Full opinion text
OPINION AND ORDER CONBOY, District Judge: I. BACKGROUND Plaintiffs, seventy in all, have brought this action against the twenty-nine named defendants, claiming that their investment in defendant Arizona World Nurseries Limited Partnership (“AWNLP”) was induced by the assertedly misleading Private Placement Memorandum (the “Memorandum” or “Offering Memorandum”), appended to which were the allegedly misleading Tax Opinion Letter and Financial Projections and Compilation Reports (the “Financial Projections”), which documents were prepared by some or all of the defendants. Plaintiffs have alleged violations of the Federal Securities laws, including Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder, 17 C.F.R. 240.10b-5, Sections 12(2) and 17(a) of the Securities Act of 1933 (“Securities Act”), the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961 et seq., and claims of common law fraud, negligence, and breach of fiduciary responsibility, and seek injunctive as well as declaratory relief in addition to the imposition of a constructive trust. All of the defendants have moved to dismiss the Consolidated Complaint pursuant to Rules 9(b) and 12(b)(6) of the Federal Rules of Civil Procedure. A. PROCEDURAL HISTORY The procedural history of this litigation is long and complex. The action entitled Friedman, et al. v. Arizona World Nurseries Limited Partnership, et al., 86 Civ. 9834(EW) was commenced on or about December 24, 1986 on behalf of 24 plaintiffs. In lieu of responding to various motions to dismiss, plaintiffs in Friedman filed an amended complaint on or about May 24, 1987, adding new plaintiffs and defendants as well as its equitable claims for relief. Various defendants renewed their motions to dismiss. At oral argument before the late Honorable Edward Weinfeld, to whom this matter was assigned prior to his death, plaintiffs’ application for leave to file another amended complaint was granted. A Second Amended Complaint, on behalf of fifty-five plaintiffs, was served on or about October 1, 1987, adding another defendant and furnishing additional detail regarding the plaintiffs’ claims. On or about October 8, 1987, another action was filed in this Court entitled Schumate, et al. v. Arizona World Nurseries Limited Partnership, et al., 87 Civ. 7237(EW), the complaint of which, with the exception of the 15 new plaintiffs, was identical to the Second Amended Complaint in the Friedman action. On November 13, 1987, plaintiffs in Schumate amended their complaint as of right to add still more parties and to amend various allegations regarding the plaintiffs’ discovery of the alleged fraud. On January 12, 1988, after Judge Weinfeld had granted a motion to consolidate, the Consolidated Complaint, upon which the defendants’ pending motions are directed, was filed. As stated above, the Consolidated Complaint was filed on behalf of seventy plaintiffs and added still more details to the allegations in the original complaint. In addition to these actions, four other actions were filed with complaints substantially similar to the Consolidated Complaint herein, with the exception of the naming of additional plaintiffs. Frost, et al. v. Arizona World Nurseries Limited Partnership, et al., 88 Civ. 2212(KC), LaCorte, et al. v. Arizona World Nurseries Limited Partnership, et al., 88 Civ. 6306(KC), Mills, et al. v. Arizona World Nurseries Limited Partnership, et al., 88 Civ. 8795(KC), and Clark v. Arizona World Nurseries Limited Partnership, et al., 89 Civ. 5194(KC). The parties in each of these actions have stipulated that our decision with respect to the Friedman Consolidated Complaint shall be binding upon them. B. THE ALLEGATIONS The voluminous Consolidated Complaint, which we will hereafter refer to simply as the complaint, comprises 93 pages and 171 paragraphs and incorporates by reference the Memorandum and the exhibits that were attached to it, including the tax opinion letter and the financial projections. We will attempt to briefly summarize the allegations, which, for the purposes of the pending Rule 12(b)(6) motions, we must accept as true and which must be construed in the light most favorable to the plaintiffs. Airlines Reporting Corp. v. Aero Voyagers, Inc., 721 F.Supp. 579, 581 (S.D.N.Y.1989); see Scheur v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Dacey v. New York County Lawyers’ Assoc., 423 F.2d 188, 191 (2d Cir.1969), cert. denied, 398 U.S. 929, 90 S.Ct. 1819, 26 L.Ed.2d 92 (1970). Plaintiffs are individuals who have invested various sums totalling $3,552,500 in defendant Arizona World Nurseries Limited Partnership (“AWNLP”). MI 3-4. We will sometimes refer to the plaintiffs as the limited partners. The complaint alleges that all twenty-nine defendants participated in a “scheme to defraud” and attempts to categorize the defendants into several groups. First, there are the so-called “Western defendants” which are a number of individuals and entities who were the former owners and/or managers of the nursery business. The plaintiffs allege the “Western defendants” include the following: Beardsley Holdings, Inc., Western United Nurseries, Inc., Sonora Nursery Sales, Inc., Fountainhead Nurseries Inc., Diversified Agronom-ics, Ltd., Phoenix Sunbelt Nurseries, Ltd., Great western Nurseries Ltd., Arizona United Nurseries, Ltd., Phoenix Sunbelt Nurseries II, Ltd., Phoenix Sunbelt Nurseries III, Ltd., White Tanks Nurseries, Ltd., Western Group Nurseries, Tyrone Kinder, Joseph Tyler, Bryce Corporation and Sonora Nursery Management, Inc. II6. The defendant Bryce Corporation has filed a motion to dismiss separate from the rest of the Western defendants. Accordingly, for the purposes of this opinion, “Western defendants” refers to all of the Western defendants except Bryce. Next, there are the “World defendants” who acquired the nursery business from the Western defendants and sold it two weeks later to the AWNLP. ¶ 5. Counsel representing these defendants have broken down the group further: the “World defendants” are defined as World Nurseries, Inc., Worldco Services Group, Inc., M & J Holding Corp., Herman Finesod and James Haber; and the “Partnership defendants” are defined as AWNLP and its general partner, Harvey Minars. All of these defendants are alleged to be the promoters of AWNLP. ¶ 6. Finally, there are what have been referred to as the professional defendants. The first of these are the accountants, the accounting firm Arthur Andersen & Co. and one of its partners, Ivan Faggen (the “Andersen defendants”), who prepared the tax opinion letter and certain financial projections for AWNLP. 117. The other professional defendants are the law firm of Friedman & Shaftan, P.C., and some of the firm’s lawyers, Wilfred T. Friedman, Michael E. Greene, and Marcia Shaftan, as the executrix of the Estate of Robert P. Shaftan (the “Friedman & Shaftan defendants”), who are alleged to have been counsel for the AWNLP and to have drafted the Memorandum, including the Federal Income Tax Factors section and the legal opinion. 118. The complaint alleges that all of the foregoing parties entered into a “scheme” to sell an unsuccessful nursery business in Arizona to AWNLP at an inflated price. The scheme was purportedly conceived by defendants Tyler and Kindor (who allegedly controlled the Western defendants), as the nursery business which the Western defendants allegedly owned and operated, and in which various limited partnership interests had been sold, was failing, so the investors needed to be “mollif[ied].” 1140. Thus, Kindor and Tyler allegedly arranged for the Andersen defendants to prepare various financial projections and a “favorable tax opinion letter” and to structure a sale to provide apparent tax write-offs that Kindor thought necessary to induce investors to purchase interests in AWNLP. ¶¶ 7B, 19, 44. Kindor gave Harold Schwartz, the president of the defendant Bryce Corporation, a memorandum of selling points that was prepared by Kind or, purportedly on the advice of the Andersen defendants, and Schwartz agreed to try to locate a purchaser, for which service he would receive a finder’s fee. UK 43, 44. Schwartz, in turn, gave the proposal to his son-in-law, defendant Haber, who was employed by defendant Finesod, the asserted “control person” of the World defendants. 1145. Sometime in November of 1984, the World defendants are alleged to have agreed “to join Tyler, Kindor and Arthur Andersen in endeavoring to sell the nursery business to AWNLP through the intermediary purchaser” World Nurseries. If 46. All allegedly agreed to structure the sale of the nursery business from the Western sellers to AWNLP “at an inflated purchase price through the use of a false appraisal and the use of World Nurseries as a sham intermediary purchaser.” ¶ 47. Thus, pursuant to the purported “scheme,” the Western defendants, in mid-December, sold the nursery business to World Nurseries for a total purchase price of $22 million, paid in the form of a $3 million “cash note” and a $17 million non-recourse note which was payable only from nursery income. Another $2 million was paid out of net sales of the nursery’s “plant materials.” ¶ 70. Then, on December 31, 1984, World Nurseries “contemporaneously” sold the business to AWNLP for approximately $33 million — $6.57 million in cash and a $26.43 million partnership note that was “wrapped around” the note given by World nurseries to the Western defendants. H 71. Plaintiffs apparently admit that the offering memorandum provided to each of them fully disclosed the details of this transaction, including the $11 million step-up in purchase price from World Nurseries to AWNLP, as they cite to the offering memorandum itself in the complaint. H 70B. Plaintiffs purchased their limited partnership interests in AWNLP sometime in December 1984. ¶ 3A. Plaintiffs claim to have done so in reliance on certain misrepresentations in, and omissions from, the Memorandum and the exhibits appended thereto. 111188-94. The alleged misrepresentations include (a) the overvaluation of the nursery stock and plant materials; (b) representation of a tax deduction in a year prior to eligibility; (c) unreasonably high sales projections; (d) unreasonably low expense projections; and (e) representation of reliance on an independent inspection. II88. The alleged omissions include the failure to disclose that the appraisal referred to was “arbitrary” and “unreasonable”; that the purchase price of the nursery stock was “inflated”; that the projections were based on unreasonable assumptions; that the investment in AWNLP had no real economic substance; that the sale was structured so as to leave control and benefits of ownership with the Western defendants; that the nursery business had an unprofitable history; that certain orders recorded in the books and records were fictitious; that much of the inventory was unmarketable; that the Western defendants had a poor reputation; that the business was “in jeopardy of collapse”; that the defendants knew that the projections were improper; that the defendants had falsified records and inflated receivables; that prior businesses run by the Western defendants had failed to meet their obligations to creditors and limited partners; that the defendants had previously structured similar limited partnerships which had been denied deductions by the IRS; that tax opinion letters for the prior partnerships in which the deductions had been disallowed had been prepared by the Friedman & Shaftan defendants; and that AWNLP was controlled not by the designated general partner but by Finesod who had been the promoter of other limited partnerships in which the deductions were disallowed. ¶ 93. The plaintiffs further allege that the “Western Sellers have contended in various litigation ... that each limited partner assumed personal liability on AWNLP’s note to World Nurseries in proportion to each limited partner’s share of interest in AWNLP.” ¶ 74. They do not, however, forthrightly concede what some of the defendants allege and what is readily apparent from the offering documents: that each limited partner was required to guarantee a pro rata portion of the partnership’s note in order to obtain the tax deductions that were the goal of their investment. See, e.g., Andersen Defendants’ Memorandum of Law at 7. Plaintiffs claim to have been damaged “in the amount of their investments.” E.g., 1111119, 127, 131, 138, 143, 152. II. ANALYSIS In their motions, all of the defendants essentially assert that plaintiffs have attempted to charge all 29 defendants with a failure to disclose that the purchase price of the nursery business was too high and, hence, that the business could not make a profit. This “excessive” price was based on a appraisal of the value of the business which the plaintiffs claim all of the defendants should have known was not a true and fair appraisal. 11 61. We will proceed to analyze each defendant’s liability, first under Section 10(b) and Rule 10b-5, then under Section 12(2), then under Section 17(a), then under RICO, and finally under the common law. A. LIABILITY UNDER SECTION 10(B) It is well settled that in order to state a claim under Section 10(b) of the Securities Exchange Act, 15 U.S.C. § 78j(b) (1982) or Rule 10b-5, promulgated thereunder, 17 C.F.R. § 240.10b-5 (1986), the first of plaintiffs’ causes of action that we will consider, six elements must be established. These necessary elements are: (1) a material misstatement or omission, (2) indicating an intent to deceive or defraud (scienter), (3) in connection with the purchase or sale of any security, (4) through the use of interstate commerce or a national securities exchange, (5) upon which the plaintiff detrimentally relied, and (6) that the fraud in fact caused the injuries. Luce v. Edelstein, 802 F.2d 49, 55 (2d Cir.1986); Feinman v. Schulman Berlin & Davis, 677 F.Supp. 168, 170 (S.D.N.Y.1988); First Federal Savings & Loan Ass’n v. Oppenheim, Appel, Dixon & Co., 629 F.Supp. 427, 438 (S.D.N.Y.1986). The motions to dismiss the Section 10(b) claims are founded on two grounds. First, the defendants, primarily the Andersen defendants, assert that the plaintiffs cannot state a claim under Section 10(b) because any misrepresentations in the offering materials are negated by the express language of the offering memorandum itself, the tax opinion letter and the report on the projections. While the Western defendants have also moved to dismiss for failure to state a claim, they and all of the other groups of defendants have focussed primarily on the second ground for dismissal — that the plaintiffs have not adequately alleged the element of scienter as to each defendant or group of defendants, which will require us to examine the complaint pursuant to Fed.R.Civ.P. 9(b). We will examine the 9(b) arguments first. 1. Rule 9(b) Motions Rule 9(b) requires that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Motive, intent, knowledge, and other conditions of mind of a person may be averred generally.” The specificity requirement of Rule 9(b) has been found to serve several purposes: “(1) to provide a defendant with fair notice of the plaintiffs'] claims, (2) to protect a defendant from harm to his or her reputation or goodwill, and (3) to reduce the number of strike suits.” Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir.1989); (quoting Stern v. Leucadia Nat’l Corp., 844 F.2d 997, 1003 (2d Cir.), cert. denied, — U.S. -, 109 S.Ct. 137, 102 L.Ed.2d 109 (1988)). Although each determination of compliance with Rule 9(b) “necessarily rests on its particular facts,” Denny v. Barber, 576 F.2d 465, 470 (2d Cir.1978), as a general rule, courts in this circuit have required that: [Pjlaintiff must specify: (1) precisely what statements were made in what documents or oral misrepresentations or what omissions were made, (2) the time and place of each such statement and the person responsible for making (or, in the case of omissions, not making) the same, (3) the context of such statements and the manner in which they misled the plaintiffs, and (4) what the defendants obtained as a consequence of the fraud. Todd v. Oppehheimer & Co., Inc., 78 F.R.D. 415, 420-21 (S.D.N.Y.1978); see also Posner v. Coopers & Lybrand, 92 F.R.D. 765, 769 (S.D.N.Y.1981), aff'd, 697 F.2d 296 (2d Cir.1982); Fidenas A.G. v. Honeywell, Inc., 501 F.Supp. 1029 (S.D.N.Y.1980); Gross v. Diversified Mortg. Investors, 431 F.Supp. 1080, 1087-88 (S.D.N.Y.1977), aff'd, 636 F.2d 1201 (2d Cir.1980). A fraud complaint must also apprise each individual defendant of the specific nature of his or her participation in the fraud, Sanderson v. Roethenmund, 682 F.Supp. 205, 207 (S.D. N.Y.1988), particularly where there are multiple defendants. DiVittorio v. Equidyne Extractive Indus. Inc., 822 F.2d 1242, 1247 (2d Cir.1987). These requirements have been applied stringently, especially where allegations of securities fraud are involved. Tobias v. First City Nat’l Bank and Trust Co., 709 F.Supp. 1266, 1276-77 (S.D.N.Y.1989) (collecting cases). However, the Second Circuit has recently repeated its admonition that “a court must read the complaint generously, and draw all inferences in favor of the pleader.” Cosmas v. Hassett, supra, 886 F.2d at 11, 12. Although under the second sentence of Rule 9(b) a complaint need only aver intent generally, it must nonetheless allege facts which give rise to a strong inference that the defendants possessed the requisite fraudulent intent — either intent to defraud, knowledge of falsity, or reckless disregard for the truth. Beck v. Manufacturers Hanover Trust Co., 820 F.2d 46, 50 (2d Cir.1987), cert. denied, 484 U.S. 1005, 108 S.Ct. 698, 98 L.Ed.2d 650 (1988), overruled on other grounds, United States v. Indelicato, 865 F.2d 1370 (2d Cir.1989) (en banc), cert. denied, — U.S. -, 110 S.Ct. 56, 107 L.Ed.2d 24 (1989). There are essentially two ways to establish a strong inference of scienter. A plaintiff may allege facts showing a motive for committing fraud and a clear opportunity for doing so. Beck, 820 F.2d at 50. Or, “[wjhere motive is not apparent, it is possible to plead scienter by identifying circumstances indicating conscious behavior by the defendant, though the strength of the circumstantial allegations must be correspondingly greater.” Id. The specific requirements regarding exactly what statements were made, and when, where and by whom are “somewhat relaxed” when the complaint is based on an offering memorandum. Stevens v. Equidyne Extractive Indus. 1980, 694 F.Supp. 1057, 1061 (S.D.N.Y.1988). The memorandum “satisfies 9(b)’s requirements as to identification of the time, place, and content of the alleged misrepresentation ... Furthermore, no specific connection between fraudulent representations in the Offering Memorandum and particular defendants is necessary where ... defendants are insiders or affiliates participating in the offer of the securities in question.” Luce v. Edelstein, supra, 802 F.2d at 55 (citations omitted). While it is clear that general partners offering limited partnerships are considered insiders for purposes of Rule 9(b), the standard is less clear with respect to other types of defendants, particularly professional defendants. Stevens, 694 F.Supp. at 1061. There is, however, authority for the proposition that where counsel drafted the offering memorandum and were acting on behalf of the general partner, they are not, without more, corporate insiders or affiliates to whom the relaxed pleadings standards are applicable. See DiVittorio, supra, 822 F.2d at 1249; Stevens, 694 F.Supp. at 1062. Thus, they are not ordinarily liable for the general statements in the offering memorandum but rather plaintiffs must specifically attribute misstatements or omissions to them. (a) The Andersen defendants Utilizing this as the standard for both groups of professional defendants, see Stevens, 694 F.Supp. at 1062, we determine that plaintiffs have specifically attributed statements to the Andersen defendants such that the time and place elements of 9(b) are satisfied. For example, the Andersen defendants performed two tasks in connection with the AWNLP offering memorandum: they prepared financial projections and compilation reports (based upon assumptions provided by the general partner) as well as a tax opinion letter analyzing the tax implications of the investment. Plaintiffs contend that both the tax opinion letter and the projections were materially false and misleading at the time they were made. The Andersen defendants argue, however, that plaintiffs have failed to allege facts which give rise to a strong inference of scienter, as required in this Circuit. Reading the complaint generously, we agree that plaintiffs have not alleged facts which give rise to a strong inference that the Andersen defendants possessed the requisite fraudulent intent. Taking the allegations as true that the Andersen defendants, in preparing the tax opinion letter and the projections, failed to disclose (1) the falsity of the World Information Systems (“W.I.S.”) appraisal of the nursery business sold to AWNLP, ¶ 93(1); (2) the unreasonableness of the assumptions upon which the projections were based, ¶ 93(f); (з) the formulas and methods of calculation of the projections, ¶ 93(g), (4) the fact that the nursery business was failing at the time of the sale to the AWNLP, ¶ 93(r), (t), (и), and (5) the large projected operational expenses for 1985, ¶ 93(cc), we believe that the allegations as to the Andersen defendants’ state of mind are merely conclusory and that there are no factual allegations which indicate that they knew of the alleged “unreasonableness” of the assumptions, the “falsity” of the appraisal, and the “fact” that the nursery business was “failing.” There is no indication in the complaint of how or when either the Andersen firm or defendant Faggen supposedly knew that the projections were indeed based upon unreasonable assumptions and that the appraisal was incorrect and misleading. While the complaint repeatedly alleges that all of the defendants knew or should have known that the appraisal of the nursery business was inaccurate “because of each defendant’s experience, skill, expertise and training,” ¶¶ 61, 62A, 63 and 94, it does not allege that Andersen or Faggen had anything to do with the appraisal, or indeed, that they had any reason to know or believe that it was inaccurate. For example, it is not alleged that they had access to specific information showing that the appraisal was wrong. Nor is it alleged that they conducted an audit from which they should have learned that the appraisal or other documents provided by the general partner were false. Although it is alleged that the accounting firm of Peat Marwick conducted an examination in November of 1983 of the financial condition of the nursery business as of the year ending 1982, which examination was not completed, and that Peat Marwick’s work papers show that Peat Marwick found some accounting irregularities, HU 54, 57, significantly, plaintiffs have not alleged that Andersen ever reviewed Peat Marwick’s work papers. Even if the Andersen defendants had conducted a full audit, it is well settled that an inference of fraud does not arise from the mere fact that an auditor reported on allegedly inaccurate data. The Limited, Inc. v. McCrory Corp., 683 F.Supp. 387, 394 (S.D.N.Y.1988); see Dannenberg v. Dorison, 603 F.Supp. 1238, 1241 (S.D.N.Y.1985); Ross v. Warner, 480 F.Supp. 268, 272 (S.D.N.Y.1979). Furthermore, a purported failure to investigate “[does] not rise above the level of negligence, which is legally insufficient.” O’Brien v. National Property Analysts Partners, 719 F.Supp. 222, 229 (S.D.N.Y.1989) (quoting The Limited, Inc., 683 F.Supp. at 394). Although proof of reckless conduct will satisfy the scienter requirement, see Goldman v. McMahon, Brafman, Morgan & Co., 706 F.Supp. 256, 259 (S.D.N.Y.1989), and despite the fact that “an egregious refusal to see the obvious, or to investigate the doubtful may, in some cases, give rise to an inference of gross negligence which can be the functional equivalent of recklessness,” see id., we do not believe there are any allegations in the complaint from which we can infer either gross negligence or recklessness. Furthermore, as to the alleged failure to disclose some of the operating expenses, there is no indication that these figures were provided by the general partner to the Andersen defendants in the first place, and thus we cannot infer that the Andersen defendants knowingly failed to disclose them to the limited partners. The same can be said with respect to the allegation that the Andersen defendants knowingly failed to disclose the prior unsuccessful history of the nursery business. Finally, with respect to the Andersen defendants’ intent, we find that the alternative method of demonstrating scienter— motive — has not been established. Plaintiffs contend that the Andersen defendants were motivated to participate in the fraud because of personal gain. However, they have alleged no gain other than the fact that the Andersen firm was compensated for its professional services. It would defy common sense to hold that the motive element of the Beck scienter analysis would be satisfied merely by alleging the receipt of normal compensation for professional services rendered, because to do so would effectively abolish the requirement, as against professional defendants in a securities fraud action, of pleading facts which support a strong inference of scienter. Cf. Wilson v. Saintine Exploration and Drilling Corp., 872 F.2d 1124 (2d Cir.1989) (holding that professional defendants who merely perform their usual professional functions and receive their normal compensation are not liable under the “draconian” provisions of Section 12(2)). Accordingly, the Section 10(b) claim is dismissed with respect to the Andersen defendants for failure to adequately plead the element of scienter. (b) The Friedman & Shaftan defendants As to the other professional defendants, the attorneys, we conclude that the Section 10(b) claims are also not adequately pled pursuant to Rule 9(b) of the Federal Rules of Civil Procedure. First, plaintiffs have not satisfied the rule that each of the Friedman & Shaftan defendants be given notice of the specific allegations against him, her or it. Di Vittorio, supra, 822 F.2d at 1247. Although plaintiffs have sued the Friedman firm itself (Friedman & Shaftan, P.C.), plaintiffs have also joined the professional services eorporations’s shareholders, Wilfred T. Friedman, Michael E. Greene and Marcia Shaftan as executrix of the Estate of Robert P. Shaftan. The complaint, however, constantly refers to “Friedman & Shaftan” without indicating who did what and when. Furthermore, where the plaintiffs have attempted to identify acts of the individual defendants, they were unsuccessful in so doing. For example, in paragraph 26, it is alleged that Friedman & Shaftan, through Shaftan and Greene, “engaged in a high degree of individual effort to sell interests in AWNLP” and that they answered plaintiffs’ inquiries and assured plaintiffs of the bona fides, inducing them to purchase interests. However, even if we assume that the attorney defendants are “insiders” for Luce purposes, this paragraph alleges misrepresentations and conduct not tied to the offering memorandum, and therefore, specificity as to time, place and the content of the alleged misrepresentations is required. See Tobias v. First City Nat’l Bank and Trust Co., 709 F.Supp. 1266, 1277 (S.D.N.Y.1989). Since paragraph 26 contains no such specificity, we conclude that these allegations are inadequately pled. With regard to the allegations concerning the preparation of the offering memorandum itself, as we stated above, counsel who merely draft the memorandum cannot be held liable for the general statements in the offering memorandum not specifically attributed to them. See supra at 531. Thus, plaintiffs must plead the time, place and content requirements of Rule 9(b). Plaintiffs do not attribute any specific misrepresentations to counsel; indeed, with respect to the tax assistance letter and the opinion regarding the legality of the partnership units provided by the law firm, the only parts of the memorandum which arguably contain representations from Friedman & Shaftan to the limited partners, no breach is alleged. Even if we assume arguendo that the attorneys are insiders for Luce purposes, the allegations are deficient with respect to the scienter element. Plaintiffs have not pled facts which would fairly support a strong inference that any of the attorney defendants, either the firm itself or the named individuals, acted with an intent to defraud, or at least with reckless disregard for the truth. Beck, supra, 820 F.2d at 50. Assuming that the offering memorandum contained false and misleading information, plaintiffs do not allege any specific facts as to how and when any of the Friedman & Shaftan defendants learned that the offering memorandum contained such false and misleading information. Devaney v. Chester, 813 F.2d 566, 568-69 (2d Cir.1987); Vereins-Und Westbank AG v. Carter, 639 F.Supp. 620, 623 (S.D.N.Y.1986). There are no allegations that they had any specific communications or that they had met with any specific individuals, which facts would have created the necessary strong inference that each of the attorney defendants had the requisite fraudulent intent. Schwartz v. Novo Industries, A/S, 658 F.Supp. 795, 799 (S.D.N.Y.1987). We will not assume that clients as a matter of course communicate their allegedly fraudulent schemes, in whole or in part, to their attorneys. Furthermore, the mere fact that the Friedman firm had worked with the defendant Finesod on other offerings in the past does not raise a strong inference of fraud here in that plaintiffs do not allege that the Friedman & Shaftan defendants were ever accused of or determined to have committed any wrongdoing with respect to any of the prior tax shelters. Dannenberg v. Dorison, 603 F.Supp. 1238, 1241 (S.D.N.Y.1985). In addition, we conclude that the entire complaint does not state a claim against Wilfred Friedman under either New York or federal vicarious liability principles. New York’s Business Corporation Law § 1505(a) provides that “[e]ach shareholder, employee or agent of a professional service corporation shall be personally and fully liable and accountable for any negligent or wrongful act or misconduct committed by him or by any person under his direct supervision and control while rendering professional services on behalf of such corporation.” (McKinney’s 1986). While plaintiffs allege that defendants Shaftan and Greene worked on the offering memorandum and/or participated in the offering, they do not allege any such work by attorney Friedman or any direct supervision or control by him over the others. Accordingly, reading the plain words of the statute, We’re Associates v. Cohen, Stracher & Bloom, 65 N.Y.2d 148, 151, 490 N.Y.S.2d 743, 744, 480 N.E.2d 357 (1985), the complaint does not state a claim under New York law on the part of Wilfred Friedman. Federal law, 15 U.S.C. § 78t(a), dictates the same result, for in order to be held liable as a “control person” there must be facts alleged supporting an inference of knowledge or reckless disregard of the fraud, see Harrison v. Enventure Capital Group, Inc., 666 F.Supp. 473, 478-79 (W.D.N.Y.1987); O’Connor & Assocs. v. Dean Witter Reynolds, Inc., 529 F.Supp. 1179, 1195 (S.D.N.Y.1981), and the defendant must “in some meaningful sense” be a culpable participant in the fraud perpetrated. See Lanza v. Drexel & Co., 479 F.2d 1277, 1299 (2d Cir.1973) (en banc). To summarize, the Section 10(b) claims are dismissed as to all of the Friedman & Shaftan defendants for failure to plead scienter, and the entire complaint is dismissed as to Wilfred Friedman for failure to plead facts alleging supervision or control. (c) The Bryce Corporation As to the defendant Bryce Corporation, we also conclude that the plaintiffs’ complaint is inadequately pleaded pursuant to Rule 9(b). The only specific allegations in the complaint directed at Bryce are in paragraphs 6F, 42, 43, and 45. These allegations do not, however, attribute any particular misrepresentation or fraudulent act or omission to defendant Bryce. Furthermore, the plaintiffs concede that Bryce is not a “Western Seller,” ¶ 6A, and therefore the allegations regarding fraud by the Western Sellers are not applicable to Bryce. Moreover, accepting the allegations against Bryce as true, there are no facts in the complaint from which we could draw any inference, let alone a strong one, that Bryce- knew of any fraud. As eloquently stated by Judge Leisure, “plaintiffs cannot satisfy Rule 9(b) by masking the lack of factual allegations against each defendant through broad allegations which combine the acts of several defendants to create the impression that all engaged in every aspect of the alleged fraud.” O’Brien v. National Property Analysts Partners, 719 F.Supp. 222, 229 (S.D.N.Y. 1989). Therefore, we reject plaintiffs’ attempt in their memorandum in opposition to insert the name “Bryce” where the complaint does not do so and where the complaint indicates involvement of parties other than Bryce, such as the Western Sellers. Accordingly, the section 10(b) claims against Bryce are dismissed. (d) The Western, World and Partnership defendants With regard to the Western defendants, we conclude that the Section 10(b) claims are adequately pleaded. Plaintiffs allege that defendants Kindor and Tyler, who are alleged to control the rest of the Western defendants, conceived the scheme to defraud because they needed to mollify other investors. ¶ 40. Kindor and Tyler are alleged to have persuaded Finesod, Haber and Minars (of the World and Partnership defendants) to join in a fraudulent scheme, ¶ 46, whereby the nursery business would be resyndicated to a new limited partnership. ¶ 41. Specifically, plaintiffs allege that all of the above parties agreed to structure the sale of the nursery business from the Western Sellers to AWNLP “at an inflated purchase price through the use of a false appraisal and the use of World Nurseries as a sham intermediary purchaser.” ¶ 47. Each of these defendants was motivated by the ability to earn immediate cash profits and the Western defendants were further motivated by the ability to “mollify” their other investors. Furthermore, we find that there was a clear opportunity to commit fraud. Beck, supra, 820 F.2d at 50. Although the Western defendants claim that they had no duty to disclose anything to the plaintiffs and therefore that they cannot be held liable under Section 10(b), we conclude that they may indeed be held liable for they are alleged to be parties to the purchase or sale, to have substantially participated in the concealment of material facts, or in the alternative to have been aiders and abettors to the sale. See Murphy v. McDonnell & Co., Inc., 553 F.2d 292, 295 (2d Cir.1977). For example, the Western Sellers are alleged to have created the scheme, and despite their protestations to the contrary, to have assisted in the preparation of the offering materials. They are also alleged to have knowingly provided the sham appraisal and other false information, which they knew were either to be the basis for the projections or actually used in the offering memorandum. Furthermore, paragraph 93 is replete with allegations of their acts or omissions from which we can infer that the Western defendants acted with the requisite fraudulent intent both with respect to the projections and other fraud. For example, paragraph 93(m) essentially alleges that the Western defendants “cooked the books” by including sham purchase orders. Paragraph 93(o) alleges that the Western Sellers prematurely shifted plants to over-sized containers for sale to AWNLP to inflate their market value. Paragraph 93(w) accuses the Western defendants of artificially inflating receivables. Paragraphs 93(n) and (s) allege that the Western Sellers prepared the sham customer list attached to the offering memorandum. Accordingly, the Western defendants motion to dismiss pursuant to Rule 9(b) is denied. As to the World and Partnership defendants, many allegations described above also support an inference that the World and Partnership defendants acted with the requisite fraudulent intent, particularly the fact that Finesod and Haber were able to realize an immediate cash profit of $3.57 million, 1M1 53, 48, in the resale to AWNLP without any risk and without performing any function. ¶ 93(j). Beck, supra, 820 F.2d at 50 (inference of scienter where motive and clear opportunity to commit fraud). While it is true that the allegations regarding the procurement of the appraisal, fl 59, could probably be more particularly stated, we find that they are sufficient to give the World, Western and Partnership defendants notice of the acts for which plaintiffs seek to hold them liable. Furthermore, while it is true that these groups of defendants actually comprise over twenty individuals or entities, we cannot, at this point, in view of our obligation to accept the allegations in the complaint as true, dismiss any of these entities as not being controlled by or affiliates of either Kindor and Tyler or Haber and Finesod. Accordingly, in light of all of the foregoing and in view of the fact that the Partnership and World defendants are insiders, we find that the Section 10(b) fraud allegations are pleaded with the particularity required by Rule 9(b). 2. Rule 12(b)(6) We will now address the Andersen, Western and World defendants’ motions to dismiss pursuant to Rule 12(b)(6). In challenging the sufficiency of the complaint under rule 12(b)(6), the defendants bear the burden of proving that under no interpretation of the facts set forth in the complaint can the plaintiffs succeed. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). As expressed above, supra at 527, for the purposes of this motion, all of the plaintiffs’ allegations are accepted as true, and no claim can be dismissed “unless it appears beyond doubt that the plaintiff[s] can prove no set of facts in support of [their] claim which would entitle [them] to relief.” Id.; Hughes v. Rowe, 449 U.S. 5, 10, 101 S.Ct. 173, 176, 66 L.Ed.2d 163 (1980). In these motions, the defendants assert that the plaintiffs cannot state a claim under Section 10(b) because any misrepresentations in the offering memorandum are negated by the express language of the offering memorandum itself, the tax opinion letter and the report on the projections. These defendants assert that there is a line of cases in this Circuit which holds that, as a matter of law, extensive cautionary language in the offering documents will preclude Section 10(b) claims based on those documents. Luce v. Edelstein, 802 F.2d 49, 56-57 (2d Cir.1986); see also Feinman v. Schulman Berlin & Davis, 677 F.Supp. 168, 170 (S.D.N.Y.1988); Andreo v. Friedlander, Gaines, Cohen, Rosenthal & Rosenberg, 651 F.Supp. 877, 881 (D.Conn. 1986). While we do not agree with the assertion that this line of cases precludes all claims of misrepresentation, we do recognize that it mandates dismissal of many of the Section 10(b) claims alleged here, specifically, those founded upon the projections and other expectations which were expressed in the offering memorandum or in the attachments thereto. Plaintiffs have requested that we defer this motion until the summary judgment phase of the case, citing Devaney v. Chester, 813 F.2d 566 (2d Cir.1987). Devaney, however, does not so require; it merely stands for the proposition that courts should not consider the reasonableness of plaintiffs’ reliance on a Rule 9(b) motion, as the issue goes to the merit of the plaintiffs’ claims. Id. at 569. Devaney does not preclude a court from deciding the reliance issue as a matter of law on a motion pursuant to Rule 12(b)(6). Indeed, it is well settled that although a Rule 12(b)(6) motion is addressed to the face of the pleading, the pleading has been interpreted by the Second Circuit as “includ[ing] any document attached to it as an exhibit or any document incorporated in it by reference.” Goldman v. Belden, 754 F.2d 1059, 1065-66 (2d Cir.1985) (citations omitted). Here, the Memorandum is attached to the complaint as Exhibit A, to which, in turn, the tax opinion letter and the financial projections are appended as Exhibits B and F, respectively. It is clear from the papers submitted in this action that all parties consider these voluminous documents to be part of the complaint, as do we. Before we examine the arguments made by the defendants, we believe it is necessary to highlight the relevant portions of the offering memorandum and its attachments which will be applicable to such examination. (a) The Offering Materials On the front page of the Offering Memorandum, in large bold and block letters, the following statement appears: THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK (See “Risk Factors”) The next four pages of the Memorandum, which we will label the “foreword” section and which are paginated i-iv, contain very specific warnings, all of which are repeated in greater detail in the Memorandum itself. These cautionary instructions are also in block letters, and we will set forth those that are most germane to the instant action. For example, on page i, it is stated that “AN INVESTMENT IN THE PARTNERSHIP ENTAILS SIGNIFICANT RISKS.” SEE “RISK FACTORS,” AND “FEDERAL INCOME TAX FACTORS.” This admonition continues by listing seven of the potential risks, including: 4. SUBSTANTIAL COMPENSATION WILL BE PAID TO WORLD NURSERIES AND ITS AFFILIATES IN CONNECTION WITH THIS OFFERING AND THE ACQUISITION OF THE NURSERY ASSETS BY THE PARTNERSHIP, INCLUDING SUBSTANTIAL COMPENSATION PAID FROM THE PROCEEDS OF THIS OFFERING. 5. POTENTIAL CONFLICTS OF INTEREST EXIST BETWEEN THE PARTNERSHIP AND THE GENERAL PARTNER, WORLD NURSERIES, BEARDSLEY AND THEIR AFFILIATES AND COUNSEL TO THE PARTNERSHIP. 7. THERE ARE OTHER SUBSTANTIAL RISKS RELATING TO THE AVAILABILITY AND AMOUNT OF TAX BENEFITS RESULTING FROM AN INVESTMENT IN THE PARTNERSHIP. NO RULINGS HAVE BEEN SOUGHT FROM THE INTERNAL REVENUE SERVICE (“SERVICE”) WITH RESPECT TO ANY OF THE TAX MATTERS DESCRIBED IN THIS MEMORANDUM. IF FOR FEDERAL INCOME TAX PURPOSES [one or more of seven enumerated events occurs], ALL OR A SUBSTANTIAL PART OF THE TAX BENEFITS DESCRIBED HEREIN WOULD NOT BE AVAILABLE TO THE INVESTORS. IN ADDITION, OTHER AUDIT ADJUSTMENTS MAY AFFECT BOTH THE TIMING AND THE AMOUNT OF THE TAX BENEFITS AVAILABLE. Offering Memorandum at ii. After these statements, specific and detailed warnings with reference to the tax opinion letter appear, after which the following, also in block letters, appears: THE TAX OPINION IS NOT BINDING ON THE SERVICE OR ANY COURT OF LAW. H: sfs Jfc ¡k :js sjs NO REPRESENTATION OR WARRANTIES OF ANY KIND ARE MADE OR INTENDED, WITH RESPECT TO THE ECONOMIC RETURN OF THE TAX BENEFITS WHICH MAY ACCRUE TO INVESTORS. NO ASSURANCE CAN BE GIVEN THAT EXISTING TAX LAWS WILL NOT BE CHANGED OR INTERPRETED ADVERSELY. A CHANGE IN OR ADVERSE INTERPRETATION OF EXISTING TAX LAWS MAY DENY THE INVESTORS ALL OR A PORTION OF THE TAX BENEFITS CONSIDERED HEREIN. EACH INVESTOR MUST CONSULT WITH HIS OWN COUNSEL AND OTHER ADVISERS WITH RESPECT TO THE TAX AND OTHER CONSEQUENCES OF AN INVESTMENT IN THE PARTNERSHIP, AND MUST REPRESENT THAT HE HAS DONE SO PRIOR TO THE PURCHASE BY HIM OF ANY UNITS. Offering Memorandum at iii. The final cautionary words in the “foreword” section of the Memorandum relate to representations made by the general partner and other than the general partner. Basically, it is stated that only the general partner, and no one else, is authorized to supply potential investors with information. Further, there is a disclaimer that ANY INFORMATION NOT SO SUPPLIED OR ANY STATEMENT NOT CONTAINED HEREIN CANNOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE PARTNERSHIP OR THE GENERAL PARTNER, ANY AFFILIATES OF THEM OR ANY PROFESSIONAL ADVISERS THERETO. Offering Memorandum at iii. In addition, regarding the statements and representations made, there is a disclaimer that THE STATEMENTS CONTAINED HEREIN ARE BASED ON INFORMATION BELIEVED BY THE GENERAL PARTNER TO BE RELIABLE. NO WARRANTY CAN BE MADE AS TO THE ACCURACY OF SUCH INFORMATION OR THAT CIRCUMSTANCES MAY NOT HAVE CHANGED SINCE THE DATE SUCH INFORMATION WAS SUPPLIED. Offering Memorandum at iii-iv. The “Risk Factors” section of the Offering Memorandum outlines in considerable detail (eleven pages), the potential risks of investing in the partnership. A number of the risks are then enumerated in further detail in other sections of the memorandum. In this section, the admonition is repeated that there is no representation made, nor can any be inferred, regarding the accuracy or completeness of the financial projections or the underlying assumptions. Offering Memorandum at 19. It is also stated in this section that there was no audit of the Partnership’s financial statement performed by independent accountants, id. at 21, that there are or may be significant conflicts of interest between the “General Partner, the Partnership, World Nurseries, Beardsley, the Manager, and their respective Affiliates and their counsel,” id. at 18, that there are significant tax risks, id. at 22-27. Regarding the existing or potential conflicts of interest, these are delineated, in detail, in one and one-half pages of the memorandum. Specifically relevant for the purpose of the pending motions is the statement therein that “[t]he terms of the [agreement between World Nurseries and the Partnership for the acquisition of the Nursery Assets by the Partnership] are not the result of arm’s length bargaining, although certain terms included therein are based on the Western Agreement which was negotiated at arm’s length between the Western Group and World Nurseries.” Offering Memorandum at 51 (emphasis added). Also germane is the paragraph regarding the defendant Friedman & Shai-tan's role, It provides in part that: Friedman & Shaftan, P.C. is acting as counsel to the Partnership in connection with this Offering and may render future legal services to the Partnership. Friedman & Shaftan, P.C. has acted as counsel to World Nurseries and its Affiliates. No independent counsel representing solely the Limited Partners has been involved in the negotiation of this offering or of the transaction proposed hereby and the partnership does not intend to retain such counsel in the future. Id. at 52 (emphasis added). The actual Tax Opinion Letter issued by the defendant Arthur Andersen contained the following statement: The tax analysis with which we concur is not binding on the Internal Revenue Service and there can be no assurance that the service will not take a position contrary to any of the opinions expressed therein or that if the Service took such a position, it would not be sustained by the courts. In addition, prospective investors are urged to seek the advice of their personal tax advisors, (emphasis added) Id. Furthermore, on the subject of expected tax benefits, it was expressly stated in the introduction to the Federal Income Tax Factors section of the Memorandum, on which the tax opinion is, in large part, based, that “there can be no assurance that some of the deductions and credits claimed by the partnership will not be challenged by the Service.... A PROSPECTIVE INVESTOR SHOULD OBTAIN PROFESSIONAL GUIDANCE FROM HIS OWN TAX ADVISER IN EVALUATING THE TAX RISKS INVOLVED.” Offering Memorandum at 53 (emphasis in original). In this “Tax Factors” section of the memorandum, which comprises thirty four pages, numerous potential risks are enumerated and discussed in detail, and several possible resolutions by the IRS for each issue are presented. Id. at 53-86. As for the Financial Projections prepared by the Andersen defendants, they contain the express admonition that they were generated based on these assumptions and upon appraisals of the nursery items as well as the sales of the nursery items. Some assumptions may not materialize, and unanticipated events and circumstances may occur subsequent to the date of the projections. Accordingly, the actual results achieved during this projection period may vary from the projections and the variations may be substantial. Id. The cover letter which accompanied the projections, dated December 14, 1984, likewise states that the projections “are based on appraisals, assumptions and estimates which we^e made by the representatives of Arizona World Nurseries Limited Partnership.... ” The letter further states that Andersen’s sole undertaking with respect to the projections was to satisfy itself “as to the mathematical accuracy of the projections and that they fairly reflect the estimates and assumptions contained therein.” The letter then recites extremely explicit warnings as to the accuracy and ac-hievability of the projections: The selection of estimates and assumptions requires the exercise of judgment and is subject to uncertainties relating to the effect that changes in legislation or economic or other circumstances may have on future events. There can be no assurance that the assumptions or data upon which they are based are accurate. Variations of such assumptions could significantly affect the projections. To the extent that the assumed events do not occur, the outcome may vary significantly from that projected. Accordingly, we express no opinion on the achievability of the results presented in the projections, and no representation to the contrary may be made or implied, (emphasis added) The Subscription Agreement, located at Exhibit J to the Offering Memorandum, signed by each of the plaintiffs, contains the following relevant representations and warranties by the investors: “I have been informed that my investment is a high risk investment, and in evaluating such investment I have consulted with my own investment and/or legal and/or tax advisor” ¶2(c); “With respect to the tax and other legal aspects of my investment I have relied solely upon the advice of my own tax and legal advisors” ¶ 2(i); and “I recognize that the Partnership is newly organized and has no history of operations or earnings and is a speculative venture ¶2®. Finally, we note that the Offering Memorandum fully discloses the details of the sale of the nursery from the Western Sellers to World Nurseries and the subsequent sale, two weeks later, by World Nurseries to the Partnership, including the $11 million step-up in purchase price from World Nurseries to the Partnership. Offering Memorandum at 36-37. In fact, plaintiffs’ complaint pleads the details of the sale and cites to the offering memorandum, thus implicitly conceding that there was indeed full disclosure of the sales. (b) Analysis In view of all of the foregoing warnings and cautionary language contained in the tax opinion letter, the projections, and the offering memorandum itself (particularly the foreword and tax factors sections), we conclude that Luce and its progeny are applicable here so as to preclude liability for misrepresentations regarding expected or future tax benefits or profits. In fact, Luce specifically involved allegations that statements in the offering memorandum regarding financial projections of future cash flow and expected tax benefits were materially misleading. Luce v. Edelstein, 802 F.2d at 56-57. The projections in Luce, like those in issue here, contained warnings that they were “necessarily speculative in nature,” that “[n]o assurance [could] be given that these projections [would] be realized,” and that “[actual results may vary from the predictions and that these variations may be material.” Luce, supra, at 56. Accordingly, the Luce court stated that it “was not inclined to impose liability on the basis of statements that clearly ‘bespeak caution’ ”. Id. Relying on Luce, the court in Feinman v. Schulman Berlin & Davis, 677 F.Supp. 168, 170-71 (S.D.N.Y.1988), rejected plaintiffs' Section 10(b) claims relating to projected tax benefits. There, after detailing the cautionary language in the offering memorandum, which we note is quite similar to that in issue here, the court stated that the “offering memorandum warned plaintiffs not to rely on the misrepresentations which the defendants allegedly made. Plaintiffs' reliance on these representations, if made, was unjustified and dismissal is appropriate.” Id. at 171. See also Andreo v. Friedlander, Gaines, Cohen, Rosenthal & Rosenberg, 651 F.Supp. 877, 881 (D.Conn.1986) (dismissing Section 10(b) claims because “the language of the document in question limited the degree to which investors should rely on it”). The projections in issue here make clear that they “are based upon assumptions made by Arizona World Nurseries Limited Partnership of the income and expenses and cash flow from the operations of the nursery.” Offering Memorandum, Ex. F: “Notes and Assumptions” section of the Financial Projections at 1. Furthermore, the projections expressly cautioned that they were based upon these assumptions and appraisals, and that some of the assumptions may not materialize, and thus, that the actual results achieved could then vary from the projections substantially. In addition, the cover letter which accompanied the projections made clear the limited role that the Andersen defendants assumed with reference to the projections (that they did not perform an audit and that they did not verify the assumptions provided by the general partner), and once again, explicitly warned, as set out above, as to the accuracy and achievability of the projections. Certainly, then, no misrepresentation claim can be predicated upon the fact that the projections did not bear out. Luce, supra, at 57; Feinman, supra, at 170-71; Andreo, supra, at 881-82. Likewise, the tax opinion letter states only that Andersen had “reviewed” the material in the private offering memorandum, and particularly the “Federal Income Tax Factors” section (which we note includes a lengthy discussion of the deductibility of the purchase price of the nursery stock and the potential challenges by the IRS). Based on this review, Andersen had determined that, in its opinion, “all material Federal tax issues have been considered and have been fully and fairly discussed,” that “the Partnership will more likely than not prevail on each material tax issue presented,” and that “in the aggregate the tax benefits of an investment in the Partnership will more likely than not be realized.” Offering Memorandum, Ex. B. Andersen never stated that the limited partners were certain to receive their desired tax deduction; rather, the accountants issued warnings to the contrary, as set forth in full above. It is clear, from the tax opinion letter, the Tax Factors section of the offering memorandum, and the warning pages in block letters in the “foreword” section of the memorandum, that no assurances were made by the Andersen defendants regarding the availability of the deductions or the accuracy of the appraisal. Furthermore, as can be seen from the warnings in the front of the offering memorandum also quoted above, as well as the “Tax Risks” section of the Memorandum, and as stated on page two of the tax opinion letter, Andersen relied on the factual information provided to it by the management of the partnership. Tax Opinion Letter at 2 (Andersen “relied on management and their legal counsel for business and legal matters”); Offering Memorandum at 22 (“INVESTORS ARE CAUTIONED THAT THE CONCLUSIONS IN THE TAX OPINION ARE BASED UPON CERTAIN REPRESENTATIONS TO ARTHUR ANDERSEN BY THE GENERAL PARTNER”). We conclude that, given all of the cautionary language, Andersen’s tax opinion cannot be read to mean that Andersen undertook to make representations of any kind regarding the value of the nursery stock. Furthermore, we find that, to the extent that plaintiffs relied on the tax opinion letter as representing otherwise, such reliance was not reasonable. Thus, plaintiffs cannot state a claim based upon the fact that the IRS disallowed the deductions. Accordingly, those Section 10(b) claims that must be, and are hereby, dismissed against all the defendants are the claims of misrepresentation based on the future expectations and performance of the limited partnership contained in the offering memorandum or its attachments. The warnings and disclaimers discussed above clearly limited the degree to which an investor could reasonably rely on these documents as a forecast of the future. Luce v. Edelstein, 802 F.2d at 56-57. We believe, however, that there are several asserted misrepresentations that can not be dismissed on the instant record. For example, the cautionary language may not be sufficient to disclaim liability on the part of either the World, Partnership or Western defendants for the misrepresentations, omissions and fraudulent conduct regarding the then-existing condition and value of the nursery business, to wit: the nursery stock and plant materials, the equipment, the customer lists and so forth, as the disclamatory language quoted above states that the projections were based on the appraisal procured by the World and Western defendants and on assumptions provided by the general partner. All of the Section 10(b) claims regarding then-existing misrepresentations are, however, dismissed as to the Andersen defendants, see Andreo, 651 F.Supp. at 881, as well as the Friedman & Shaftan defendants and the Bryce Corporation, because of both the limited role, if any, these defendants had regarding the documentation and authentication of the then-existing conditions and value, and our conclusion above that the scienter element was not properly pleaded with respect to these three groups of defendants. On the other hand, claims of misrepresentation relating to then-existing conditions and value are sustained for the purposes of the present motion as to the World, Partnership, and Western defendants. B. LIABILITY UNDER SECTION 12(2) OF THE SECURITIES ACT Section 12(2) of the Securities Act provides purchasers with a cause of action against a person who “offers or sells a security” by means of a defective prospectus. 15 U.S.C. § 771 (2). If a security is sold “by means of” a misstatement or omission, the purchaser may tender the security to the seller and recover the purchase price plus interest, less income, or if the purchaser no longer owns the security, he or she may recover equivalent rescissory damages. Randall v. Loftsgaarden, 478 U.S. 647, 655-56, 106 S.Ct. 3143, 3148-49, 92 L.Ed.2d 525 (1986). There is no need for reliance by the plaintiffs on the misrepresentation, L. Loss, Fundamentals of Securities Regulation 889 (2d ed. 1988) (citing, inter alia, Wigand v. Flo-Tek, Inc., 609 F.2d 1028, 1034 (2d Cir.1979)), and there is no need for plaintiffs to establish a causal connection between the misrepresentation and the damage suffered, if any. Loss, supra; see also Wilson v. Saintine Exploration and Drilling Corp., 872 F.2d 1124, 1127 (2d Cir.1989). Plaintiffs here allege that all of the defendants are statutory sellers of the limited partnership interests, or in the alternative, that they are aiders and abettors to a statutory seller. The Second Circuit has held that “persons who do not meet the Pinter test for statutory sellers may not be held liable under Section 12 as aiders and abettors.” Wilson, supra, 872 F.2d at 1127 (construing Pinter v. Dahl,