947 F.2d 952
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.Arthur Weeden;  Virginia Weeden;  Weeden's TelevisionRental, Inc., Plaintiffs-Appellants,v.TOWN OF CLYDE HILL, Defendant-Appellee.
No. 90-35237.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Dec. 5, 1990.Decided Oct. 24, 1991.

Before EUGENE A. WRIGHT, GOODWIN and NOONAN, Circuit Judges.

1
MEMORANDUM*

2
Arthur Weeden et al. appeal a summary judgment in their action for damages under 47 U.S.C. §§ 521-559 (1988), the Cable Communications Policy Act, and 42 U.S.C. § 1983 (1988).

3
In 1979, the Town of Clyde Hill granted a non-exclusive 15-year cable franchise to Weeden's Television Rental, Inc., owned by Arthur and Virginia Weeden.1  The original ordinance, which set out the Town's requirements for a cable system, provided that the company awarded the franchise would be required to maintain "a good and sufficient bond as determined by the Town."   The ordinance also provided that the franchise could be terminated for cause on 30-days' notice.   The Town later passed an amending ordinance specifying the bond amount at $60,000.   Ordinance 416.

4
In 1986, Weeden's asked the Town to modify the amount, arguing that because construction was ninety percent complete, a smaller bond would protect the Town.   Weeden's also argued that a smaller bond should be sufficient because comparable communities in the region required much smaller bond amounts for their cable franchisees.   The Town refused and eventually cancelled the franchise for failure to maintain the bond.   After unsuccessful efforts to persuade the Town to renew the franchise with a modified bond amount, Weeden's initiated this lawsuit.

5
In its suit, Weeden's alleged claims under the Cable Communications Policy Act, 47 U.S.C. §§ 521-559.   Weeden's also brought claims under 42 U.S.C. § 1983 for violations the Cable Act and of due process.   Weeden's later moved to amend the complaint to add section 1983 claims under the contracts clause and the first amendment.   The district court denied the motion to amend and granted summary judgment for the Town.   We affirm.

I. Cable Act Claims

6
The parties dispute whether Weeden's may use section 1983 to bring claims under the Cable Act.   The parties further dispute the merits of Weeden's Cable Act claims.

7
Parties injured when a state deprives them of rights "secured by the Constitution and laws" may sue under 42 U.S.C. § 1983 (1988).   Section 1983 is available when a state violates rights secured by federal statute.   Maine v. Thiboutot, 448 U.S. 1, 4-8 (1980).   The Supreme Court has held, however, that when "the remedial devices provided in a particular Act are sufficiently comprehensive, they may suffice to demonstrate congressional intent to preclude the remedy of suits under § 1983."   Middlesex County Sewerage Auth. v. National Sea Clammers Ass'n, 453 U.S. 1, 20 (1981).

8
Where a federal statute creates enforceable rights, a section 1983 action will lie against a state's political subdivisions unless the defendant can show that Congress intended the statute in question to provide the exclusive remedy.   Keaukaha-Panaewa Community Ass'n v. Hawaiian Homes Comm'n, 739 F.2d 1467, 1470-71 (9th Cir.1984);   see also Wright v. City of Roanoke Redevelopment and Housing Auth., 479 U.S. 418, 423-24 (1987).

9
The district court ruled that the Cable Act was a "comprehensive scheme" providing its own enforcement mechanisms, and that review under section 1983 was therefore precluded.   The court was examining Weeden's section 1983 claims alleging violations of sections 541, 544, 545, and 546 of the Cable Act.

10
Section 555 sets out a procedure by which cable operators may bring actions under sections 545 and 546.   The Act does not discuss judicial remedies for alleged violations of sections 541 and 544.   The parties break the section 1983 question into two parts:  (1) Whether a section 1983 action can exist for the sections of the Cable Act that do not mention judicial remedies;  and (2) Whether a section 1983 action can exist for the sections of the Cable Act that explicitly provide judicial remedies.

11
A. Sections of the Cable Act That Do Not Provide a Judicial Remedy--Sections 541 and 544

1. Section 1983

12
The Town cites two cases that found no implied private right of action for sections of the Cable Act that do not expressly provide for a judicial remedy.   See Cable Investments, Inc. v. Woolley, 680 F.Supp. 174, 178-80 (M.D.Pa.1987), aff'd on other grounds, 867 F.2d 151 (3d Cir.1989);   Rollins Cablevue, Inc. v. Saienni Enters., 633 F.Supp. 1315, 1317-20 (D.Del.1986).

13
This circuit has noted that a plaintiff must overcome a much higher burden to establish an implied private right of action than to establish a right to bring a section 1983 action.   To establish the former, the plaintiff must show congressional intent to create a private cause of action.   By contrast, courts presume the availability of a section 1983 cause of action, and the defendant has the burden of showing contrary congressional intent.   See Keaukaha-Panaewa, 739 F.2d at 1470-71.

14
Other courts have permitted section 1983 actions for sections of the Cable Act that do not provide their own judicial remedies.   See, e.g., Playboy Enters., Inc. v. Public Service Comm'n of P.R., 906 F.2d 25, 31-33 (1st Cir.1990), cert. denied, 111 S.Ct. 388 (1990) (permitting a section 1983 action regarding the Cable Act's provisions relieving operators of liability for the content of transmissions);   Van Meter v. Township of Maplewood, 696 F.Supp. 1024, 1027-28 (D.N.J.1988) (permitting a section 1983 action regarding the Cable Act's provisions on receiving satellite signals).   We need not decide this question, because we hold that Weeden's has raised no colorable claims under these sections.

2. Merits

15
Weeden's claims under sections 544(f)(1) and 541(a)(2) of the Cable Act concern restrictions placed on them by the Town.   Once Weeden's failed to renew its bond, the Town immediately barred the company from performing any new construction or adding new customers, even in areas where construction had been completed.   These restrictions were initially imposed when the bond first expired, before the franchise was terminated, and then were renewed when the Town decided to permit Weeden's to continue its existing operations after termination of the franchise.

16
Franchising authorities retain the power to enforce the terms of existing franchises, so long as those terms are not inconsistent with the Act.   Section 557 provides that the terms of existing franchises remain in effect.   Further, the House Report expressly states that matters not specifically covered in the legislation remain subject to state and local regulation, and that bonds are one such matter.   See House Report at 4696 ("matters subject to state and local regulation, and that bonds are one such matter.   See House Report at 4696 ("matters subject to state and local authority include, to the extent not addressed in the legislation, ... the enforcement and administration of a franchise (e.g., ... bonds, letters of credit, insurance and indemnification ...).").

17
The franchise at issue in this case included a provision permitting the Town to terminate for cause.   Under Weeden's interpretation, when faced with a violation of a franchise term, the Town could have terminated the franchise completely but could not have permitted the franchise to continue operations under some restrictions.   Nothing in the legislation appears to so restrict an authority's power to choose the means of enforcing a franchise.

18
B. Sections of the Cable Act Providing Judicial Remedies--545 and 546

1. Section 1983

19
Although there may be cases permitting section 1983 suits for violations of Cable Act sections that do not provide judicial remedies, we have been cited no case allowing § 1983 actions for violations of sections 545 and 546, where the Cable Act does provide a judicial remedy.   The Town argues that Weeden's should not be able to circumvent the procedures of section 555 by electing to sue under section 1983.   Section 555 establishes procedures that cable operators must follow to obtain judicial relief for violations of sections 545 and 546.

20
In Sea Clammers, the Court held that where a statute sets out specific procedures for pursuing private causes of action and the plaintiff fails to comply with those procedures, section 1983 is not available as an alternative remedy.   See 453 U.S. at 14.   If we were to allow a claim under section 1983 for the alleged violations of sections 545 and 546, we would render meaningless the specific procedural requirements of section 555.   We hold that section 1983 is not available for such claims.   Remedies for violations of sections 545 and 546 must be pursued in accordance with section 555.   We affirm the district court on this point.

2. Compliance with section 555

21
a. Renewal--Section 546

22
Section 555 provides that a cable operator adversely affected by a determination made under section 546 must commence an action within 120 days of a final determination.   The district court held that a "final determination" occurred either on May 6, 1986, when the Town Council voted to terminate Weeden's franchise, or on June 30, 1986, when the termination became effective.   Hence, the court concluded that Weeden's had failed to seek judicial review within 120 days of the final determination.   We find no error in this conclusion.

23
Construing the facts as alleged by Weeden's, Weeden's submitted a request, which it deemed a request for renewal, on June 30, 1986.   The Town treated the June 30 request as an application for a new franchise.   The town stated that it was soliciting other proposals, which were due on December 1, 1986, and that it would consider Weeden's proposal at that time.   Weeden's filed this action on December 3, 1986, after it became clear that the Town would not consider its proposal.

24
Weeden's argues that at the time it filed suit, the Town had made no final determination on its renewal proposal, and that its renewal claim did not violate section 555's 120-day limitation.

25
Construing all facts favorably to Weeden's, Weeden's had lost its franchise on June 30.   Because there was no longer an existing franchise, the Town was free to consider Weeden's new request a proposal for a new franchise, rather than a renewal proposal.   Therefore, Weeden's did not have a renewal proposal pending at the time it filed suit.   Weeden's did not file its action within 120 days of the Town's final action on its earlier proposals.   Weeden's renewal under section 555 was not timely.

26
b. Modification Request-Section 545

27
Section 555 provides that a cable operator adversely affected by a determination made under section 545 must commence an action within 120 days of a final determination.   As with the renewal provision, the parties dispute whether the action was brought within 120 days of a final determination.   Weeden's argues that under Washington law, a municipality such as Clyde Hill can act only through a formal vote, and that the Town Council never took a formal vote on the modification request.

28
At the May 6, 1986 Town Council meeting, the Council passed a formal resolution terminating the franchise.   Although the resolution did not explicitly refer to the request for modification of the bond, the minutes make clear that the Council was terminating the franchise because of Weeden's failure to post the $60,000 bond.   Therefore, a final determination regarding the modification request occurred on either May 6, 1986, the date of the vote, or June 30, 1986, the date the termination became effective.   Because Weeden's did not initiate its suit until December 1986, Weeden's failed to seek judicial review within the required 120 days.

II. Weeden's Constitutional Claims
A. Due Process

29
A cable television franchisee has a property right in its franchise that is entitled to due process protections.   See, e.g., Teleprompter of Erie, Inc. v. City of Erie, 537 F.Supp. 6, 11 (W.D.Penn.1981).   The Town does not dispute that Weeden's was entitled to due process in the termination of its franchise.   Rather, the Town argues that Weeden's was in fact afforded due process.   Weeden's asserts that the Town denied Weeden's a fair hearing, the right to confront witnesses, the right to see evidence that would be used against it, the right to notice of meetings, and the right to receive public comment after notice was provided to Town residents.

30
"At the core of the due process clause is the right to notice and a hearing 'at a meaningful time and in a meaningful manner.' "   Sinaloa Lake Owners Ass'n v. City of Simi Valley, 882 F.2d 1398, 1405 (9th Cir.1989) (quoting  Armstrong v. Manzo, 380 U.S. 545, 552 (1965)), cert. denied, 110 S.Ct. 1317 (1990).   Under Sinaloa Lake, the notice required by due process has at least two elements.   First, the notice must include notice of the hearing at which the plaintiff's rights will be determined.   Second, the notice must be sufficient to enable the plaintiffs to prepare for the hearing in a meaningful way.   See id; see also Memphis Light, Gas & Water Division v. Craft, 436 U.S. 1, 14 (1978) ("The purpose of notice under the Due Process Clause is to apprise the affected individual of, and permit adequate preparation for, an impending hearing.").

31
On January 27, 1986, the Town Administrator notified Weeden's that the bond had lapsed.   While this letter did not warn of a possible termination, or give notice of a hearing on Weeden's failure to maintain the bond, Weeden's had notice of their default and that the town was officially concerned.

32
On April 1, 1986, the Town Council voted to give Weeden's notice that unless it paid money due the Town, and filed evidence of a renewed bond by April 18, the franchise would be terminated.   On April 7, the Town notified Weeden's that if it did not file the bond by April 18, as well as make all payments due the Town by that date, the Town would terminate the franchise.   On April 21, 1986, the Town sent Weeden's a letter stating that the Town planned to proceed with termination of the franchise because Weeden's had failed to meet the April 18 deadline.   The letter explained that Weeden's could request the Town Council to reconsider the matter at its May 6, 1986 meeting.

33
At the May 6 meeting, the Town Council heard from Art Weeden and from Weeden's insurance broker.   The Council debated the question of termination and voted to approve a resolution terminating the franchise as of June 30, 1986.

34
We hold that Weeden's received adequate notice of the May 6 meeting, and that meeting met the requirement that Weeden's have an opportunity to be heard "in a meaningful manner."

35
Weeden's now complains that in deliberating, the Council weighed evidence of customer complaints about Weeden's service, as well as considered a survey which the Town alleged showed that 48% of cable subscribers were dissatisfied with Weeden's.   Weeden's also alleges that it was not permitted to see either the complaint file or the survey results before the Council voted on termination.   These matters were redundant.   The franchise agreement permitted the Town to terminate the franchise if Weeden's violated a franchise provision and maintaining the bond was a substantial requirement.   On this record, the trial court correctly held that the Town could terminate the franchise solely because of the bond default.   Therefore, the Town Council did not deny Weeden's due process, even if it failed to give Weeden's access to the complaint file and survey results prior to terminating the franchise.   Weeden's had notice and an opportunity to be heard on its failure to maintain the bond, which failure provided the Town with sufficient grounds for terminating the franchise.   Therefore, Weeden's received all the process that was due.

36
B. First Amendment and Contract Clause Claims

37
The trial court denied Weeden's motion to amend its complaint to allege violations of the first amendment and the contracts clause.   We review a district court's denial of a motion to amend for an abuse of discretion.   Under this standard, "the district court's discretion cannot be reversed unless this court has a definite and firm conviction that the court below committed a clear error of judgment in the conclusion it reached upon a weighing of the relevant factors."   Parker v. Joe Lujan Enters., Inc., 848 F.2d 118, 121 (9th Cir.1988).   The district court did not abuse its discretion in denying Weeden's motion, which was filed three years after the proceedings began.

38
A number of additional points were briefed and argued but none overcomes the decisive fact that Weeden's had defaulted on the bonding requirement and that the Town terminated the franchise after notice and hearing.

39
AFFIRMED.

*
 This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3

1
 Appellants will be referred to jointly as Weeden's


44 F.Supp. 940 (1942)
UNITED STATES
v.
CORLIN et al.
No. 14806-Y.
District Court, S. D. California, Central Division.
April 27, 1942.
*941 *942 *943 Wm. Fleet Palmer, U. S. Atty., Norman W. Neukom, Asst. U. S. Atty., and Ralph E. Lazarus, Asst. U. S. Atty., all of Los Angeles, Cal., for the Government.
Ames Peterson, of Los Angeles, Cal., for defendant Corlin.
David H. Cannon, of Los Angeles, Cal., for defendants Rockwell and Frankfort.
Ben L. Blue, of Los Angeles, Cal., for defendants Berliner, Coleman, Edelman, Friedman, Kay, Landfield, Nudelman, Pereira, Rubins, and Milo.
YANKWICH, District Judge (after stating the facts as above).
In announcing the decision in this case, I desire to advert briefly to some fundamental legal principles which govern prosecutions under the mail fraud statute (18 U.S.C.A. § 338).
The aim of the statute is to punish the use of the mails in furtherance of schemes to defraud. And, while it is said generally that the gist of the offense is the use of the mails, the statement means nothing more than that the basis for federal intervention lies in the use of the mails. For, without it, constitutional power would be lacking in the Federal Government to punish frauds which, by their nature, are localized and do not partake of an interstate character. A scheme to defraud is, of course, the first element of the offense. Without it, the use of the mails would not be illegal. United States v. Young, 1914, 232 U.S. 155, 34 S.Ct. 303, 58 L.Ed. 548; Havener v. United States, 10 Cir., 1931, 49 F.2d 196. In Postal Decisions, 1939, page 237, we find this summary of the necessity for, and the meaning of, a "scheme to defraud": "Devising of scheme.  The devising of some scheme or artifice to defraud, or to obtain money or property by fraudulent representations, etc., is the first ingredient of the offense, which becomes punishable when the mails are used in its execution or attempted execution. The words `intending to devise' are the legal scales by which the scheme is to be weighed, and require that the intent and scheme to defraud shall exist at the time the mails are used. To devise a scheme or artifice to defraud is to form a plan, device, or trick to perpetrate a fraud upon another, and devising of it continues as long as the scheme is in process of execution. It is not necessary that accused by the inventor or originator of the scheme or artifice, which may be as old as falsehood, or that when the artifice was devised the schemers should have worked out all the details of its execution."
In United States v. Dexter, D.C.Iowa 1907, 154 F. 890, 896, a "scheme" is defined: "A `scheme' may be said to be a design or plan formed to accomplish some purpose. An `artifice' may be said to be an ingenious contrivance or device of some kind, and when used in a bad sense the word corresponds with `trick' or `fraud.' Hence a `scheme or artifice' to defraud, within the meaning of this statute, would be to form some plan or devise some trick to perpetrate a fraud upon another."
No person can be convicted of the offense unless it be shown, beyond a reasonable doubt, that he, knowingly, devised a scheme to defraud and that the mails were used in furtherance of it. The offense is one requiring specific intent. Without it, the offense cannot be committed. Because of this, good faith of the accused is a complete defense.
As one court has stated: "The ultimate issue of fact was whether defendants were actuated by an intent to defraud when using the mails." Sandals v. United States, 6 Cir., 1914, 213 F. 569, 574. In the same opinion we find this language:
"A man may be visionary in his plans and believe that they will succeed, and yet, in spite of their ultimate failure, be incapable of committing conscious fraud. Human credulity may include among its victims even the supposed imposter. If the men accused in the instant case really entertained the conviction throughout that the oil properties and the stock in dispute possessed merits corresponding with their representations, they did not commit the offense charged. As Mr. Justice Brewer *944 said in Durland v. United States, 161 U.S. 306, 313, 16 S.Ct. 508, 511 (40 L.Ed. 709):
"`The significant fact is the intent and purpose. The question presented by this indictment to the jury was not, as counsel insists, whether the business scheme suggested in this bond was practicable or not. If the testimony had shown that this Provident Company, and the defendant, as its president, had entered in good faith upon that business, believing that out of the moneys received they could by investment or otherwise make enough to justify the promised returns, no conviction could be sustained, no matter how visionary might seem the scheme.'
"In Rudd v. United States [8 Cir.], 173 F. 912, 913, 97 C.C.A. 462, 463, the scheme to defraud and the circulars sent through the mails to promote it concerned a machine designed as an attachment to a pump for lifting water, which was shown to be `contrary to well-known fundamental physical laws.' In respect of the defense of honest belief in the efficiency of the machine, Judge Hook said:
"`The main defense was that, though the machine may have been impracticable, the accused honestly believed in its efficiency, and that what he did was without intent to defraud. Of course, if this was so, there was no violation of the law which was designed to prevent the use of the post office in intentional efforts to despoil.'"
See, also, Harrison v. United States, 6 Cir., 1912, 200 F. 662; Gold v. United States, 8 Cir., 1929, 36 F.2d 16, 32.
In some respects, this case is unique.
Ordinarily, in cases of this character, involving misrepresentations in sales, we find, as defendants, all the officers of the Company who have a proprietary interest in its assets, to which are, often, added some of the most prominent of the salesmen who profited mostly from the sales. Here, however, only one of the officers of the company, Corlin, is selected for prosecution. The other officer, who is, practically, a fifty per cent owner of the business of the land company, appears in an inculpatory role. None of the employees actually in charge of the office is prosecuted, although most of them are brought in to testify for the Government, as to the misdeeds of the one accused owner. The result is an indictment, which originally contained thirty-one counts of mail fraud violation and one count of conspiracy (18 U.S.C.A. § 88) and seventeen defendants. With the dismissal of five of the counts by the Government and of the conspiracy count by the Court, there still remain twenty-six counts. The number of defendants actually on trial has been reduced to fourteen. As to two, the Government has dismissed, the other entered a plea of nolo contendere. Thus, of all the defendants before the Court, in this case, only one has a proprietary interest in the business. The others were salesmen.
So we have the unusual situation of one officer and stockholder of a land-owning company, which has existed and operated for a long period of years, being charged with devising a scheme with his salesmen to use the mails to defraud. Singularly, as one of Government counsel conceded, there is no direct evidence of any sales meetings at which anyone, either a salesman-defendant or the owner-defendant, gave any instructions to any of the salesmen along the line charged in the indictment.
Yet the Government would fasten criminality on the owner-defendant and all these agents for the acts of the others upon inferences to be drawn from the fact that they made representations of the same character. This anomalous situation has resulted in the suggestion made by counsel for the Government, in the closing argument, that, because of the absence of concert of action between these various salesmen-defendants, perhaps, each of them should be found guilty only on the counts which specifically referred to him. This suggestion is but the measure of the weakness of the Government's position. The scheme to defraud is pleaded in Count One and is embodied, by reference, in the preamble to every count in the indictment. And the indictment, in each count, charges not separate defendants with a scheme to defraud and the mailing of the particular letter, but each and all of them. The individual sale, through the use of the mails, to be criminally actionable, must refer back to the scheme. And a verdict which would find certain defendants guilty only as to certain transactions which they handled would, in itself, negate the existence of the scheme. For, if there be a fraudulent scheme to which the defendants were knowingly parties, each is liable for the acts of the others. See, Robinson *945 v. United States, 9 Cir., 1929, 33 F. 2d 238, 240; Bogy v. United States, 6 Cir., 1938, 96 F.2d 734, 741; Alexander v. United States, 8 Cir., 1938, 95 F.2d 873, 878, 880; Baker v. United States, 8 Cir., 1940, 115 F.2d 533, 540. On the other hand, if each defendant is guilty only in relation to the sale which he made, then we have not one scheme, but as many schemes as there are defendants. Individual representations, unrelated to each other, and not a part of a scheme to defraud, cannot be given the dignity of a scheme to defraud. See, Rude v. United States, 1935, 10 Cir., 74 F.2d 673.
It is thus axiomatic that before any of the defendants can be found guilty, there must be shown, beyond a reasonable doubt, that a scheme to defraud through the use of the mails was devised by them or some of them in which they all participated. And the scheme must be proved substantially as laid. Hass v. United States, 8 Cir., 1938, 93 F.2d 427, 435; Rude v. United States, 10 Cir., 1935, 74 F.2d 673, 677. The indictment has laid the scheme within a narrow compass, both as to time and character. The beginning of the scheme is laid in the indictment as "on or about the year 1937 and thereafter to and including the date of the finding and presentation of this indictment," (February 26, 1941). Where the continuity of a scheme is relied on, the Government is not limited strictly, in point of time, to the starting point it chooses to designate in the indictment. But here the Government has circumscribed itself to the period it chose, through the evidence it offered.
To prove the formation of the scheme, the Government leaned heavily upon Mr. H. C. Schultz, a member of the Bar for many years, who, evidently, devoted most of his activities to business enterprises. He was associated with the defendant Corlin in the ownership of the Clevelin Realty Co. which was named for him  Clevelin being his middle name  for a long period of years. However, Schultz, while endeavoring to inculpate the defendant Corlin, denies that the activities in selling club memberships as an inducement to the purchase of real estate, after the contract entered into by the Company and Norman B. Frankfort and Milton S. Frankfort on May 26, 1937, and the subsequent agreement with the same parties in January, 1938, both of which he executed, had anything fraudulent about them. He emphatically states that he not only signed, but that he also drew the agreements after discussions with the Frankfort brothers and the defendant Corlin and did not write into either anything which he considered fraudulent.
Examination of the contracts confirms this. The first contract shows clearly that the club memberships were to be used as an inducement to sell real estate, as the whole income from the sale of the associate club memberships was to be retained by the sellers. And they were to receive fifty percent from the sale of life memberships which carried with it the right to a lot. Similar provisions, with different percentages, are contained in the 1938 contract. Schultz states that nothing to which he could make any objection occurred prior to the appearance of the Frankfort Brothers on the scene. The Government, by offering him as a witness, represents him as worthy of credit. See, Dravo v. Fabel, 1889, 132 U.S. 487, 490, 10 S.Ct. 170, 33 L.Ed. 421. It cannot be heard to charge, as it did in the argument, that, perhaps, Schultz was also a party to the fraudulent scheme. I prefer to think that he told the truth, in this respect, and that there is nothing in the actions of the company, of which he was half-owner, prior to and including these contracts, of an objectionable character.
The facts in the record warrant this conclusion. For we find a history of sales of memberships long ante-dating the arrival of the Frankforts and Rockwell on the scene  memberships which, like those under scrutiny here, contained a valuation on their face, in different amounts depending on the privileges to be enjoyed by the member. We find Schultz participating in devising the forms, although objecting to some of the clauses. These contracts show a variation in the price of memberships, depending upon the privileges to be secured.
The facilities to be offered were facilities actually existing and owned by the company. The Club has been actually in operation for over ten years. From descriptions and photographs it appears to be a club of some pretention, with varied facilities, the like of which are found in clubs located on lake shores in this and other parts of the country. Actually, the undisputed evidence is that some $200,000 had been expended by the Club on the facilities. And, while the indictment charges that the membership was of little or no value, the evidence is the *946 other way. At one stage of the case, when it was disclosed that the club only had nineteen sleeping rooms, six of which were occupied by employees, I thought, perhaps, that the essence of the scheme might lie in the fact that, with the sale of a large number of memberships, it could be inferred that such a promise would be impossible of performance and might be considered fraudulent. But a re-examination of the indictment disclosed that this was not charged as a part of the scheme. More, in the contract of January, 1938, signed by Schultz, there was a guarantee on the part of the Frankforts to sell not less than 1,200 memberships and not less than 500 life membership privileges annually commencing January 2, 1938, and not less than 800 life membership privileges per annum thereafter. Clearly, Schultz, who is vouched for by the Government, did not contemplate a fraudulent scheme through these clauses.
Much has been made of the fact that these memberships carried a valuation on their face. Since the case was argued, I have re-examined all the certificates of membership introduced in evidence ranging in price from $250 to $750, some of them dating back to the time when Schultz participated actively in the affairs of the company. And I find each of them had such valuation. Each of them contained a provision calling for the payment of that amount for the membership. In the specimens which were exhibited in court as having been sold to various persons, who appeared as witnesses, a large stamp in red type placed next to the price mark, and, sometimes, across the body of the contract stated the entire cost of membership and broke down the total figures to the items for which the charge is made, including, each time, a maintenance fee. We do not know when the system originated. It is not charged that the instrument, in the manner in which it was worded, was a deceit. Perhaps, if the actual price had not been superimposed upon each contract and the clause requiring payment of the face value had not been cancelled in a manner which is noticeable to anyone looking at the contract, it might well be argued that the idea of placing a large valuation on membership was intended to deceive. But here, again, we cannot ground conviction on suppositions or suspicions. Read v. United States, 8 Cir., 1927, 42 F.2d 636; Eng Jung v. United States, 3 Cir., 1930, 46 F.2d 66; Cox v. United States, 8 Cir., 1938, 96 F.2d 41; Mazurosky v. United States, 9 Cir., 1939, 100 F.2d 958. More, the Government has not charged this as of the essence of the scheme.
Significantly, also, these contracts, in addition to the usual clause stating that no representations had been made, contained the following clause: "11. This membership privilege is transferable by inheritance or by resale to a person of the White or Caucasian Race over twenty-one years of age, acceptable to said Club and subject to the restrictions and transfer provisions of said Club, but no transfer will be approved before twelve months from date of issue, except by special action of the Board of Directors." This was printed in bold face type in every form of membership contract. It may be conceded that a clause of this character does not stand in the way of proving a fraudulent scheme. But when we are dealing with a charge of felony, and we find that, over a long period of years, the owners of property have sought to protect themselves against irresponsible agents by a clause of this character, which appeared in bold face type in every contract, and that copies of these contracts were exhibited to, or left with, or read by the buyers, it would do violence to the rule which refuses to apply the law of civil agency to criminal cases, to allow purchasers, who buy under a contract which states clearly the conditions under which resales can be made, to fasten criminality on the principal by claiming a promise made by an agent in direct violation of the delimitation of authority clearly contained in the contract.
The principle I have in mind is that there is no criminal responsibility of a principal for the acts of his agent unless the principal knowingly and intentionally aids, advises, or encourages the criminal act committed by the agent. People v. Armentrout, 1931, 118 Cal.App.Supp. 761, 1 P.2d 556. In Nobile v. United States, 3 Cir., 1932, 284 F. 253, 255, the Court said: "Criminal liability of a principal or master for the act of his agent or servant does not extend so far as his civil liability. He cannot be held criminally for the acts of his agent, contrary to his orders, and without authority, express or implied, merely because it is in the course of his business and within the scope of the agent's employment, though he might be liable civilly." (Italics added) And see my opinion in United States v. Food and Grocery Bureau of *947 Southern California, D. C., 1942, 43 F.Supp. 966.
I am stressing this point because, in the closing argument, counsel for the Government indicated a willingness to rest the case upon the promises or resale and the promises of interest in, or dividends from, water rights, alleged to have been made by some of the salesmen-defendants. But the difficulty is that even if it be assumed that certain salesmen did make these representations, they would have no significance, unless they were a part of a scheme to defraud. Except in instances where two salesmen were together, there is no showing of any concert of action by the salesmen with one another, or with the owner-defendant. And clearly, a scheme to defraud cannot be inferred from mere similarity of promises by persons who have no responsibility to each other. It is true, of course, that if it be shown beyond a reasonable doubt, that some of the defendants, such as the defendants Frankfort, Rockwell and Corlin, originated the scheme, then each of the other defendants who, knowing its fraudulent nature, helped in furthering it, would be guilty. See, Lefco v. United States, 3 Cir., 1934, 74 F.2d 66, 68, 69; Cossack v. United States, 9 Cir., 1936, 82 F.2d 214; Lee Dip v. United States, 9 Cir., 92 F.2d 802, 803.
But the evidence does not prove the existence of such scheme. The contrary, in fact, is shown. Every salesman who testified, including W. W. Clark, who entered a plea of nolo contendere, stated that the instruction of the owner-defendant Corlin, when he employed him, was to go out and see the property. Relating his conversation with Corlin, Clark testified:
"Q. Incidentally, Mr. Clark, how long have you been in the real estate business? A. Oh, approximately since around 1922.
"Q. Do you recall having a conversation with the Defendant Abe Corlin around January of 1939? A. Yes, sir.
"Q. Where did that conversation take place? A. In his office.
"Q. That was located where? A. I believe 740 South Broadway.
"Q. Who was present besides yourself and Mr. Corlin, if anyone? A. Nobody, sir.
"Q. Now, Mr. Clark, relate that conversation that you had at that time as best you can remember it now. A. Well, it so happened to be at that time that I was in business in Palm Springs. Due to adverse business conditions, my business was failing. In fact, I had to fold up and go out of business. I came to Los Angeles to see if I could make any contacts here. I learned there was a position open with the Elsinore Recording Company collecting delinquent accounts.
"I approached Mr. Corlin  I had met Mr. Corlin in 1935  introduced myself, and asked him if there was such a position open, or if I could secure a position with him; that I had formerly acted as collector here in Los Angeles and I thought that I could bring up some of the delinquent accounts. He said there was no opportunity at that time, that business was very poor with him, that he couldn't afford to pay a salary, but they were at that time selling memberships in what was known as the Aloha Beach Club and Country Club, and that some of the boys were making a pretty good living at it. He said if I cared to enter into the sale of memberships that I could probably make a better living than working as a collector.
"I also mentioned the fact to him that I wasn't quite ready at that time, that I hadn't completed my business at Palm Springs.
"He said: `Well, we suggest when you go back to Palm Springs, that you go around by the way of the Club and take a look at the property, and if at the time you close your affairs, you feel that you still want to go to work for us, why, drop in and see us and we will see what we can do for you.' * * *
"Q. Now, you did thereafter go down to Palm Springs, did you not, Mr. Clark? A. Yes, sir.
"Q. On the way back you looked over the premises of the Lake Elsinore Country Club, and you found a pretty nice edifice, there, did you not? A. Yes, sir, I certainly did.
"Q. And after you returned to Los Angeles, Mr. Clark, did you have a conversation, a further conversation, with Mr. Corlin? A. Yes.
"Q. Approximately when? A. Some time the latter part of January or February of that year.
"Q. All right. Now, tell me who was present when you first saw Mr. Corlin in *948 January or February of that year after returning from Palm Springs. A. Mr. Corlin.
"Q. Relate that conversation, as best you can remember it. A. I told Mr. Corlin that I had been down to Palm Springs and closed up my business, and that I stopped by the Club and saw it, and it was a very beautiful-looking affair, and I felt I should like to go to work under the terms and conditions that he previously mentioned on my last trip up to Los Angeles. And he said, `Well, I guess he could work it out all right.' He said that I could get ready and go to work." [Volume 1, Official Transcript, p. 137, line 18 to page 141, line 13.] (Italics added)
The salesmen were given a kit, for which they had to pay, and were urged to go out and sell on the basis of what was contained in the kit and what they saw.
They all denied any intention to defraud. Not only did they deny that Corlin suggested that they make any fraudulent promises, but they actually testified to their own belief in the value of what they were selling.
There is evidence in the record showing that certain complaints were called to the attention of Corlin. I do not believe that we can retroject his failure to act into the past in order to charge him with the conception of a scheme, in 1937 or prior thereto, at a time when his co-owner of the business, Schultz, states positively that nothing fraudulent was contemplated.
As said by Judge Learned Hand in United States v. Dellaro, 2 Cir., 1938, 99 F.2d 781, 783: "Inaction is of course acquiescence, but acquiescence is passive, and to become a party to a crime one must affirmatively unite oneself with the venture, or, in the case of a conspiracy, must agree to take some part in it."
If there were misrepresentations, they were separate and individual misrepresentations of different persons employed at different times (see, Rude v. United States, 10 Cir., 1935, 74 F.2d 673), each acting for himself, made without the authorization of the other defendants and in direct repudiation of the positive limitation of authority which the owner-defendant, for his own protection, had caused to be inserted in the contract. See, Nobile v. United States, 3 Cir., 1922, 284 F. 253, 255; Paschen v. United States, 7 Cir., 1924, 70 F.2d 491, 503. At best, they were, in essence, matters punishable by local state law.
But, even in this respect, it is significant that, despite many voiced dissatisfactions, state authorities took no action. Even after the arrest in Oakland of Corlin and of the two salesmen who seem to be "the head and front of the offending", according to the Government's theory, on complaint of one of the buyers, they were released, without any charge being lodged against them, after three days' detention.
The idea of giving away memberships as an advertising medium originated during the Schultz regime. Inherently, there was nothing fraudulent about it. Through the perspective of distance "award" may readily become "prize", as some of the purchasers testified. But there was selection of certain cards for certain districts. And there is no showing that the selection was deliberate so as to "catch" persons who would not use the memberships. A long residence in California, which extends over both the northern and southern part of the State, has made it evident to me that its humblest citizens avail themselves of its recreational facilities, regardless of distance.
When the City of Los Angeles maintains free summer camps in the Mono Lake district, three hundred miles away from Los Angeles, to which wage earners not only gladly travel, but scramble for the privilege of one week's stay, it cannot be argued that the sale to a resident of Northern California or Arizona of a membership in a country club, situated in a climate different from theirs, with swimming, boating and other facilities, open to the buyer, his family or friends, had the badge of fraud.
More, the indictment does not make the charge in this broad manner. It limits it to the failure to hold a drawing.
I think the representation was substantially true. At least, I hesitate to ground a conviction of felony upon the fine distinction between "an award" and "a prize" or between "a drawing" and "a selection".
The representation as to the members being potential water users was also evolved during the Schultz regime. At least, it was discussed with him and notice of the possibility of such use was stamped across some of the membership forms either prepared by Schultz or used with his knowledge.
*949 So, as the Government vouches for his integrity, I have the right to assume that he would not have sanctioned this feature, had it had any of the earmarks of fraud.
Any exaggerations by individual salesmen were not in pursuance of any scheme to defraud. See, Harrison v. United States, 6 Cir., 1912, 200 F. 662.
I add that the sales of memberships resulted, ultimately, in loss to the Company. When receipts were distributed to the stockholders, Schultz was one of the recipients. And if, as he claims, money is still due him, the owner-defendant Corlin has a similar claim.
I know, of course, that the success or insuccess of a scheme is not material' if it be devised to defraud. Hass v. United States, 8 Cir., 1938, 93 F.2d 427, 432; Muench v. United States, 8 Cir., 1938, 96 F.2d 332, 336; Norman v. United States, 6 Cir., 1939, 100 F.2d 905, 907.
But when the Government, to prove bad faith, seeks to show what was realized from the sales, losses resulting to the selling concern are as important on the question of good faith. For a going real estate concern would not, ordinarily' engage, over a period of years, in a losing enterprise, if its object be fraud. And the amounts received by the salesmen did not exceed reasonable salaries.
Here I stop.
The arduous task imposed upon me by the trial of this case without a jury for a period of three weeks, with long sessions, makes it impossible, within the short time I have allowed myself since the closing of the arguments, to discuss' in greater detail' some of the other elements of deception which have been pleaded in the indictment or stressed in the argument. In what I have just said I have covered the most important phases. And I have sought to indicate why, in my opinion, after a thorough consideration of all the evidence in the case, in the light of the principles of law governing cases of this character, I am of the view that the Government has failed to prove, beyond a reasonable doubt, that any of the defendants is guilty of the crime charged in the indictment.
I, therefore, find the defendants Abe Corlin, Murray A. Berliner, Joe Coleman, Leo H. Edelman, Milton S. Frankfort, Fred Friedman, H. A. Kay, Philip E. Landfield, Jay Joseph Nudelman, Aubrey Pereira, Harry Rockwell, Sam Rubins, Leo F. Strong, Stephen Milo, and each of them, not guilty as charged in Counts 1, 2, 3, 5, 6, 7, 8, 9, 10, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29 of the indictment.


                              UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                              No. 13-2070

STANLEY M. GRABILL, JR.,

                Plaintiff - Appellant,

          v.

CORIZON, INC., f/k/a Correctional Medical Services, Inc.,

                Defendant - Appellee.

Appeal from the United States District Court for the District of
Maryland, at Baltimore.      James K. Bredar, District Judge.
(1:13-cv-00039-JKB)

Submitted:   March 27, 2014                 Decided:   April 9, 2014

Before DUNCAN, FLOYD, and THACKER, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Gregory L. Lockwood, TREANOR POPE & HUGHES, P.A., Towson,
Maryland, for Appellant.    Philip M. Andrews, Mary Beth Smith,
KRAMON & GRAHAM, P.A., Baltimore, Maryland, for Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

           Stanley M. Grabill, Jr., appeals the district court’s

order   granting   Corizon,    Incorporated’s    motion   to   dismiss    and

dismissing the complaint for failing to sufficiently comply with

Md. Code Ann., Cts. & Jud. Proc. § 3-2A-04(b).            We have reviewed

the record and the district court’s memorandum, and affirm for

the reasons cited by the district court.            Grabill v. Corizon,

Inc., No. 1:13-cv-00039-JKB (D. Md. Aug. 1, 2013).               We dispense

with oral argument because the facts and legal contentions are

adequately    presented   in   the   materials   before   this    court   and

argument would not aid the decisional process.

                                                                    AFFIRMED

                                      2


743 F.Supp.2d 744 (2010)
In re REGIONS MORGAN KEEGAN SECURITIES, DERIVATIVE, and Erisa Litigation.
In re Regions Morgan Keegan Open-End Mutual Fund Litigation.
Case No. 07-2784 MDL 2009.
United States District Court, W.D. Tennessee, Western Division.
September 30, 2010.
*749 Carolyn Glass Anderson, Kirsten D. Hedberg, Timothy J. Becker, Zimmerman Reed, PLLP, Gregg M. Fishbein, Richard A. Lockridge, Lockridge Grindal Nauen PLLP, Thomas V. Seifert, Vernon J. Vander Weide, Head Seifert & Vander Weide, P.C., Minneapolis, MN, Charles Durham Reaves, Jerome A. Broadhurst, Apperson Crump, PLC, Memphis, TN, B. J. Wade, Deal Cooper & Holton PLLC, Memphis, TN, Mark P. Chalos, Lieff Cabrasher Heimann & Bernstein, LLP, Nashville, TN, for Plaintiffs.
Matthew M. Curley, Michael L. Dagley, Bass Berry & Sims PLC, Nashville, TN, Michael A. Brady, Shepherd D. Tate, Bass Berry & Sims PLC, Eugene J. Podesta, Jr., Leo Maurice Bearman, Jr., Baker Donelson Bearman Caldwell & Berkowitz, Memphis, TN, David B. Tulchin, D. Andrew Pietro, David E. Swarts, Sullivan & Cromwell, LLP, Kevin C. Logue, Paul Hastings Janofsky & Walker, LLP, Asa R. Danes, Seeger Weiss LLP, New York, NY, Peter S. Fruin, Maynard Cooper & Gale, PC, Birmingham, AL, Steven Lawrence Polk, Sutherland Asbill & Brennan LLP, Atlanta, GA, Jeffrey B. Maletta, Nicole A. Baker, K & L Gates LLP, Washington, DC, Emily Nicklin, Kristopher S. Ritter, Timothy A. Duffy, Kirkland & Ellis LLP, Chicago, IL, for Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTIONS TO DISMISS
SAMUEL H. MAYS, JR., District Judge.
Before the Court are Defendants' February 11 and 12, 2010 Motions to Dismiss the Consolidated Amended Class Action Complaint ("CAC"). (See ECF. Nos. 222, 226-29, 233.) The Lead Plaintiffs filed a Consolidated Response in Opposition on April 13, 2010. (See ECF No. 238.) Defendants filed their Replies on May 28, 2010, and June 4, 2010. (See ECF. Nos. 246-47, 249-51, 253.) Plaintiffs filed a Consolidated Sur-Reply on July 6, 2010. (See ECF No. 265.) For the following reasons, Defendants' Motions are GRANTED IN PART AND DENIED IN PART.

I. BACKGROUND
Plaintiffs' CAC exceeds four hundred pages, comprising 766 paragraphs and six appendices. The following is a necessarily brief summary of the named parties in this action and the Plaintiffs' claims.
Plaintiffs Kathryn S. Cashdollar Estate, Dajalis Ltd., Jeanette H. Landers, H. Austin Landers, and Frank D. Tutor are the Lead Plaintiffs for the Open-End Fund Litigation. (CAC ¶ 35.) The Lead Plaintiffs allege that they represent a purported class of individuals who purchased one or more classes of shares in the Regions Morgan Keegan Select Short Term Bond Fund ("Short Term Fund"), the Regions Morgan Keegan Select Intermediate Bond Fund ("Intermediate Fund"), and/or the Regions Morgan Keegan Select High Income Fund ("High Income Fund" and collectively the "Funds") from December 6, 2004 through *750 December 6, 2007 (the "class period"). (Id. ¶ 2(a)(1).) Plaintiffs also assert that they represent those "[w]ho refrained from redeeming the Funds' shares during the period from March 1, 2007 through April 30, 2008." (Id. ¶ 2(a)(2).) Plaintiff John R.S. Robilio seeks to represent a Fiduciary Subclass that includes persons who are members of the primary class and 1) are beneficiaries of trusts or other custodial accounts for which certain Defendants acted as fiduciaries and made investments on the beneficiaries' behalf or 2) who acquired a beneficial ownership of shares in the Funds because of certain Defendants' decisions made as trustee or custodian of these Plaintiffs' accounts. (Id. ¶¶ 33, 107.) During the class period, the named Plaintiffs invested more than $4.5 million in the Funds and "refrained from redeeming" more than $7 million in investments in the Funds. (Id. ¶ 34.)
Defendant Morgan Keegan Select Fund, Inc. ("MK Select") is a Maryland Corporation organized as a open-end management investment company under the Investment Company Act of 1940, 15 U.S.C. §§ 80a-1 et seq. (CAC ¶ 36.) MK Select consisted of three portfolios; namely, the three Funds. (Id.) The Intermediate and High Income Funds opened for investment on March 22, 1999, and the Short Term Fund opened on November 4, 2001. (Id. ¶ 37.) The High Income Fund closed to new investors in December 2002; however, existing shareholders of the High Income Fund could increase their investments by purchasing additional shares. (Id.) Because of the "catastrophic decline" in the Funds' assets during 2007-2008, MK Select and the Funds were liquidated on June 15, 2009. (Id. ¶ 39.) MK Select filed an application with the Securities and Exchange Commission to deregister as an investment company on July 28, 2009. (Id.)
Defendant Morgan Asset Management ("MAM") is a registered investment advisor with its principal place of business in Memphis, Tennessee. MAM is a wholly-owned subsidiary of Defendant MK Holding, Inc. ("MK Holding"). (Id. ¶ 40.) MAM managed the Funds' portfolio of securities, including making purchases or sales of securities consistent with the Funds' investment objectives. (Id.) The Advisory Agreement between MAM and the Funds required MAM to provide the Funds with office space and the executive personnel necessary to operate the Funds; however, Defendant Morgan Keegan & Co., Inc. ("Morgan Keegan") actually provided those services. (Id.) The Agreement also required MAM to provide the Funds' officers and Board of Directors with various reports and statistical information. (Id.) MAM and/or Morgan Keegan compensated those officers and directors who also were employees of MAM or Morgan Keegan. (Id. ¶ 41.) MAM received an annual management fee for its services based on the average daily net assets of the Funds. The more money invested in the Funds, the higher the fee MAM received. (Id.)
Defendant Morgan Keegan is a full service broker/dealer with its principal place of business in Memphis, Tennessee. (Id. ¶ 45.) Morgan Keegan provided an employee to serve as the Funds' chief compliance officer and provided portfolio accounting services to the Funds. It also received an annual fee based on the Funds' average daily net assets for those services. (Id.) Morgan Keegan is a wholly-owned subsidiary of Defendant Regions Financial Corporation ("Regions"), a Delaware corporation with its principal place of business in Birmingham, Alabama. (Id. ¶ 48.) Regions is also the ultimate parent company of MK Holding and MAM. (Id.) Regions marketed shares of the Funds through two subsidiaries, Morgan Keegan and Defendant Regions Bank. (Id. ¶¶ 49, 53.) Regions Bank maintains Defendant *751 Regions Morgan Keegan Trust FSB ("Regions Morgan Keegan Trust"), a federally chartered savings bank formerly known as Morgan Keegan Trust Company, as its trust department. (Id. ¶ 54.) Regions Morgan Keegan Trust served as a fiduciary on behalf of its customers. Under an April 1, 2003 agreement, MAM provided investment advisory services to Regions Bank and Regions Morgan Keegan Trust (collectively "RMK Trust"). (Id.)
Defendants Allen B. Morgan, Jr.; J. Kenneth Alderman; Jack R. Blair; Albert C. Johnson; James Stillman R. McFadden; W. Randall Pittman; Mary S. Stone; and Archie W. Willis, III, were directors of the Funds. (Id. ¶¶ 59-67.) Morgan also served as a director and vice-chairman of Regions, a director of MAM, and chairman and CEO of Morgan Keegan. (Id. ¶ 59.) Alderman served as CEO of MAM and has served as an executive vice president of Regions, president of RMK Trust, and vice chairman and CEO of MAM. (Id. ¶ 60.) Johnson, McFadden, Pittman, and Stone served as members of MK Select's audit committee. (Id. ¶ 69.)
Defendants Carter E. Anthony, Brian B. Sullivan, Joseph C. Weller, J. Thompson Weller,[1] G. Douglas Edwards, Charles D. Maxwell, David M. George, and Michele F. Wood served as officers of the Funds. (Id. ¶¶ 75-82.) Anthony served as the Funds' president from 2003 until August 2006. (Id. ¶ 75.) He also was president and chief investment officer of MAM from 2002-2006. (Id.) Sullivan succeeded Anthony as the Funds' president. (Id. ¶ 76.) Joseph C. and J. Thompson Weller served as treasurer. (Id. ¶¶ 77-78.) Both also held executive roles at Morgan Keegan. (Id.) Edwards, a twenty-five year veteran of Morgan Keegan, served as the investment bank's CEO from 2003 until his resignation in April 2008. Before becoming CEO, Edwards had served as Morgan Keegan's president from 2001-2003. (Id. ¶ 79.) Maxwell was the Funds' secretary and, from 2006, served as the executive managing director, chief financial officer, treasurer, and secretary of Morgan Keegan. (Id. ¶ 80.) David M. George was the Funds' chief compliance officer until 2006 and was Morgan Keegan's senior vice president. (Id. ¶ 81.) Wood succeeded George as chief compliance officer. (Id. ¶ 82.) She also served as MAM's chief compliance officer, and her salary was paid solely by Morgan Keegan. (Id.)
Defendant James C. Kelsoe, Jr., a chartered financial analyst, served as MAM's and the Funds' senior portfolio manager. Kelsoe also was employed by Morgan Keegan and was registered with the Financial Industry Regulatory Authority as a representative of Morgan Keegan. (Id. ¶ 83.) Defendant David H. Tannehill, also a chartered financial analyst, assisted Kelsoe as a portfolio manager for the Funds and MAM. (Id. ¶ 84.) Kelsoe and Tannehill were eligible to receive annual cash bonuses that could equal fifty percent of their base salaries. (Id. ¶ 86.) The performance of the Funds relative to their benchmark index determined part of Kelsoe's and Tannehill's bonuses. (Id.) The remainder of their bonuses was discretionary and depended on factors like their ability to bring in new clients, their service to existing clients, and their support of Morgan Keegan's policies and procedures. (Id.)
Defendant Thomas R. Gamble was a vice president of the Funds from 2003 and an executive of Regions from 1981. (Id. ¶ 84.) Plaintiffs have also sued twenty "John Doe" Defendants who were "supervised, or . . . otherwise employed by Morgan Keegan and [MAM]." (Id. ¶ 87.) Those John Doe Defendants allegedly aided Morgan Keegan in performing due diligence *752 in its sale of the Funds' shares. (Id.) The CAC employs the term "RMK Defendants" to refer to MAM, Morgan Keegan, MK Holding, Regions, Regions Bank, and John Does 1-20. (Id. ¶ 88.) "Morgan Keegan" and "MAM" include "as relevant, their respective officers and employees named as Defendants, including John Doe One through Twenty." (Id.) The term "Defendants" includes the Funds, the RMK Defendants, and Defendant PricewaterhouseCoopers ("PwC"). (Id.)
PwC, a limited liability partnership, is a national public accounting and auditing firm that audited the Funds' annual financial statements. (Id. ¶ 94.) It also issued reports on the Funds' internal controls and certified certain information in the Funds' prospectuses and statements of additional information. (Id. ¶ 94.)
According to Plaintiffs' CAC, Kelsoe became enamored with investing in collateralized debt obligations ("CDOs"). (Id. ¶¶ 361, 367.) He allegedly caused the Funds to invest heavily in CDOs; although, most other mutual funds invested minimally in CDOs. (Id. ¶ 369) The Funds' prospectuses stated that they would never invest more than 15% of their total assets in illiquid investmentsinvestments where the market is small because of the small number of potential purchasers. (Id. ¶ 162.) Nonetheless, Kelsoe allegedly violated that restriction in managing all three Funds. (Id. ¶ 164.) For example, the Short Term Fund, meant to have the most conservative investment strategy of the three Funds, invested 31.5% of its total assets in illiquid CDOsmore than twice the maximum amount allowed. (Id.) The Funds also had a "fundamental investment restriction" that prevented them from having more than 25% of their total assets in "the securities of companies whose principal business activities are in the same industry." (Id. ¶ 273.) Because that restriction was fundamental, only an affirmative vote of the Funds' shareholders could waive it. (Id. ¶ 274.) The RMK Defendants allegedly ignored the restriction and caused the High Income Fund to invest 52.32% of its assets in mortgage-backed securities. (Id. ¶ 276(a).) The Intermediate Fund held 54.71% of its assets in mortgage-backed securities, and the supposedly conservative Short Term Fund held 54.11% of its assets in similar investments. (Id. ¶ 276(b)-(c).)
Although the markets as a whole experienced a significant decline because of the credit crisis, Plaintiffs assert that the Funds' losses were not a result of normal market factors. Instead, they allege that the Funds declined because of their investment in numerous low-priority tranches[2] of asset-backed securities. (Id. ¶ 295.) These low-quality, high risk investments had the effect of exposing "the Funds and their investors to the credit risk equivalent of an investment in the underlying portfolio of assets leveraged between 10 to 50-to-1." (Id. ¶ 296(b).) This violated the Funds' fundamental restriction that "they would not use leverage for investment purposes" but only for emergency purposes to maintain liquidity. (Id. ¶ 293.)
*753 When the market began to question the underlying value of mortgage-backed CDOs in 2007, the Funds found themselves holding assets quickly declining in value that they could not readily sell because of the limited market for such investments. (Id. ¶ 5.) From December 31, 2006, to December 31, 2007, the per-share value of the assets held by the High Income Fund, Intermediate Fund, and Short Term Fund dropped respectively by 72%, 70%, and 23%. (Id.) The collective value of the assets held by all three Funds fell from $2.2 billion to $372.5 million. (Id.)
Plaintiffs filed suit on December 6, 2007. (See Compl., ECF No. 1.) This Court consolidated five then-separately pending suits and appointed Lead Plaintiffs and Lead Counsel by Order dated September 23, 2008. (Atkinson v. Morgan Asset Mgmt., No. 07-2784, ECF No. 154, Order Granting in Part and Denying in Part Motions for Partial Consolidation, Appointment of Lead Plaintiff, and Approval of Counsel, at 38-40 (W.D.Tenn.)). The Lead Plaintiffs filed the CAC on November 30, 2009. The CAC alleges seven causes of action, all based on federal law. Plaintiffs allege Defendants violated § 11, § 12(a)(2), and § 15 of the Securities Act of 1933; §§ 11, 22, 30, 34(b), and 47(b) of the Investment Company Act of 1940; and § 10(b), § 20, and Rule 10b-5 of the Securities Exchange Act of 1934. (CAC ¶¶ 684-766.) Plaintiffs seek compensatory or rescissory damages for their losses, prejudgment interest, costs, and reasonable attorneys' fees. (Id. at 366.) Defendants filed the present Motions to test the adequacy of Plaintiffs' Complaint.

II. JURISDICTION AND STANDARD OF REVIEW
Plaintiffs bring all their claims under the federal securities laws. This Court thus has federal question jurisdiction over Plaintiffs' suit. 28 U.S.C. § 1331.
In addressing a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), the Court must construe the complaint in the light most favorable to the plaintiff and accept all well-pled factual allegations as true. League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir.2007). A plaintiff can support a claim "by showing any set of facts consistent with the allegations in the complaint." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 563, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). This standard requires more than bare assertions of legal conclusions. Bovee v. Coopers & Lybrand C.P.A., 272 F.3d 356, 361 (6th Cir.2001). "[A] formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555, 127 S.Ct. 1955. Any claim for relief must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007)(per curiam). "Specific facts are not necessary; the statement need only `give the defendant fair notice of what the. . . claim is and the grounds upon which it rests.'" Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955.)
Nonetheless, a complaint must contain sufficient facts "to `state a claim to relief that is plausible on its face'" to survive a motion to dismiss. Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). "This plausibility standard is not akin to a `probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. at 1949 (citation omitted). A plaintiff with no facts and "armed with nothing more than conclusions" *754 cannot "unlock the doors of discovery." Id. at 1950.
Plaintiffs' CAC accuses "[e]ach of the RMK Defendants" of being "a participant in a fraudulent scheme and course of conduct." (CAC ¶ 103.) Where a plaintiff makes allegations of fraud, including securities fraud, he or she must meet the heightened pleading requirements of Federal Rule of Civil Procedure 9(b). Frank v. Dana Corp., 547 F.3d 564, 569-70 (6th Cir.2008). Rule 9(b) requires that a party "alleging fraud or mistake . . . state with particularity the circumstances constituting fraud or mistake." Fed.R.Civ.P. 9(b). This heightened pleading standard mandates that plaintiffs alleging fraud 1) specify which statements were fraudulent, 2) identify the defendant(s) who spoke the fraudulent statements, 3) describe "when and where the statements were made" and 4) "explain why the statements were fraudulent." Frank, 547 F.3d at 570 (citation and internal quotation marks omitted). "At a minimum, [p]laintiffs must allege the time, place and contents of the misrepresentations upon which they relied" to satisfy Rule 9. Id. (citing Bender v. Southland Corp., 749 F.2d 1205, 1216 (6th Cir.1984)).

III. ANALYSIS

A. '34 Act Claims
Plaintiffs' CAC alleges three claims under the Securities and Exchange Act of 1934 (the "'34 Act"). Count V alleges that the Funds, MAM, Morgan Keegan, Regions Bank, and PwC violated § 10 of the '34 Act and Rule 10b-5 promulgated thereunder. (CAC ¶ 742, 750); see also 15 U.S.C. § 78j(b); 17 C.F.R. § 240.10b-5. Count VI of the CAC alleges violations of the same provisions against Regions Bank, Morgan Keegan, and MAM on behalf of the Fiduciary Subclass. (Id. ¶ 752.) Count VII alleges that the officer and director Defendants, Regions, and MK Holding were "control persons" under § 20 of the '34 Act. See § 15 U.S.C. § 78t(a). Plaintiffs' control person claim may only stand if Plaintiffs successfully plead a primary violation of § 10(b). See 15 U.S.C. § 78t(a); PR Diamonds, Inc. v. Chandler, 364 F.3d 671, 696 (6th Cir.2004). Section 10(b) prohibits, "in connection with the purchase or sale of any security," the use of "any manipulative device or contrivance." 15 U.S.C. § 78j(b). Rule 10b-5, promulgated by the Securities and Exchange Commission, implements that prohibition. See 17 C.F.R. § 240.10b-5; Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 318, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007).

1. The PSLRA's heightened pleading standard
When a plaintiff alleges a violation of § 10(b) and Rule 10b-5, the Private Securities Litigation Reform Act ("PSLRA") mandates a heightened pleading standard greater than that required by Rule 9(b). Compare 15 U.S.C. § 78u-4(b)(2), with Fed.R.Civ.P. 9(b); Konkol v. Diebold, Inc., 590 F.3d 390, 396 (6th Cir. 2009) (noting "the more exacting pleading requirements" of the PSLRA (citation and internal quotation marks omitted)). The PSLRA requires a plaintiff 1) "to state with particularity" the facts constituting the alleged violation, including "specifying each statement alleged to have been misleading," 15 U.S.C. § 78u-4(b)(1), and 2) "state with particularity the facts giving rise to a strong inference that the defendant acted with the particular state of mind." Id. § 78u-4(b)(2). That "particular state of mind" is known as scienter and requires a plaintiff to show that a defendant's intention was "to deceive, manipulate or defraud." Tellabs, 551 U.S. at 313, 127 S.Ct. 2499 (quoting Ernst & Ernst v. Hochfelder, 425 U.S. 185, 194, 96 S.Ct. 1375, 47 L.Ed.2d 668 (1976)). An inference of scienter is "strong" within the *755 meaning of the PSLRA if it is "more than merely plausible or reasonableit must be cogent and at least as compelling as any opposing inference of nonfraudulent intent." Id. at 314, 127 S.Ct. 2499. Allegations of negligence do not support a finding of scienter. Konkol, 590 F.3d at 396. In the Sixth Circuit, a plaintiff at least must state allegations sufficient to find that a defendant acted with recklessness. Mansbach v. Prescott, Ball, & Turben, 598 F.2d 1017, 1023 (6th Cir.1979); see also Konkol, 590 F.3d at 396. The Sixth Circuit defines recklessness as "highly unreasonable conduct which is an extreme departure from the standards of ordinary care." Mansbach, 598 F.2d at 1025. The danger "must be so obvious that any reasonable man would have known of it." Id.

2. Plaintiffs have failed to plead scienter
Plaintiffs argue that they have adequately pled scienter as to the named Defendants in Counts V-VI of the CAC. (Plaintiffs' Consolidated Opposition to Defendants' Motions to Dismiss, ECF No. 238, at 93-99.) ("Pls.' Resp.") An examination of the CAC and the relevant case law, however, demonstrates that they have not met the PSLRA's enhanced burden.

a. It is unclear who is a Defendant
Plaintiffs' CAC names as Defendants in their § 10(b) claims the Funds, MAM, Morgan Keegan, Regions Bank, and PwC. (CAC ¶¶ 74, 750, 752.) Paragraph 88 of the CAC advises that the terms MAM and Morgan Keegan "shall each be deemed to include, as relevant, their respective officers and employees as named Defendants, including John Doe One through Twenty." Thus, at first glance, one would conclude that Plaintiffs are stating claims against the officers and directors of Morgan Keegan and MAM by the use of those terms in Counts V and VI. However, examining the other counts of the CAC, one finds that Plaintiffs appear to state explicitly when they are suing, or not suing, "Defendant Officers and Directors" in the relevant count. (Cf. CAC ¶ 684 (explicitly excluding the directors and officers for claims under the '33 Act); ¶ 758 (suing the officers and directors for control person liability under § 20 of the '34 Act).) The Motion to Dismiss of the Individual Defendants[3] points to this ambiguity and states that the Individual Defendants are unsure whether Plaintiffs have sued them under § 10(b). (Memorandum of Law in Support of the Individual Defendants' Motion to Dismiss, ECF No. 226-1, at 1 n. 1.) Plaintiffs' own Response fails to answer the Individual Defendants' query. Plaintiffs state instead that they have "allege[d] the role of each Defendant that was instrumental to the Funds' mismanagement" without clarifying whether that includes officers and directors such as the Individual Defendants. (Pls.' Resp. at 93.)
When it is possible to ask legitimately, after reading a four-hundred-page Complaint, who is being sued for what on a particular count, Plaintiffs have not met the PSLRA's pleading standards. See 15 U.S.C. § 78u-4(b)(1)-(2) (requiring that a plaintiff "state with particularity" all facts surrounding the alleged misrepresentations or omissions and why a finding of scienter is appropriate). It is not for the Court or for Defendants to ask who is "relevant" (CAC ¶ 88) to a particular count. It is Plaintiffs' duty to state clearly against whom they seek damages. See Frank, 547 F.3d at 570. Counts V and VI *756 arguably do not meet even Rule 8's more forgiving standard requiring plausibility. See Fed.R.Civ.P. 8(a)(2) (requiring a "short and plain statement of the claim showing that the pleader is entitled to relief" (emphasis added)). Therefore, they cannot meet the "more exacting" standards of Rule 9(b) and the PSLRA. Konkol, 590 F.3d at 396 (internal quotation marks and citation omitted). On this basis alone, DISMISSAL of the '34 Act counts is appropriate.

b. Plaintiffs fail under group pleading
Alternatively, assuming that Plaintiffs have pled with the requisite particularity against whom they bring their claims, Plaintiffs have failed to demonstrate that "an inference of scienter . . . [is] at least as compelling as any opposing inference of nonfraudulent intent." Tellabs, 551 U.S. at 314, 127 S.Ct. 2499. Plaintiffs invoke the "group pleading" doctrine, also called the "group published doctrine," which provides that, "[i]n cases of corporate fraud where the false or misleading information is conveyed in prospectuses, registration statements, annual reports, press releases, or other `group published information,' it is reasonable to presume that these are the collective actions of the officers."[4]City of Monroe Emps. Ret. Sys. v. Bridgestone Corp., 399 F.3d 651, 689 (6th Cir.2005). Following the passage of the PSLRA, the Fifth Circuit and many district courts have found that the group pleading doctrine no longer applies. See Southland Sec. Corp. v. IN-Spire Solutions, Inc., 365 F.3d 353, 364 (5th Cir.2004) (collecting cases). Those circuits that have continued to apply the doctrine have generally done so without analysis of the potential effects of the PSLRA's passage. See Bridgestone, 399 F.3d at 690 n. 33 (collecting cases). The Sixth Circuit has not taken a position on the continuing viability of the group pleading doctrine. See id. at 690 (noting that the court "need not decide here the current viability of the group published doctrine"). For the purposes of this analysis, the Court will assume the doctrine applies.
The Sixth Circuit has identified nine factors that are "usually relevant to scienter." Helwig v. Vencor, Inc., 251 F.3d 540, 552 (6th Cir.2001) (en banc), abrogated in part by Tellabs, 551 U.S. at 324, 127 S.Ct. 2499 (expressly abrogating the Sixth Circuit's prior, higher standard requiring that the inference that a defendant acted with scienter be the "most plausible of competing inferences"); see also PR Diamonds, 364 F.3d at 682-83 (noting that the Helwig factors remain "probative of scienter"). Those nine factors are:
(1) insider trading at a suspicious time or in an unusual amount; (2) divergence between internal reports and external statements on the same subject; (3) closeness in time of an allegedly fraudulent statement or omission and the later disclosure of inconsistent information; (4) evidence of bribery by a top company official; (5) existence of an ancillary lawsuit charging fraud by a company and the company's quick settlement of that suit; (6) disregard of the most current factual information before making statements; (7) disclosure of accounting information in such a way that its negative implications could only be understood by someone with a high degree of sophistication; (8) the personal interest of certain directors in not informing disinterested directors of an impending sale of stock; and (9) the self-interested motivation *757 of defendants in the form of saving their salaries or jobs.
Helwig, 251 F.3d at 552 (citation omitted). The Helwig factors are not an exhaustive list. PR Diamonds, 364 F.3d at 682. The Court must view the Plaintiffs' CAC as a whole, take into account documents incorporated into the CAC by reference, and engage in a comparative inquiry about how likely it is that scienter, as opposed to non-fraudulent activity, arises from the underlying facts. Tellabs, 551 U.S. at 323, 127 S.Ct. 2499.
Plaintiffs point to four factors suggesting scienter in this case. (Pls.' Resp. at 98.) First, they note those portions of their CAC that allege the proximity between the allegedly fraudulent statements about the liquidity of the Funds' investments and the later disclosure of those investments' illiquidity. (CAC ¶¶ 182-83, 187, 195-98, 220(h), 220(l), 221-22, 470-72.) Temporal proximity alone, however, cannot support a finding of scienter. See Fidel v. Farley, 392 F.3d 220, 232 (6th Cir.2004). The facts alleged in this case illustrate why. The credit crisis that caused the collapse of the market for asset backed securities, like those in which the Funds invested, occurred over a relatively short time. (Cf. CAC ¶ 154 (graph depicting the sharp and sudden drop of the share price of the Intermediate Fund in mid-to-late 2007).) It is at least equally possible that the temporal proximity occurred because of the closeness of the sudden market crash to the July 30, 2007 end date of the Funds' fiscal years. Nonetheless, proximity must weigh in the scienter analysis.
The second factor Plaintiffs cite is the disclosure of accounting information in such a way that only a person of a high degree of sophistication could understand it. (CAC ¶¶ 183, 189, 195-98, 209, 220, 220(l), 469-72.) Plaintiffs undercut their theory by admitting that they "do not allege that the dollar value for any security was incorrect at any time during the Class Period." (Pls.' Resp. at 22 (emphasis added).) Thus, Plaintiffs admit that a perfect disclosure of the facts surrounding the Funds' investments would not have revealed that any dollar value assigned to a Fund security was incorrect. Although the cited paragraphs of the CAC reference specific omitted or misleading disclosures about the Funds' liquidity, when one views Plaintiffs' inability to allege that any security's dollar value was overstated in conjunction with the proximity of the Funds' revelation of illiquidity to the collapse of the credit markets, it becomes increasingly likely that market forces, rather than recklessness, caused the collapse.
Plaintiffs' third factor is that the '34 Act Defendants' disregarded the most current factual information before making the misleading statements. (Pls.' Resp. at 98.) Particularly relevant here are Plaintiffs' allegations that Regions, Morgan Keegan, and PwC had actual knowledge that the Funds' liquidity disclosures were deficient because they issued, underwrote, or audited some of the same securities in which the Funds invested and had reason to know they were illiquid. (Id. ¶ 205.) Such an allegation is damaging and likely would lead to a finding of scienter, because it would mean these Defendants concluded that the investments were illiquid when they analyzed them for independent investors, but stated they were liquid when they purchased or audited them for the Funds. Once again, however, the Plaintiffs severely undermine their own allegation. The CAC states that the Funds invested in two securities that Morgan Keegan underwrote; PwC audited twenty securities the Funds purchased as investments; and the CAC is silent about how many securities Regions issued. (Id.) For Funds that held $2.2 billion in assets, two or twenty securities are likely to represent a de minimus *758 amount. (See ¶ 5.) It is impossible to determine how large a share of the Funds' investments these securities represented because Plaintiffs fail to identify the securities by name and do not allege how large a share of the Funds' assets they represented. Basing knowledge on two or twenty securities among differing investments made over a three-year period does not support a finding of scienter. A court cannot infer fraudulent intent from the mere fact that a particular defendant had access to information. PR Diamonds, 364 F.3d at 688.
This barrier is especially applicable to PwC. "To allege that an independent auditor acted with scienter, the complaint must allege specific facts showing that the deficiencies in the audit were so severe that they strongly suggest that the auditor must have been aware of the corporation's fraud." Id. at 694 (citations omitted). Plaintiffs cannot allege that PwC must have been aware of the fraud when Plaintiffs admit that no security's dollar value was incorrect. (Pls.' Resp. at 22.) Although Plaintiffs plead violations of several provisions of the Generally Accepted Accounting Principles ("GAAP"), (see CAC ¶¶ 531-71), failure to follow GAAP does not by itself state a securities fraud claim. Konkol, 590 F.3d at 400. The Sixth Circuit has described the type of accounting violations that lead to a finding of scienter as "obvious." PR Diamonds, 364 F.3d at 685. That a perfect audit would not have led PwC to find a misvalued security in the Funds' portfolios leads the Court to conclude that any errors were not clear violations of "simple accounting rules." See id.
The final factor Plaintiffs assert is that the Defendants had a self-interested motivation. (Pls.' Resp. at 98.) Plaintiffs point to the fees received by MAM, Morgan Keegan, Regions, and Regions Bank for managing and administering the Funds and marketing the Funds' shares (CAC ¶¶ 41, 45); the substantial bonuses Kelsoe and Tannehill could earn (Id. ¶¶ 83-84, 86); and Regions' and Morgan Keegan's strategy of cross-branding each other's services. (Id. ¶¶ 651, 654.) When analyzing the self-interest factor, a court must differentiate between "motives common to corporation and executives generally" and "motives to commit fraud." PR Diamonds, 364 F.3d at 690. Every corporation and business executive wants to appear successful. Id. That Morgan Keegan, MAM, and Regions stood to profit from the success of the Funds does not make a "cogent" case for fraud. See Tellabs, 551 U.S. at 314, 127 S.Ct. 2499. Plaintiffs do not allege that Tannehill or Kelsoe ever received a bonus or how much they received, requiring the Court to discount these allegations, as well. (See CAC ¶¶ 83-84, 86.)
Plaintiffs have not chosen to argue one allegation. They allege that certain employees of Morgan Keegan read a "published article" revealing that the Funds had purchased many securities from a small Florida dealer who focused on illiquid securities. (CAC ¶ 352.) These unidentified employees became concerned about their investments in the Funds and sold their personal shares. (Id. ¶ 354.) Defendant Edwards, Morgan Keegan's CEO, discovered those sales and prohibited other employees from selling their personal holdings in the Funds. (Id. ¶ 354.) It is certainly possible to read this allegation to indicate that a corporate leader was concerned that news of his employees' selling their shares could alert other shareholders to potential losses. (See id.) However, the CAC notes that this revelation about one of the sources of the Funds' investments came in a published, publically available article. Any interested investor could have gained access to the same information. Edwards may have believed that *759 the Funds were sound investments and that individual employeesthe precise number of whom and the size of whose sales the CAC does not revealshould not undermine this corporate message. (See id. ¶¶ 352-54.)
Employing the reading of this allegation most favorable to Plaintiffs, Plaintiffs have not established scienter. Insider trading only raises suspicions "when it is dramatically out of line with prior trading practices at times calculated to maximize the personal benefit from undisclosed insider information."[5]Konkol, 590 F.3d at 399 (citations and internal quotation marks omitted). Plaintiffs do not allege how many employees sold their shares in the Funds, when these sales took place, how many total employees held the Funds' shares, or whether the individual share sales made a marked difference in the number of shares held by Morgan Keegan employees. Without more, it is impossible to know whether this was an aberration or indicative of deep, growing concerns about the Funds' liquidity.
Assuming the group pleading doctrine has retained its viability after passage of the PSLRA and viewing the pleadings as a whole, Plaintiffs have failed to demonstrate that the inference of scienter is "at least as compelling as any opposing inference of nonfraudulent intent." Tellabs, 551 U.S. at 314, 127 S.Ct. 2499. Plaintiffs' pleadings undermine their strongest assertions of scienter and some assertions, like those about violation of the GAAP or the alleged self-interested motives of the Defendants, are entitled to little or no weight. Counts V and VI of the CAC are DISMISSED. Because Plaintiffs have failed to plead a primary violation, they may not bring a claim for controlled person liability under § 20(a) of the '34 Act. See 15 U.S.C. § 78t(a); PR Diamonds, 364 F.3d at 696. The Court, therefore, DISMISSES Count VII of the CAC.

B. '33 Act Claims
Plaintiffs' CAC also allege causes of action based on the Securities Act of 1933 (the "33 Act"). (CAC ¶¶ 683-724.) Count I alleges violations of § 11 of the '33 Act, 15 U.S.C. § 77k, against the Funds, Morgan Keegan, Morgan Management, Regions Bank, and PwC.[6] (Id. ¶ 684.) The Count's heading makes clear that the claim does not lie against the officer and director Defendants. (See id.) Count II, which is against all Defendants except Regions, PwC, and MK Holding, asserts claims under § 12(a)(2) of the '33 Act, 15 U.S.C. § 77l. Count III alleges control person liability under § 15, 15 U.S.C. § 77o, against the officers and directors of the Funds; MAM; MK Holding; Regions; Morgan Keegan; and the officers and directors of MAM, Morgan Keegan, MK Holding, Regions Bank, and Regions. (CAC ¶ 717.) As with control person liability under the '34 Act, Plaintiffs must successfully state a primary violation of the '33 Act, i.e., Counts I or II, to maintain their control person claims. See 15 U.S.C. § 77o(a); J & R Mktg. v. Gen. Motors Corp., 549 F.3d 384, 398 (6th Cir.2008).
The heightened pleading standards of the PSLRA do not apply to claims under the '33 Act; however, where the claims sound in fraud, the standards of Rule 9(b) do apply. Indiana State Dist. Council of Laborers v. Omnicare, Inc., 583 F.3d 935, 948 (6th Cir.2009); Rubke v. Capitol Bancorp, Ltd., 551 F.3d 1156, 1161 (9th Cir.2009). Thus, "[a]t a minimum, Plaintiffs must allege the time, place and *760 contents of the misrepresentations upon which they relied." Frank, 547 F.3d at 570 (citation omitted).

1. Section 11 claims
Section 11 prohibits making "untrue statement[s] of material fact" or omitting statements of material fact in a security's registration statement. 15 U.S.C. § 77k(a). It protects investors who "acquired" the security in reliance on the representations contained in the registration statement. Id. The CAC identifies with particularity when the supposedly misleading statements were made. (CAC ¶ 690.) It also makes clear which statements were misleading: the Funds claimed to abide by restrictions that prohibited them from holding more than 15% of their assets in illiquid securities and more than 25% of their assets in securities related to the same industry. (See, e.g., id. ¶¶ 162, 276.) Plaintiffs allege that these statements were misleading because the Funds did not, in fact, abide by these restrictions. (See, e.g., id. ¶¶ 171, 276(a)-(c).) Other courts faced with similar § 11 claims have allowed such claims to proceed. See, e.g., Rodney v. KPMG Peat Marwick, 143 F.3d 1140, 1145 (8th Cir. 1998) (allowing claims alleging that the funds violated restrictions on borrowing money, purchasing illiquid securities, and investing in derivatives to proceed); White v. Heartland High-Yield Mun. Bond Fund, 237 F.Supp.2d 982, 984-86 (E.D.Wis.2002) (permitting claims against PwC based on failure to follow limitations on illiquid securities). Indeed, in one of the cases Defendants cite to support their argument that Plaintiffs' claims should be dismissed, the district court reversed itself as to the § 11 claims on reconsideration. See Yu v. State St. Corp., 686 F.Supp.2d 369, 378-81 (S.D.N.Y.2010) (dismissing plaintiffs' claims based on funds' over-exposure to mortgage backed securities), vacated by 2010 U.S. Dist. LEXIS 70931, at *9-15 (allowing claims to proceed following the filing of amended complaint).
Defendants argue that Plaintiffs have failed to plead loss causation. (See, e.g., Memorandum in Support of Defendant Morgan Keegan's Motion to Dismiss, ECF No. 222-1, at 49-55.) ("Morgan Keegan Mem.") Loss causation is not an element of a § 11 claim; it is an affirmative defense unsuitable for adjudication in a motion to dismiss. 15 U.S.C. § 77l(b); see Indiana State Dist. Council, 583 F.3d at 947. Plaintiffs have therefore stated a claim under Section 11 of the '33 Act, and Defendants' Motions to Dismiss this claim are DENIED.

2. Sections 12(a)(2) and 15 claims
Section 12(a)(2) creates a cause of action based on "misleading statements, misstatements, or omissions in a. prospectus." J & R Mktg., 549 F.3d at 389; see also 15 U.S.C. § 77l(a)(2). Plaintiffs base their allegations in this count on the same misstatements alleged under the § 11 count. (See, e.g., CAC ¶ 222.) For the reasons stated in the § 11 analysis, Plaintiffs have stated a claim under § 12(a)(2) of the '33 Act.
Certain Defendants argue that they are not "statutory sellers" under § 12(a)(2). (See, e.g., Morgan Keegan Mem. at 46-47.) A seller is one who 1) passes title, or other interest in the security, to the purchaser for value or 2) successfully solicits the purchase based at least in part on a desire to further his own financial interests or those of the securities' owner. Pinter v. Dahl, 486 U.S. 622, 647, 108 S.Ct. 2063, 100 L.Ed.2d 658 (1988); Smith v. Am. Nat'l Bank & Trust Co., 982 F.2d 936, 941 (6th Cir.1992). As the test suggests, whether someone "solicits" a purchase is a fact-bound inquiry unsuited for a Rule 12(b)(6) motion. Defendants' Motions to Dismiss Plaintiffs' *761 claims under § 12(a)(2) of the '33 Act are DENIED.
Because Plaintiffs have stated primary claims under the '33 Act, they may also state a claim under § 15 for control person liability. 15 U.S.C. § 77o(a); J & R Mktg., 549 F.3d at 398. Section 15 places liability "jointly and severally" on any person who "controls any person liable under section 11 or 12." 15 U.S.C. § 77o(a). Whether a party exercised the requisite control involves a factual analysis best saved for later determination. The Court, therefore, DENIES Defendants' Motions to Dismiss Plaintiffs' control person liability claims under the '33 Act.[7]

3. Holder Claims
Plaintiffs seek to represent a class of individuals who "refrained from redeeming the Funds' shares during the period from March 1, 2007 through April 30, 2008." (CAC ¶ 2(a)(2).) The '33 Act limits claims to purchasers. 15 U.S.C. § 77k(a) (noting that the party must have "acquired" the security); 15 U.S.C. § 77l(a)(2) (imposing liability if a the party "offers or sells" a security to an investor based on misstatements in a prospectus or oral communication). Because the proposed class definition includes investors who did not purchase the Funds' shares during the class period of December 6, 2004  December 6, 2007, these holder claims must be DISMISSED. See Simmons v. Wolfson, 428 F.2d 455, 456 (6th Cir.1970) (per curiam); Miller v. Lazard, Ltd., 473 F.Supp.2d 571, 578 (S.D.N.Y.2007) (noting that the '33 Act allows "purchasers of registered securities" to hold parties liable for misstatements).

C. ICA Claims
Count IV of the CAC alleges that all Defendants violated §§ 13, 22, 30, 34(b), and 47(b) of the Investment Company Act of 1940 ("ICA"). (CAC ¶ 725.) As Plaintiffs admit, other than § 47(b), the cited ICA provisions do not contemplate private rights of action. (Pls.' Resp. at 136-37.) Plaintiffs assert that one district court has found an implied private right of action under § 13(a). See Northstar Fin. Advisors, Inc. v. Schwab Invs., 609 F.Supp.2d 938, 944 (N.D.Cal.2009). The Ninth Circuit recently reversed that conclusion on interlocutory appeal. Northstar Fin. Advisors, Inc. v. Schwab Invs., 615 F.3d 1106, 1108 (9th Cir.2010).
The Second Circuit has persuasively explained why it is inappropriate to imply private rights of action under the ICA. See Olmsted v. Pruco Life Ins. Co., 283 F.3d 429, 432-436 (2d Cir.2002). The ICA expressly provides that the Securities and Exchange Commission, rather than private plaintiffs, has the right to enforce all provisions of the ICA. See 15 U.S.C. § 80a-41. Congress provided an express private right of action to enforce § 36(b) of the ICA, demonstrating that Congress knew how to provide a private right of action when it wanted one. See 15 U.S.C. § 80a-35(b) ("An action may be brought under this subsection by the Commission, or by a security holder of such registered investment company." (emphasis added)). These two factors create a strong presumption that Congress did not intend to create a private right of action under any section of the ICA that does not specify one. Olmsted, 283 F.3d at 433. Plaintiffs have failed to overcome that presumption, and the Court DECLINES to imply any new private rights of action under the *762 ICA. Plaintiffs' claims under §§ 13, 22, 30, and 34(b) of the ICA are DISMISSED.
Courts have determined that § 47(b) of the ICA contemplates a private right of action. Lessler v. Little, 857 F.2d 866, 874 (1st Cir.1988); Mathers Fund, Inc. v. Colwell Co., 564 F.2d 780, 783 (7th Cir.1977); Hamilton v. Allen, 396 F.Supp.2d 545, 558-60 (E.D.Pa.2005); In re Mut. Funds Inv. Litig., 384 F.Supp.2d 873, 880-81 (D.Md.2005). Section 47(b) provides that any contract whose terms or performance would involve violating any provision of the ICA is unenforceable. 15 U.S.C. § 80a-46(b)(1). It gives "any party" to the contract the right to seek rescission. Id. (b)(2). Plaintiffs argue that the underlying contract is the underwriting agreement between the Funds and Morgan Keegan. (Pls.' Resp. at 139.) Plaintiffs are not parties to the underwriting agreement and, therefore, may not assert a direct remedy under § 47(b). Lessler, 857 F.2d at 874; Hamilton, 396 F.Supp.2d at 558. A plaintiff may bring a § 47(b) claim derivatively on behalf of the Funds, but this suit is a direct suit against the defendants, not a derivative action. Lessler, 857 F.2d at 874; Hamilton, 396 F.Supp.2d at 558. Plaintiffs' claim under § 47(b) of the ICA is prohibited and is DISMISSED.

IV. CONCLUSION
Defendants' Motions to Dismiss the '34 Act claims are GRANTED because Plaintiffs have failed to plead scienter properly, as required by the PSLRA. Defendants' Motions to Dismiss the '33 Act claims are DENIED, with the exception of any claims on behalf of those who did not purchase shares of the Funds during the class period. All such holder claims are DISMISSED for lack of standing. Plaintiffs' claims under the ICA are also DISMISSED.
In the last sentence of their response, Plaintiffs seek permission to amend the CAC "to cure any deficiencies" the Court may find. (Pls.' Resp. at 140.) This request is unsupported by any argument or citation to authority. The request is DENIED. See PR Diamonds, 364 F.3d at 699 (noting that "a bare request in an opposition to a motion to dismiss" without any argument does not constitute a motion to amend (citations and internal quotation marks omitted)); cf. Mitan v. Duval (In re Mitan), 573 F.3d 237, 248 n. 5 (6th Cir. 2009) (declining to consider a "last-sentence request" because applicants provided no citation of authority or other support).
NOTES
[1]  J. Thompson Weller is the son of Joseph C. Weller. (CAC ¶ 78.)
[2]  "Tranche" is the French world for "slice." In the field of investments, tranche refers to a security that its sellers split into smaller pieces to be sold to investors. Where the security is an asset-backed security, like those at issue here, each tranche has different rules for paying its investors. The "top" tranche contains the safest securities, and its investors receive principal and income payments first. The lowest tranche contains the riskiest securities. Its investors receive payment only if all investors in the higher tranches are paid first. Thus, if borrowers default on the assets backing the securities, those who have invested in the lowest tranches bear any losses first. Consulting Serv. Group, LLC v. Morgan Keegan & Co., Nos. 10-02045, MDL 2009, 2010 WL 2650736, at *1 n. 2, 2010 U.S. Dist. LEXIS 66917, at *4 n. 2 (W.D.Tenn. July 2, 2010).
[3]  Allen B. Morgan, Jr.; J. Kenneth Alderman; Carter E. Anthony; Brian B. Sullivan; Joseph C. Weller; John T. Weller; G. Douglas Edwards; Charles D. Maxwell; David M. George; Michelle F. Wood; James C. Kelsoe, Jr.; David H. Tannehill; and Thomas R. Gamble.
[4]  Here, Plaintiffs arguably seek to expand the group pleading doctrine to include not only the officers but also the directors, related corporate entities, and the Funds' auditor. (Pls.' Resp. at 95-96.) Cf. Bridgestone, 399 F.3d at 689.
[5]  The information here, of course, was disclosed publically in a published article. (CAC ¶ 352.)
[6]  Auditors such as PwC are only liable for those statements in the registration statement that they certified. 15 U.S.C. § 77k(a)(4).
[7]  Likewise, any arguments about the application of the statute of repose to any individual claims should await factual development of the claims. See 15 U.S.C. § 77m (extinguishing all claims "three years after the security was bona fide offered to the public").