corey was appointed Senior Vice President and Chief Compliance Officer for the Company in August 2013. Because Plaintiffs have not alleged that Defendants Anderson and Corey held high-ranking positions prior to August 2013, these Defendants cannot be held liable under the group pleading doctrine for statements made by the Company prior to August 2013, i.e., the statements found in paragraphs 79, 80, 82, 91, 97, 99, 101-102, & 107.

B. Are the Individual Defendants Makers of the Alleged Misrepresentations Contained in RMS’s Financial Statements?

In Janus Capital Group, Inc. v. First Derivative Traders, 564 U.S. 135, 131 S.Ct. 2296, 2302, 180 L.Ed.2d 166 (2011), the Supreme Court of the United States held that only the maker of a misrepresentation may be held liable and defined the maker of a statement as a “person or entity with ultimate authority over the statement, including its content and whether and how to communicate it.” Additionally, “attribution within a statement or implicit from surrounding circumstances is strong evidence that a statement was made by — and only by — the party to whom it is attributed.” Id. However, “one who prepares or publishes a statement on behalf of another is not its maker” nor is the person “who provides the false or misleading information that another person then puts into the statement” a maker. Id. 2302-04.

In the December 23, 2014 Order, the Court found that there were sufficient allegations in the First Amended Complaint to show that Defendant Helm was the maker of RMS’s financial statements. Based on the Court’s review of the Second Amended Complaint, this finding remains unchanged. In the Second Amended Complaint, Plaintiffs allege that: (i) “Helm was RMS’s Chief Executive, President, Chief Operating Officer and co-founder;” (ii) “Helm ran RMS as a ‘hands-on’ CEO, oversaw RMS’s operations and finances, and made the materially false and misleading statements;” (iii) “Helm also was involved in deciding which disclosures would be made by RMS;” and (iv) “Helm was responsible for the RMS financial statements that were included in the Company’s Form 8-K filing ..., which were materially inaccurate and necessitated a restatement.” (Compl. ¶¶ 194 & 196.) At this stage in the litigation, the Court must accept the allegations contained in the Second Amended Complaint as true and therefore, the Court finds that Plaintiffs have sufficiently pled that Defendant Helm was the maker of the statements found in RMS’s financial statements. As a result, Defendant Helm is legally responsible for statements contained in RMS’s financial statements.

Next, Defendants O’Brien, Dixon, Anderson, Corey and Cauthen (the “Walter Individual Defendants”) argue that they cannot be held liable for any misrepresentations contained in RMS’s financial statements. The Walter Individual Defendants raised this argument in their Motion to Dismiss the First Amended Complaint, and the Court agreed that they could not be held liable for RMS’s financial statements because Plaintiffs failed to allege that they had any control over the creation of RMS’s financial statements or allege with particularity that these Defendants vouched for the financial statements or confirmed their accuracy. D.E. 71 at 20. Plaintiffs argue that they have sufficiently cured this defect by alleging that in an October 2012 8-K, Walter Investment stated:

The following unaudited pro forma condensed combined financial information is based on the historical financial information of Walter Investment Management Corp., or Walter Investment or the Company, GTCS Holdings, LLC, or Green Tree, and Reverse Mortgage Solutions, Inc. and its subsidiaries, or RMS, and has been prepared to reflect the proposed acquisition of RMS by a wholly-owned subsidiary of Walter Investment, or thé Acquisition, and the related financing transactions, as well as the contemplated equity and convertible debt raise, collectively, the Transactions. The pro forma data in the unaudited pro forma condensed combined balance sheet as of June 30, 2012 assume that the proposed Transactions had occurred on June 30, 2012.

(Compl. ¶ 91.)

However, this allegation is insufficient to show that the Walter Individual Defendants had any control over RMS’s financial statements or vouched for their accuracy. And as the Walter Individual Defendants correctly point out, several other statements in the October 2012 8-K show that they did not vouch for the accuracy of RMS’s financial statements. Specifically, in the October 2012 8-K Walter Investment stated:

The unaudited pro forma condensed combined financial information is presented for informational purposes only and is not intended to reflect the results of operations or the financial position of the combined company that would have resulted had the proposed Acquisition of RMS, the acquisition of Green Tree and the offerings been effective during the periods presented or the results that may be obtained by the combined company in the future ... Future results may vary significantly from the results reflected in the unaudited pro forma condensed combined financial information ... At this time, Walter Investment has not performed a detailed valuation to determine the fair value of RMS’s assets and liabilities and accordingly, the unaudited pro forma condensed combined financial information was developed using a preliminary allocation of the estimated purchase price based on assumptions and estimates which are subject to changes that may be material. Additionally, Walter Investment has not yet performed all of the due diligence necessary to identify additional items that could significantly impact the purchase price allocation or the assumptions and adjustments made in preparation of this unaudited pro forma condensed combined financial information.

D.E. 81-1 at 142 & 147.

Plaintiffs concede that the Walter Individual Defendants “were not responsible for RMS’s financial statements standing alone” but nevertheless argue that they can be held liable for any misrepresentations in those statements because “they were responsible for, and had control over, the combined statements that the investing public later learned were inaccurate.” D.E. 79 at 23. Under Plaintiffs’ theory, Section 10(b) and Rule 10b-5 liability would attach any time a defendant culled together and disseminated information to the public that turned out to be false. However, based on Janus, these actions are insufficient to support a finding that a defendant is the maker of the alleged misrepresentation. Because Plaintiffs have failed to allege that the Walter Individual Defendants were the makers of RMS’s financial statements, Plaintiffs Section 10(b) and Rule 10(b)(5) claims are dismissed against Defendants Walter Investment, O’Brien, Dixon, Anderson, Corey and Cauthen to the extent they are based on statements contained in RMS’s financial statements.

C. Are the alleged misrepresentations material?

During a September 11, 2012 conference call, Defendant Helm stated: “we take a very aggressive reserve upfront on every loan we originated at the premium to have for those losses and yet we model that every month and update that reserve every month.” (Compl. ¶ 195.) Defendant Helm argues that this statement about RMS’s reserves for potential losses is immaterial. D.E, 76 at 18. The Court need not address whether the statement in paragraph 195 is material because Plaintiffs have not alleged that Defendant Helm’s statement about RMS’s reserves for potential losses is misleading or linked it to the alleged misrepresentations contained in RMS’s financial statements. As a result, the Court finds that paragraph 195 is inactionable.

Additionally, Defendant Helm argues that Plaintiffs continue to rely on immaterial statements such as those found in paragraphs 88 and 89 of the Second Amended Complaint. D.E. 76 at 18. The Court has already ruled in its December 23, 2014 Order and above that paragraphs 88 and 89 are inactionable and therefore, the Court need not address the viability of these statements again. However, the Court finds that there are other alleged misstatements in the Second Amended Complaint that are not material.

“The test for materiality in the securities fraud context is ‘whether a reasonable man would attach importance to the fact misrepresented or omitted in determining his course of action.’ ” S.E.C. v. Merch. Capital, LLC, 483 F.3d 747, 766 (11th Cir.2007) (quoting S.E.C. v. Carriba Air, 681 F.2d 1318, 1323 (11th Cir.1982)). Materiality is an objective inquiry involving the significance of an omitted or misrepresented fact to a reasonable investor. S.E.C. v. Morgan Keegan & Co., 678 F.3d 1233, 1245 (11th Cir.2012) (citing TSC Indus., Inc. v. Northway, Inc., 426 U.S. 438, 445, 96 S.Ct. 2126, 48 L.Ed.2d 757 (1976)). Furthermore, the materiality test “requires delicate assessments of the inferences a reasonable [investor] would draw from a given set of facts” and “these assessments are peculiarly ones for the trier of fact.” Id. at 1245-46 (quoting TSC Indus., Inc., 426 U.S. at 450, 96 S.Ct. 2126 (internal quotation marks omitted)).

A statement that is vague, generalized, non-verifiable, or mere corporate puffery is immaterial because a reasonable investor would not make a decision based on such a statement. See Mogensen v. Body Cent. Corp., 15 F.Supp.3d 1191, 1211 (M.D.Fla.2014) (finding that corporate puffery and generalized, non-verifiable, vaguely optimistic statements are immaterial); In re Royal Caribbean Cruises Ltd. Sec. Litig., No. 1:11-22855-CIV, 2013 WL 3295951, at *12 (S.D.FIa. Apr. 19, 2013) (same). As a result, such statements are inactionable as a matter of law and cannot provide a basis for which to maintain a Section 10(b) claim or Rule 10b-5 claim. See, e.g., Philadelphia Fin. Mgmt. of San Francisco, LLC v. DJSP Enters., Inc., 572 FedAppx. 713, 716 (11th Cir.2014) (finding that statements about the “rigor” of defendant’s processes, the “efficiency” and “accuracy” of its operations and its “effective” staff training were not material because the statements did not assert specific and verifiable facts); Cutsforth v. Renschler, 235 F.Supp.2d 1216, 1238-39 (M.D.Fla. 2002) (finding that statements by a company that an acquisition “continues” the company’s “dynamic growth” and “adds enhanced value” are inactionable puffery).

The Court finds that the following statements cannot form the basis of Plaintiffs’ Section 10(b) and Rule 10b-5 claims against any of the Defendants because they are too vague to support a viable claim:

(i) On May 9, 2012, Walter Investment issued its First Quarter 2012 Earnings Presentation to investors, which touted its “servicer rating affirmed or upgraded” and “culture of compliance — strong independent controls and processes for monitoring and managing compliance.” (Compi. ¶ 80.)

(ii) In an earnings call held on August 9, 2012, Defendant O’Brien stated: ‘We have a solid platform with distinct advantages that afford our shareholders a great vehicle for which to participate and a significant growth opportunity within the mortgage servicing sector. We continue to execute for our clients by delivering strong portfolio performance in a regulatory-compliant matter.” (Compi. ¶ 84.)

(iii) On November 8, 2012, Walter Investment issued its Third Quarter 2012 Earnings Presentation to investors, which touted the Company’s “differentiated servicing model: high level of compliance drives preferred partner status.” (Compi. ¶ 99.)

(v) In a May 9, 2013 first quarter 2013 Earnings Presentation and at a June 12, 2013 Morgan Stanley Financials Conference, Defendants represented that the Company’s “[h]igh level of compliance drives preferred partner status.” (Compl. ¶¶ 106 & 108.)

(vi) On August 8, 2013, the Company issued its Second Quarter 2013 Earnings Presentation to investors, which touted the Company’s servicing business by stating that a “high level of compliance drives preferred partner status” and “[r]eceived servicer rating upgrades from Fitch Ratings, making Green Tree top rated specialty servicer.” (Compl. ¶ 110.)

D. Are statements regarding Walter Financial’s performance forward-looking statements subject to the PSLRA’s safe-harbor provision?

According to the PSLRA, the term “forward-looking statement” means:

(A) a statement containing a projection of revenues, income (including income loss), earnings (including earnings loss) per share, capital expenditures, dividends, capital structure, or other financial items;

(B) a statement of the plans and objectives of management for future operations, including plans or objectives relating to the products or services of the issuer;

(C) a statement of future economic performance, including any such statement contained in a discussion and analysis of financial condition by the management or in the results of operations included pursuant to the rules and regulations of the Commission;

(D) any statement of the assumptions underlying or relating to any statement described in subparagraph (A), (B), or (C);

(E) any report issued by an outside reviewer retained by an issuer, to the extent that the report assesses a forward-looking statement made by the issuer; or

(F)a statement containing a projection or estimate of such other items as may be specified by rule or regulation of the Commission.

15 U.S.C. § 78u-5(i)(l).

Defendant Helm argues that statements relating to the benefits of the RMS acquisition found at paragraphs 68, 88 and 89 are forward-looking and thus, protected by the PSLRA’s safe-harbor provision. D.E. 76 at 19. Plaintiffs concede that the alleged misstatements concerning the benefits of the RMS acquisition are inactionable. See supra p. 1353. Therefore, the Court need not address whether these statements are protected by the PSLRA’s safe-harbor provisions.

Defendant Helm further argues that the alleged misstatements included in Walter Investment’s SEC filings, Compl. ¶¶ 79, 82, 90-92, 101, and 107, are protected by the PSLRA’s safe-harbor provision. D.E. 76 at 19-20. Again, Plaintiffs concede that paragraphs 90 and 92 are inactionable; therefore, the Court will not address whether the statements contained in those paragraphs are forward-looking statements. See supra p. 1353. As for paragraphs 79, 82 & 107, the Court found in its December 23, 2014 Order that those paragraphs do not contain forward-looking statements. Rather, the statements focus on set financial figures, such as revenue and net income, as of specific time periods. And the statements in paragraphs 91 and 101 refer to documents that may contain forward-looking statements but are not themselves forward-looking. Therefore, the Court finds that the statements contained in paragraphs 79, 82, 91, 101, and 107 of the Second Amended Complaint are not protected by the PSLRA’s safe-harbor provision.

II. Scienter

The Supreme Court has defined the level of scienter necessary to support a securities fraud claim as a “mental state embracing intent to deceive, manipulate, or defraud.” Ernst & Ernst v. Hochfelder, 425 U.S. 185, 194 n. 12, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976). In order to adequately plead scienter in the Eleventh Circuit, a plaintiff must allege facts creating a “strong inference” that the defendant acted purposefully or with “severe recklessness.” Thompson v. RelationServe Media, Inc., 610 F.3d 628, 634 (11th Cir.2010); Ziemba, 256 F.3d at 1202. A “strong inference” is one that is “cogent” and “at least as compelling as any opposing inference of nonfraudulent intent.” Tellabs, Inc., 551 U.S. at 314, 127 S.Ct. 2499. And severe recklessness is “limited to those highly unreasonable omissions or misrepresentations that involve not merely simple or even inexcusable negligence, but an extreme departure from the standards of ordinary care, and that present a danger of misleading buyers or sellers which is either known to the defendant or is so obvious that the defendant must have been aware of it.” Ziemba, 256 F.3d at 1202 (internal quotation marks and citation omitted).

Stated differently, in order to sufficiently allege scienter, a plaintiff must allege facts from which a reasonable person would infer that it is at least as likely as not that the individual high-ranking defendants either orchestrated the alleged fraud (and thus always knew about it), learned about the alleged fraud, or were otherwise severely reckless in not learning of the alleged fraud when they made the purportedly false or misleading statements. See Mizzaro, 544 F.3d at 1247. See also Brophy v. Jiangbo Pharm., Inc., 781 F.3d 1296, 1302 (11th Cir.2015) (“Accordingly, [a] complaint 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 one could draw from the facts alleged:... Although we draw any reasonable inferences available on the face of the complaint in the investors’ favor, we also must look to plausible, non-culpable explanations for the defendant’s conduct in evaluating an inference of scienter.”) (internal quotation marks and citation omitted). The Court must not scrutinize each of Plaintiffs’ allegations in isolation, but rather assess all of the allegations holistically. Tellabs, 551 U.S. at 326, 127 S.Ct: 2499.

Finally, the “complaint must allege facts supporting a strong inference of scienter for each defendant with respect to each violation.” Mizzaro, 544 F.3d at 1238. Thus, the group pleading doctrine does not apply to the PSLRA’s scienter requirements. In re Sunbeam Sec. Litig., 89 F.Supp.2d 1326, 1341 (SD.Fla.1999) (holding that the group pleading doctrine survives the PSLRA as to Rule 9(b)’s particularity requirements, but does not apply to the PSLRA’s scienter requirements); Druskin, 299 F.Supp.2d at 1322 (same).

As a threshold matter, the Court notes that the Second Amended Complaint includes scienter allegations that improperly group the Defendants as “Individual Defendants” or “Defendants” instead of clearly distinguishing how each defendant acted purposefully or with severe recklessness. See, e.g., Compl. ¶¶ 132 & 149. As the Court made clear in its December 23, 2014 Order, this is insufficient under Rule 9(b) and the PSLRA, which requires Plaintiffs to allege what each Defendant knew, how the Defendant knew that information and when each Defendant knew or should have known that information. See City of St. Clair Shores Gen. Emps. Ret. Sys. v. Lender Processing Servs., Inc., No. 3:10-cv-1073-J-32JBT, 2012 WL 1080953, at *4 (M.D.Fla. Mar. 20, 2012) (dismissing complaint without prejudice because plaintiff failed to allege scienter with respect to each defendant); Durham v. Whitney Info. Network, Inc., No. 06-CY-00687, 2009 WL 3783375, at *17 (M.D.Fla. Nov. 10, 2009) (“Rule 9(b) does not allow a complaint to merely lump multiple defendants together but require[s] plaintiffs to differentiate their allegations when suing more than one defendant ... and inform each defendant separately of the allegations surrounding his alleged participation in the fraud.”) (internal quotation marks and citation omitted). Therefore, to the extent allegations supporting scienter are not attributed to a specific Defendant, those allegations will be disregarded in the Court’s analysis on scienter. Additionally, to the extent that Plaintiffs rely on eonclusory allegations without any supporting factual allegations, those allegations are insufficient to support a finding of scienter and they too will be disregarded.

The Court will now address whether the Plaintiffs have sufficiently alleged scienter for each Defendant.

A. Defendant Helm

Defendant Helm stands accused of overstating RMS’s financial performance in its financial statements and failing to disclose material weaknesses in RMS’s internal controls in Walter Investment’s public filings, press releases, announcements and other communications during the Class Period. Plaintiffs maintain that the following facts give rise to a strong inference that Defendant Helm acted with scienter: (i) his role as an officer of RMS; (ii) his receipt of 156,071 Walter Investment shares in the RMS acquisition; (iii) RMS was a core businesses of Walter Investment; (iv) Helm was responsible for conducting due diligence on RMS’s financial statements; (v) Helm’s resignation; (vi) the size of the restatement of RMS’s financial statements; (vii) the alleged misrepresentations about the value of the RMS acquisition; and (viii) Helm’s financial motivation to keep Walter Investment’s stock artificially inflated. Defendant Helm disagrees. D.E. 76 at 5-13.

While the Court agrees that scienter cannot be inferred merely from a defendant’s position, Durgin v. Mon, 415 Fed.Appx. 161, 165 (11th Cir.2011) (finding that defendants’ positions in the company was not evidence that defendants knew of the alleged fraud and therefore, could not support a finding of scienter), the Second Amended Complaint goes further than relying on Defendant Helm’s position. Specifically, the scienter allegations in respect of Defendant Helm include the following:

• Knowledge: Defendant Helm participated in the fraudulent scheme by virtue of his receipt of information reflecting the true facts of RMS and his control over, receipt of or modification of RMS’s allegedly materially misleading misstatements made him privy to confidential proprietary information concerning RMS. In addition, Helm’s knowledge included awareness of the existence of pervasive regulatory compliance issues at RMS, accounting issues, including the understatement of servicing liabilities, and material weaknesses which resulted in materially inaccurate reported financial results. Helm knew or recklessly d