In re National Century Financial Enterprises, Inc., Investment Litigation

OPINION AND ORDER ON CREDIT SUISSE’S MOTION FOR SUMMARY JUDGMENT IN THE NOTEHOLDER ACTIONS

JAMES L. GRAHAM, District Judge.

This matter is before the court on the motion of defendants Credit Suisse Securities (USA) LLC and Credit Suisse, New York Branch (together, “Credit Suisse”), for summary judgment on the claims brought by the Noteholder plaintiffs. The Noteholders are institutional investors who collectively purchased nearly $2 billion in notes issued by National Century Financial Enterprises, Inc., through its subsidiaries NPF VI, Inc. and NPF XII, Inc. In most cases, the Noteholders purchased their notes directly from Credit Suisse, which served in the role of initial purchaser and placement agent for National Century. It is undisputed that National Century committed a massive fraud. What is disputed here is the extent to which Credit Suisse can be held liable to the Noteholders for their losses.

According to the Noteholders, the evidence demonstrates that Credit Suisse knew or should have known of the material aspects of National Century’s fraud. They argue that Credit Suisse sold the notes despite knowing of various ways in which National Century ran it operations contrary to how those operations were described in the offering materials that Credit Suisse supplied to them, as well as in other communications Credit Suisse made to them. The Noteholders assert numerous claims, including for fraud, negligent misrepresentation, aiding and abetting fraud, violations of Section 10(b) of the Securities Exchange Act of 1934, and violations of the blue sky laws of various states.

Credit Suisse’s motion offers a host of reasons why it believes it is entitled to summary judgment. It contends that the evidence demonstrates as a matter of law that Credit Suisse did not know, nor should have known, of National Century’s fraud. According to Credit Suisse, National Century deliberately hid the fraud from Credit Suisse and other third parties involved in its operations. Credit Suisse further argues that it did not make any actionable misrepresentations to the Note-holders because it was not the maker of the statements in the offering materials and because its various direct communications with the Noteholders amounted to no more than sales talk and factually accurate descriptions of the note programs. It also contends that the Noteholders cannot establish that they relied upon any alleged Credit Suisse misrepresentation in making their decisions to purchase notes and that, in any event, their purported reliance was not reasonable.

For the reasons set forth below, the court finds that the Noteholders have submitted sufficient evidence in support of their fraud-based claims to create genuine issues of material fact. Thus, Credit Suisse’s motion for summary judgment is largely denied.

I. Background

The court provides this overview of undisputed facts regarding National Century’s fraud, Credit Suisse’s role with National Century, and the Noteholders’ purchases. More extensive discussions of the facts and the matters in dispute are reserved for the particular legal issue to which those facts relate.

A. National Century’s Fraud

National Century was a privately-held finance company founded in 1990 by Lance Poulsen, Donald Ayers, and Rebecca Parrett in Dublin, Ohio. It provided financing to healthcare providers by purchasing *844 their accounts receivable at a discount under the terms of Sale and Subservicing Agreements. See CS Ex. 11 at NCFE1865-1642 (template Sale and Subservicing Agreement). 1 Under the Agreements, National Century would purchase only “eligible” receivables — those that satisfied certain criteria designed to ensure the receivables were of high quality. Id. at NCFE-1865-1669 to -1671.

National Century generated cash by issuing notes through special-purpose and wholly-owned subsidiaries. The most prominent of these subsidiaries were NPF VI and NPF XII, in whose issuances all of the Noteholders invested. Each NPF note program operated as a trust under a Master Indenture. See CS Ex. 11 (NPF VI Master Indenture); CS Ex. 12 (NPF XII Master Indenture). The parties to the Indentures were the Trust (either NPF VI or NPF XII), the Servicer (National Premier Financial Services, Inc., also a wholly-owned subsidiary of National Century), and the Trustee (either JPMorgan or Bank One). Credit Suisse was not a party to the Indentures.

The NPF notes typically received the highest ratings by the credit rating agencies and were sold to institutional investors through private placement. The notes were secured by the healthcare receivables owned by NPF VI and NPF XII, see CS Exs. 11, 12 at § 3.01, and the Servicer had an obligation to ensure the note programs purchased only eligible receivables. Id. at § 5.04(b). The Indentures offered further layers of protection to investors. These layers included: maintaining the corporate separateness of the NPF entity from National Century and the Servicer and prohibiting the commingling of funds, see id. at § 4.04; subjecting the NPF entity to various monitoring, reporting, and auditing requirements, see id. at §§ 4.12, 5.04(b); observing concentration limits on the percentage amounts of receivables purchased from certain sources, see id. at § 4.13; establishing various reserve accounts, which were required to be maintained at specified percentage levels of the net value *845 of purchased receivables, see id. at §§ 6.01, 6.02, 6.03; and directing the Trustees to declare an event of default if a party committed a material breach of the Indentures, see id. at §§ 7.01, 8.01.

In reality, National Century committed a multi-billion dollar fraud on investors. The mechanics of the fraud have been thoroughly detailed in orders of this court (in the multidistrict litigation, in the criminal proceedings against National Century’s executives, in civil enforcement actions brought by the Securities and Exchange Commission, and in numerous bankruptcy matters appealed to this court), as well as in orders of the Sixth Circuit in the appeals of the criminal convictions, and in orders of the bankruptcy court overseeing the Chapter 11 liquidation of National Century and its subsidiaries. See, e.g., U.S. v. Poulsen, 655 F.3d 492, 498-99 (6th Cir.2011); U.S. v. Faulkenberry, 614 F.3d 573, 577-79 (6th Cir.2010); In re Nat’l Century Fin. Enterprises, Inc., Inv. Litig., 617 F.Supp.2d 700, 705-07 (S.D.Ohio 2009); U.S. v. Poulsen, 568 F.Supp.2d 885, 890-912 (S.D.Ohio 2008); In re Nat’l Century Fin. Enterprises, Inc., Inv. Litig., No. 2:03-md-1565, 2006 WL 469468 at **1-6 (S.D.Ohio Feb. 27, 2006); In re Nat’l Century Fin. Enterprises, Inc., 341 B.R. 198, 209-10 (Bankr.S.D.Ohio 2006).

Briefly stated, a great deal of the accounts receivable that National Century “purchased” were worthless or non-existent receivables from healthcare companies in which National Century’s executives held undisclosed ownership interests. What appeared on paper to be legitimate transactions amounted to little more than transfers of corporate funds into the pockets of National Century’s executives. In testimony given in the criminal proceedings, a government witness provided a four-year snapshot of the fraud at National Century. He found that National Century had made $1.3 billion in unsecured advances in that time window to eight healthcare providers, seven of which the Founders held an ownership stake. See Poulsen, 568 F.Supp.2d at 900 .

The Sixth Circuit summarized the fraud as follows:

The record before us makes unmistakably clear that NCFE’s representations were false. NCFE executives lied to investors in sales presentations; they lied to them in the governing documents for bond sales; and they lied to them in monthly investor reports that showed NCFE in full compliance with the obligations recited above. This practice of deception was continuous from approximately 1995 to October 2002, when NCFE ceased operations.

The deception centered on the practice of “advancing.” Contrary to what it told investors, NCFE routinely advanced funds to healthcare providers without obtaining any receivables, much less eligible ones, in return. NCFE apparently just fronted these monies — investor monies — with the hope that someday the provider would pay them back. Indeed, some providers were already so buried in debt that even the hope must have been absent. Moreover, the advances were large and focused on only a handful of providers, which meant that NCFE blew past its concentration limits as well.

Faulkenberry, 614 F.3d at 578 .

By the time National Century went bankrupt in November 2002, investors suffered losses of well over $2 billion.

B. Credit Suisse and Its Role with National Century

Defendant Credit Suisse Securities (USA) LLC is an investment bank and broker-dealer that is a subsidiary of the Swiss bank Credit Suisse Group AG. Defendant Credit Suisse, New York Branch, is a branch of the Swiss bank. Both Cred *846 it Suisse defendants have their principal places of business in New York.

National Century used various financial institutions to bring its notes to market. See CS Ex. 10 (chart listing all of the NPF note issuances and identifying the underwriter for each issuance). Over time, and particularly from 1998 to 2002, Credit Suisse became the predominant placement agent for the NPF notes. See id,.; see also Az. Ex. 199 (August 30, 2000 agreement by which National Century granted Credit Suisse the right to serve as the sole lead in placing additional note offerings until Credit Suisse received at least $15 million in upfront fees). In this same time frame, the total dollar amount of each note issuance increased substantially from the pre-1998 issuances. See CS Ex. 10.

Credit Suisse’s involvement with National Century can be traced to late 1995, when the parties entered into a letter agreement whereby Credit Suisse agreed to be National Century’s “agent and financial advisor in connection with the marketing” of two $50 million note offerings by NPF VI. CS Ex. 19 at ¶ 1. The letter agreement called on Credit Suisse to “structure, market and place the [note] Offerings.” Id. Shortly thereafter, in early 1996, Credit Suisse entered into a Placement Agency Agreement with National Century, NPF VI, and the Servicer. See CS Ex. 36. The agreement required Credit Suisse to privately place the notes with qualified institutional buyers in return for a placement fee of 1% of the principal amount of notes sold. See id. at 2-4.

The arrangement changed slightly for the later note issuances in which the Note-holders invested. Credit Suisse entered into a series of Purchase and Agency Agreements with National Century, the note-issuing entity (either NPF VI or NPF XII), and the Servicer. See, e.g., CS Ex. 35. These agreements defined Credit Suisse as an “initial purchaser” who would purchase the notes from the issuer at a slight discount, such as 0.6 % less face value. See id. at § 3. Credit Suisse would then work with a placement agent (Banc One Capital Markets, for example) to place the notes with qualified institutional buyers. See id. at 2. Credit Suisse was not contractually required to sell the notes and in fact suffered losses of approximately $130 million from notes it had on hand when National Century collapsed. See CS Ex. 143. 2

*847 Credit Suisse had additional points of involvement with National Century besides serving as the initial purchaser of NPF notes. It was a lender on the NPF WL, a fully-funded revolving warehouse line of credit to National Century. See CS Ex. 230. By the summer of 2000, Credit Suisse had a commitment of $50 million to the NPF WL. Id. In August 2000, Credit Suisse increased its commitment by $20 million by agreeing to purchase the loan of another bank who had declined to renew its commitment in the NPF WL. See Az. Ex. 181. The parties contemplated that National Century would find another lender for the NPF WL and that National Century would pay the $20 million back by September 30, 2000. See id. In late September 2000, National Century requested a two-week extension in paying off the $20 million, which Credit Suisse granted in exchange for a $100,000 fee. See Az. Exs. 59, 189.

Later in 2000, Credit Suisse helped National Century obtain short-term financing under a separate revolving liquidity facility. National Century issued the NPF XII 2000-4 variable funding note (“VFN”), which was backed by healthcare receivables held by NPF XII. See CS Ex. 10. In December 2000, Credit Suisse, New York Branch, entered into a Liquidity Asset Purchase Agreement with NPF' XII and a conduit purchaser whereby Credit Suisse committed to purchase an undivided interest in the VFN upon the occurrence of certain events. See CS Ex. 145 at LL_000108. In turn, Credit Suisse prepared materials and marketed participation interests in the VFN to other banks. See NJ Leivick Exs. 112, 113, 114, 117. On October 31, 2002, the triggering events occurred that required Credit Suisse to purchase its $127 million interest in the VFN. See CS Ex. 192 at LL_002039; CS Ex. 340, Lengel Dep. at 48.

Credit Suisse also extended credit to National Century in the form of a short-term loan in September 2002. National Century requested a $100 million increase in the VFN from Credit Suisse. See CS Ex. 137 at CSFB-EMAIL-0384677; Az. Ex. 146. Credit Suisse declined that request, but later approved a $75 million loan on September 4, 2002. See Az. Ex. 145. The loan was extended to the NPF XII program through the VFN. Id.; CS Reply Ex. 330. Credit Suisse earned $1 million above its usual fees in connection with this loan. See Az Ex. 146 at 2; Az. Ex. 147.

C. The Noteholders and Their NPF Note Purchases

The Noteholders are institutional investors who purchased NPF VI and NPF XII notes. Plaintiff Lloyds TSB Bank pic is a British public limited company with its principal place of business in London, England and an office in New York. Lloyds purchased $60 million in NPF XII 2001-1 notes from Credit Suisse in March 2001. See NJ Vespasiano Decl. at ¶ 3. In the same month, Lloyds and Credit Suisse entered into a Participation Agreement, under which Lloyds assumed a $68 million undivided interest in the VFN. See CS Ex. 219. In exchange, Lloyds received payment of certain fees. See id. at § 4. On November 5, 2002, Lloyds purchased its participation interest from Credit Suisse in the VFN. See CS Ex. 217.

Plaintiffs Metropolitan Life Insurance Company and Metropolitan Insurance and Annuity Company (together, “MetLife”), *848 both with their principal places of business, in New York, purchased a total of $121 million in NPF XII notes from June 2001 to July 2002. All but one purchase was made from Credit Suisse. MetLife purchased $104.5 million of NPF XII Series 2001-1, 2001-2, 2001-4, and 2002-1 notes from Credit Suisse. See NJ Tau Deck at ¶¶ 3-8; NJ Leivick Ex. 50. Credit Suisse served as the initial purchaser for all of these notes. See CS Ex. 10. MetLife made one purchase from Bear, Stearns & Company. This purchase occurred in the secondary market and consisted of $16.6 million of NPF XII 2001-2 notes for which Credit Suisse had been the initial purchaser. See NJ Leivick Ex. 50 at ML_00491516.

The Arizona Noteholder plaintiffs include numerous governmental entities from Arizona and other states, as well as investment funds, banks, insurance companies, trusts and other entities from various states and foreign countries. The Arizona Noteholders collectively purchased over $1.5 billion of NPF VI and NPF XII notes between 1998 and 2002. See CS Ex. 191 (chart listing all of the Arizona Noteholders’ purchases). The great majority of the Arizona Noteholders’ purchases were made directly from Credit Suisse, either at the time of initial issuance or in the secondary market. Id. Approximately $200 million of their purchases were made from an agent or broker other than Credit Suisse. Id. Certain of the Arizona Note-holders (the Asset Allocation & Management plaintiffs, the Clifton Group plaintiffs, Louisiana Corporate Credit Union, and Oregon Insurance Guaranty Association) purchased all of their notes from a source other than Credit Suisse.

D. Procedural Background

The Noteholders have asserted numerous claims against Credit Suisse for its alleged knowing involvement in National Century’s wrongdoing. Their claims have been the subject of several orders of this court. See In re Nat’l Century Fin. Enterprises, Inc., Inv. Litig., 755 F.Supp.2d 857 (S.D.Ohio 2010) (granting summary judgment to Credit Suisse as to the Note-holders’ claims under the Ohio Securities Act); In re Nat’l Century Fin. Enterprises, Inc., Inv. Litig., 541 F.Supp.2d 986 (S.D.Ohio 2007) (largely denying Credit Suisse’s motion to dismiss the Noteholders’ complaints).

Still remaining are the following claims: Lloyds’s claim under § 10(b) of the Securities Exchange Act of 1934 and its claims for fraud, negligent misrepresentation, and breach of contract; MetLife’s claims under § 10(b) and under New Jersey’s securities statute and its claims for fraud and negligent misrepresentation; and the Arizona Noteholders’ claims under the blue sky laws of various states and their claims for fraud, negligent misrepresentation, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, conspiracy, and unjust enrichment. Two of the Arizona Noteholders — Grantham, Mayo, Van Otterloo & Company (GMO) and Pacific Investment Management Company, LLC (PIMCO) — have also asserted fraud-based statutory claims under the laws of Massachusetts .and California, respectively.

Credit Suisse has filed a motion for summary judgment against the claims of all of the Noteholders. The parties have presented oral argument, and the matter is ripe for decision.

II. Standard of Review

Under Federal Rule of Civil Procedure 56, summary judgment is proper if the evidentiary materials in the record show that there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R.Civ.P. 56(a); see Longaberger Co. v. Kolt, 586 F.3d 459, 465 (6th Cir.2009). *849 The moving party bears the burden of proving the absence of genuine issues of material fact and its entitlement to judgment as a matter of law, which may be accomplished by demonstrating that the nonmoving party lacks evidence to support an essential element of its case on which it would bear the burden of proof at trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548 , 91 L.Ed.2d 265 (1986); Walton v. Ford Motor Co., 424 F.3d 481, 485 (6th Cir.2005).

The “mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505 , 91 L.Ed.2d 202 (1986) (emphasis in original); see also Longaberger, 586 F.3d at 465 . “Only disputed material facts, those ‘that might affect the outcome of the suit under the governing law,’ will preclude summary judgment.” Daugherty v. Sajar Plastics, Inc., 544 F.3d 696, 702 (6th Cir.2008) (quoting Anderson, 477 U.S. at 248 , 106 S.Ct. 2505 ). Accordingly, the nonmoving party must present “significant probative evidence” to demonstrate that “there is [more than] some metaphysical doubt as to the material facts.” Moore v. Philip Morris Cos., Inc., 8 F.3d 335 , 340 (6th Cir.1993).

A district court considering a motion for summary judgment may not weigh evidence or make credibility determinations. Daugherty, 544 F.3d at 702 ; Adams v. Metiva, 31 F.3d 375, 379 (6th Cir.1994). Rather, in reviewing a motion for summary judgment, a court must determine whether “the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson, 477 U.S. at 251-52 , 106 S.Ct. 2505 . The evidence, all facts, and any inferences that may permissibly be drawn from the facts must be viewed in the light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 , 106 S.Ct. 1348 , 89 L.Ed.2d 538 (1986); Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 456 , 112 S.Ct. 2072 , 119 L.Ed.2d 265 (1992). However, “[t]he mere existence of a scintilla of evidence in support of the plaintiffs position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252 , 106 S.Ct. 2505 ; see Dominguez v. Corr. Med. Servs., 555 F.3d 543, 549 (6th Cir.2009).

III. Choice of Law

The court has thus far refrained from making a choice-of-law determination for the Noteholders’ common law claims against Credit Suisse. For issues of federal law, a transferee court receiving a case from the Judicial Panel on Multidistrict Litigation applies the law of the circuit in which it is located. In re Cardizem CD Antitrust Litig., 332 F.3d 896 , 912 n. 17 (6th Cir.2003); In re Temporomandibular Joint (TMJ) Implants Prods. Liab. Litig., 97 F.3d 1050, 1055 (8th Cir.1996). For issues of state law, however, the transferee court must apply the state law that would have applied had the cases not been transferred for consolidation. Id.

The court has thus far used Ohio law as its default reference point in evaluating the Noteholders’ common law claims against Credit Suisse and numerous other defendants. At the summary judgment stage, Credit Suisse urges the court to make a choice-of-law determination because it believes the facts demonstrate that New York law should apply.

The parties differ greatly in their approach to this issue. Credit Suisse argues that New York law should apply because *850 Credit Suisse, MetLife, Lloyds, and certain of the Arizona Noteholders have their principal places of business in New York. Credit Suisse also emphasizes that it sold the notes and made its alleged representations from New York. In contrast, Met-Life and Lloyds argue that Ohio law should apply because it was the “center of gravity’ of the fraud in which Credit Suisse participated. The Arizona Note-holders offer yet a different view. They argue that it is not necessary to make a choice of law because a conflict does not exist. If a conflict is found to exist, they contend that the court should examine the matter on an issue-by-issue basis and conclude that the interests of the plaintiffs residing in various states outweigh the interest in applying the law of Credit Suisse’s place of business.

The court finds that it is an appropriate time to make a choice of law. The relevant evidence is undisputed and the parties have fully briefed their positions. Further, there are enough conflicts among the laws of the various states implicated here to make a difference. One such difference is New York’s requirement that the Noteholders prove their fraud claims by clear' and convincing evidence, rather than by a preponderance of the evidence. Compare’ In re Vivendi Universal, S.A. Sec. Litig., 765 F.Supp.2d 512, 534 (S.D.N.Y.2011), with Cornwell v. N. Ohio Surgical Ctr., 185 Ohio App.3d 337, 345 , 923 N.E.2d 1233, 1239-40 (Ohio Ct.App. 2009). Another difference relates to the claims for negligent misrepresentation, for which New York law requires a showing of “a special or privity-like relationship” between the parties. Compare Bonded Waterproofing Servs., Inc. v. Anderson-Bernard Agency, Inc., 86 A.D.3d 527 , 927 N.Y.S.2d 133 , 135 (2011), with Kaufman v. i-Stat Corp., 165 N.J. 94 , 754 A.2d 1188, 1195-96 (2000). Further, several of the Noteholders have asserted “holder” claims, arguing that assurances made by Credit Suisse caused them to refrain from selling their NPF notes. New York law recognizes such a claim in limited circumstances, but many states do not. See In re WorldCom Sec. Litig., 336 F.Supp.2d 310, 318-322 (S.D.N.Y.2004) (surveying the law of various states).

A. Restatement of Conflict of Laws

As a transferee court, this court must apply the choice of law rules of the transferor courts, New Jersey and Arizona. See Rosen v. Chrysler Corp., 205 F.3d 918 , 921 n. 2 (6th Cir.2000). Both states have adopted the Restatement (Second) of Conflicts of Laws (1971). See P.V. v. Camp Jaycee, 197 N.J. 132 , 962 A.2d 453, 460 (2008); Bates v. Superior Ct., 156 Ariz. 46 , 749 P.2d 1367, 1369-70 (1988).

Section 6 of the Restatement identifies general factors that are relevant to any choice of law determination:

(a) the needs of the interstate and international systems,

(b) the relevant policies of the forum,

(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,

(d) the protection of justified expectations,

(e) the basic policies underlying the particular field of law,

(f) certainty, predictability, and uniformity of result, and

(g) ease in determination and application of the law to be applied.

Restatement (Second) of Conflicts of Laws § 6(2).

With respect to torts, the inquiry is which state “has the most significant relationship to the occurrence and the parties under the principles stated in § 6.” Id., § 145(1); see also Camp Jaycee, 962 A.2d *851 at 460 ; Bates, 749 P.2d at 1370 . Contacts to be considered include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the injury occurred,

(c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and

(d) the place where the relationship, if any, between the parties is centered.

Restatement § 145(2).

For claims of fraud and misrepresentation in particular, the Restatement provides that in cases where the plaintiffs reliance and the defendant’s representations took place in the same state, then the law of that state should be applied unless the principles of § 6 dictate otherwise. Id., § 148(1). But when “plaintiffs action in reliance took place in whole or in part in a state other than that where the false representations were made,” the court should consider the following contacts in determining the state that has the most significant relationship to the occurrence and the parties:

(a) the place, or places, where the plaintiff acted in reliance upon the defendant’s representations,

(b) the place where the plaintiff received the representations,

(e) the place where the defendant made the representations,

(d) the domicil, residence, nationality, place of incorporation and place of business of the parties,

(e) the place where a tangible thing which is the subject of the transaction between the parties was situated at the time, and

(f) the place where the plaintiff is to render performance under a contract which he has been induced to enter by the false representations of the defendant.

Restatement § 148(2).

In evaluating the applicable Restatement provisions, courts typically start with the most particularized section — here, § 148 on fraud and misrepresentation— and then turn to the more general guidance in § 145 and the cornerstone principles of § 6. See e.g., Camp Jaycee, 962 A.2d at 461 (describing the tort-specific section as the “point of departure”). The focus throughout is which state has the most significant relationship to the occurrence and the parties. Id.

B. Lloyds

Lloyds contends, without any challenge from Credit Suisse, that it acted in reliance upon Credit Suisse’s alleged misrepresentations and omissions in several locations. Before Lloyds entered into an asset-backed transaction like the ones with Credit Suisse, it conducted a risk assessment by its “Structured Finance New York” unit and a risk analysis by its credit services department in Miami, Florida. See CS Ex. 178, Vespasiano Dep. at 53-56; NJ Vespasiano Decl. at ¶ 15. Once both groups recommended a transaction, the recommendation went to certain individuals in London for final approval. See CS Ex. 178, Vespasiano Dep. at 55-58; NJ Seggins Decl. at ¶¶ 3-4.

Lloyds received materials from Credit Suisse regarding the notes and the Variable Funding Note (“VFN”) at its New York office. See, e.g., NJ Vespasiano Exs. A-J; NJ Mayor Decl. at ¶20. Lloyds argues that it also received materials at its Miami office, but the materials received in Miami did not come directly from Credit Suisse. They were forwarded from Lloyds Structured Finance New York. See NJ Swaby-Hinds Decl. at ¶¶ 3, 6; NJ Leivick Ex. 119. Moreover, Lloyds attended a *852 presentation by National Century at Credit Suisse’s New York offices. See NJ Leivick Ex. 100, Mayor Dep. at 161.

Credit Suisse dealt with Lloyds from its New York office. Nonetheless, Lloyds argues that the representations came in part from Ohio because the offering materials were “issued out of Ohio.” Lloyds is correct that, to the extent that the offering materials can be attributed to any one particular state, Ohio has ties as strong as the ties of any other state. The materials were authored at least in part by National Century and its legal counsel in Ohio, with the input of other parties involved in the securitization programs. Even so, Credit Suisse’s input on the materials originated from its Asset Finance Group in New York. See CS Ex. 83, O’Connell Dep. at 18-20; CS Exs. 103, 104. And in any event, where the offering materials were authored is not of greater importance than where Credit Suisse provided them to Lloyds. It is undisputed that New York is the state from which Credit Suisse provided materials to Lloyds and otherwise made representations to Lloyds.

The parties’ places of business also point to a strong connection with New York. Lloyds, a British bank with it principal place of business in London, established its American offices in New York and Miami, but it accounted the NPF transactions to the Structured Finance New York unit. See CS Ex. 178, Vespasiano Dep. at 38; CS Ex. 218. Credit Suisse, a Delaware corporation and subsidiary of the Swiss bank Credit Suisse Group AG, has its principal place of business in New York. See Restatement § 148, cmt. i (stating that the place of business is typically more important than the place of incorporation).

According to Lloyds, factor (e) — the place where the subject of the transaction is situated — weighs in favor of Ohio because the assets that collateralized the notes were held in National Century accounts with Trustee Bank One in Ohio. This is a strained application of factor (e). Lloyds did not purchase the accounts receivable held in Ohio; it acquired a security interest in them. The Restatement makes clear that factor (e) has importance when the subject of the transaction is a “tangible thing,” particularly when “the subject of the transaction is land.” Restatement § 148, cmt. i.

The final factor of § 148 is the place where the plaintiff is to render performance under a contract which he has been induced to enter by the false representations of the defendant. This factor has no real application to Lloyds purchase of NPF XII 2001-1 notes, but Lloyds does concede that the parties agreed that the Participation Agreement relating to the VFN investment would be governed by New York law. See CS Ex. 219 at § 15.

The court concludes that under § 148, New York has the most significant relationship to the occurrence and the parties. The first three factors of § 145 support the same conclusion. However, Lloyds argues that factor (d) of § 145 — the place where the parties’ relationship is centered — and the principles of § 6 support application of Ohio law. Lloyds contends that this litigation is about an Ohio-based fraud and describes Ohio as the center of gravity of National Century’s fraud. Lloyds points out some of the many ways in which the litigation has Ohio connections: the notes sold by Credit Suisse were originally issued from Ohio; the Master Indentures governing the note programs had an Ohio choice-of-law provision; the NPF bank accounts were held in Ohio; and Credit Suisse’s due diligence of National Century was conducted in Ohio. Lloyds argues that Ohio has a strong interest in securing an honest marketplace and that it is the state with the greatest *853 interest in having its law applied to the participants in the fraud.

The court is not persuaded by Lloyds’s argument for focusing on the center of gravity of the overall National Century fraud. The Restatement instructs courts to give separate consideration to each issue in a case. See Restatement § 145, cmt. d. The approach of Lloyds is to Jump everything together and arrive at the conclusion that Ohio was home to the fraud. Lloyds even cites the decision of the Judicial Panel on Multidistrict Litigation to consolidate and transfer the various actions to this court. The Restatement requires greater precision, and the Judicial Panel’s rationale for choosing an Ohio court to oversee the National Century multidistrict litigation does not dictate the choice of law for a particular issue within the litigation.

Lloyds’s tort claims present the issue of whether Credit Suisse made misrepresentations to Lloyds in relation to the note purchase and the Participation Agreement. The case is about Credit Suisse’s alleged fraud. The fraud at National Century matters to the extent Credit Suisse knew or should have known of it. That National Century was located in Ohio is of no overriding significance, and there is no evidence that National Century’s location was relevant to any of Lloyds’s investment decisions. Thus, the focus for choice-of-law purposes should be on the securities transactions between Credit Suisse and Lloyds, and not on the overall National Century fraud. Credit Suisse and Lloyds dealt with each other in New York — that is where their relationship was centered. See Restatement § 145(2)(d). The parties should have expected New York law to apply (indeed, they contracted for as much in the Participation Agreement), and New York has the greatest interest in regulating the alleged fraudulent transactions that took place almost fully within its boundaries (saving for the steps requiring Lloyds personnel in Miami and London to approve the note purchase). See Restatement § 6(2). Accordingly, the court will apply New York law in evaluating the fraud and negligent misrepresentation claims of Lloyds.

C. MetLife

MetLife argues that if the court rejects applying Ohio law, then New Jersey is the state with the most significant relationship to its claims. Two MetLife entities purchased notes from Credit Suisse: Metropolitan Life Insurance Company, a New York corporation with its principal place of business in New York, and Metropolitan Insurance and Annuity Company, a Delaware corporation with its principal 'place of business in New York. Despite the apparent connections to New York, MetLife states that it acted out of a New Jersey office in dealing with Credit Suisse. MetLife’s Asset-Backed Securities Unit in New Jersey received sales materials and other communications from Credit Suisse and also hosted a May 2001 “roadshow” presentation put on by National Century and attended by a Credit Suisse representative. See NJ Tau Decl. at ¶ 2; NJ Fretwell Decl. at ¶ 2; NJ Leivick Exs. 62-64. Moreover, the unit in New Jersey made the decision to purchase the notes. See NJ Tau Decl. at ¶ 2; NJ Fretwell Decl. at ¶ 2.

Both parties can therefore claim two § 148 factors in their favor. MetLife received representations and acted in reliance upon those representations in New Jersey. Credit Suisse made the representations from New York, 3 which is also where Credit Suisse and MetLife have *854 their principal places of business. The comments to § 148 offer inconclusive guidance. When the loss is strictly pecuniary, the place of loss has less importance and the place where the defendant made the representations has greater importance than when the injury is to persons or tangible things. See Restatement § 148, cmt. c. This supports Credit Suisse’s argument for applying New York law. But in support of MetLife’s position, the comments suggest that the place of reliance has somewhat more importance than the place where the defendant made the representation. Id., cmt. f. New Jersey case law also could support either side. Compare Fink v. Ricoh Corp., 365 N.J.Super. 520 , 839 A.2d 942, 988 (N.J.Super. Law Div.2003) (putting greatest weight in the place where plaintiffs received and acted in reliance upon representations) with In re Mercedes-Benz Tele Aid Contract Litig., 257 F.R.D. 46, 68 (D.N.J.2009) (holding that the place where the defendant made the representations outweighed other § 148 factors).

Looking to § 6 and § 145 of the Restatement, the court finds that New York law should apply to MetLife’s claims. New York has the greatest interest in regulating the securities transactions that occurred here between two of its own companies. See Restatement § 6(2)(c) and cmt. f (“In general, it is fitting that the state whose interests are most deeply affected should have its local law applied.”); Restatement § 145 cmt. b (court may consider competing state interests in regulating the conduct). It is true that New Jersey was the location of the MetLife employees most involved with the purchases, but at the end of the day these were securities transactions between two New York businesses. Credit Suisse and MetLife undoubtedly are accustomed to operating under New York law and under the Martin Act in particular, as both parties engage frequently in securities transactions. See Restatement § 6(2)(f) and (g) (court may consider the interests of predictability and ease in the application of the law to be applied); Restatement § 145 cmt. b (same). Thus, there is nothing unfair about holding MetLife’s common law claims to the standards of New York, even if those standards are more stringent than those of New Jersey law.

Viewing this matter as an alleged fraud between a New York seller and New York buyer (who happened to negotiate through its agents in New Jersey), the court concludes that the relevant considerations of the Restatement weigh in favor of applying New York law.

D. The Arizona Noteholders

There are approximately 118 remaining Arizona Noteholder plaintiffs. 4 When counting the plaintiffs’ places of incorporation or organization, principal places of business, and places where certain plaintiffs are governmental entities, the plaintiffs come from 26 states, the District of Columbia, 9 foreign countries, 2 British Overseas Territories, and 1 British Crown Dependency.

*855 Of these plaintiffs, 13 have principal places of business in New York and one more is incorporated in New York. This means that New York has more plaintiffs organized under its laws or with a principal place of business in its borders than does any other state or foreign jurisdiction. 5 Illinois is home 10 plaintiffs, and the Cayman Islands are home to 8 plaintiffs.

The Arizona Noteholders’ argument against applying New York law depends heavily on a comment to Restatement § 145: “When certain contacts involving a tort are located in two or more states with identical local law rules on the issue in question, the case will be treated for choice-of-law purposes as if these contacts were grouped in a single state.” Restatement § 145, cmt. i. They contend that the contacts of the non-New York plaintiffs should be aggregated because the laws of all of the implicated states are identical with respect to fraud and negligent misrepresentation. They argue that the contacts of the non-New York plaintiffs, once aggregated, easily outnumber and outweigh the contacts of the New York plaintiffs.

Comment i to Restatement § 145 has limited value here. The illustration to the comment shows that it relates to aggregating the multi-state contacts of a single party, not aggregating the various contacts of numerous plaintiffs. See Restatement § 145, Illustration 4. Even more importantly, New York’s contacts go far beyond the 14 plaintiffs who are organized or have their principal places of business there, and this makes the Arizona Noteholders’ attempt to cast those 14 plaintiffs as a small minority inappropriate. Many plaintiffs purchased notes through investment advisors, including some non-New York plaintiffs who purchased notes through New York agents. Twenty-five entities purchased the notes owned by the Arizona Noteholders. See Az. App’x at ii. Some of these entities, like PIMCO and Alliance Capital Management (ACM), are investment advisors who acted on behalf of numerous plaintiffs. Others, like United of Omaha Life Insurance Company, are singular plaintiffs who purchased notes on their own behalf. Of these 25 purchasing entities, 4 are located in New York: ACM, Ambac, Dreyfus, and Mutual of New York (MONY). New York is home to twice as many purchasing entities as the next closest jurisdictions — Illinois and the Cayman Islands, both of which have 2 purchasing entities. And New York purchasing entities invested more in NPF notes, $467 million, than the purchasing entities of any other jurisdiction. The next highest was California, home to PIMCO, which invested $440 million in notes.

There are 7 purchasing entities located in foreign jurisdictions, including France, Italy, Luxembourg, the United Kingdom, Bermuda, and the Cayman Islands. For these foreign plaintiffs, New York law is the most natural choice. Six of the foreign purchasing entities directed their contacts to New York. See Az. App’x at 18-20 (RenaissanceRe in Bermuda and the European Bank for Reconstruction and Development in London dealt with representatives of Credit Suisse’s New York office); id. at 24 (Highland plaintiffs of the Cayman Islands traveled to New York City to meet with representatives of National Cen *856 tury and Credit Suisse); Az. Ex. 329, Dieudonne Dep. at 95-101 (Ofivalmo of France dealt with representatives of Credit Suisse’s New York office); Az. Ex. 386, DiMario Dep. at 45-46 (SanPaolo IMI of Italy visited Credit Suisse’s offices in New York); Az. Ex. 392, Kizner Dep. at 271 (Drake of Cayman Islands dealt with representatives of Credit Suisse’s New York office).

Thus, the contacts with New York are many and strong. New York is home to the seller Credit Suisse, which made representations and sold the notes from New York. More plaintiffs are organized under the laws of or have their principal places of business in New York than in any other state. New York has the most purchasing entities, and New York purchasing entities bought more NPF notes, in terms of dollar value, than did the purchasing entities of any other state. New York was also the primary point of contact within the United States for the foreign plaintiffs. Finally, for the American-based plaintiffs with places of organization or principal places of business in states other than New York, it is clear from the materials submitted— particularly in the plaintiff-specific appendix (attached to doc. 1581) regarding how plaintiffs received and relied on Credit Suisse’s alleged misrepresentations — that those plaintiffs knew they were dealing with a New York seller. The court accordingly will apply New York law to the Arizona Noteholders’ tort claims.

IV. New York’s Martin Act

Credit Suisse has argued that the Note-holders’ claims for negligent misrepresentation and aiding and abetting breach of fiduciary duty are precluded by New York’s Martin Act. Many courts have held that the Martin Act, N.Y. Gen. Bus. Law § 352 et seq., preempts common law claims relating to securities transactions if the claim does not require proof of intent. See e.g., In re Wachovia Equity Sec. Litig., 753 F.Supp.2d 326, 380-81 (S.D.N.Y.2011) (citing cases). These courts reasoned that the Martin Act gives the New York Attorney General exclusive authority to prosecute such claims and that no private right of action is allowed. See In re Beacon Assocs. Litig., 745 F.Supp.2d 386, 431-32 (S.D.N.Y.2010).

New York’s highest court, however, has now held that the Martin Act does not preempt common law causes of action arising out of a securities transaction. In Assured Guar. (UK) Ltd. v. J.P. Morgan Inv. Mgmt. Inc., 18 N.Y.3d 341 , 939 N.Y.S.2d 274 , 962 N.E.2d 765 (2011), the plaintiff asserted claims for breach of fiduciary duty and gross negligence relating to securities transactions. The court found that the Martin Act’s language contains no preemptive language and that the statute’s purpose would be best served by allowing nonfraud common law claims to proceed. It concluded that “an injured investor may bring a common-law claim (for fraud or otherwise) that is not entirely dependent on the Martin Act for its viability. Mere overlap between the common law and the Martin Act is not enough to extinguish common-law remedies.” 939 N.Y.S.2d 274 , 962 N.E.2d at 770-71 .

Accordingly, Credit Suisse’s argument that the Martin Act preempts the Note-holders’ claims for negligent misrepresentation aiding and abetting breach of fiduciary duty must be rejected.

V. Whether Certain Tort Claims are Precluded by Breach of Contract Claims

Credit Suisse argues that certain tort claims asserted by Lloyds and the Arizona Noteholders are precluded because they duplicate their respective breach of contract claims. Credit Suisse raised this same argument in its motion to dismiss and the court agreed that “ ‘the *857 existence of a contract action generally excludes a cause of action based upon the same conduct sounding in tort,’ ” but denied the motion because the rules of civil procedure allow a party to assert inconsistent claims at the pleading stage. In re Nat’l Century Fin. Enterprises, Inc., Inv. Litig., 541 F.Supp.2d 986, 1016 (S.D.Ohio 2007) (quoting Hanlin v. Ohio Builders and Remodelers, Inc., 196 F.Supp.2d 572, 579 (S.D.Ohio 2001)).

Credit Suisse argues that it is now appropriate at the summary judgment stage to preclude any tort claims that arise from the same operative facts as the breach of contract claims. Under New York law, a party’s breach of contract cannot form the basis for a tort claim “unless a legal duty independent of the contract itself has been violated.” Clark-Fitzpatrick, Inc. v. Long Island R.R. Co., 70 N.Y.2d 382 , 521 N.Y.S.2d 653 , 516 N.E.2d 190, 193-94 (1987) (citations omitted). This legal duty must not arise from circumstances constituting the elements of the contract claim, but from circumstances “extraneous” or “collateral” to the contract claim. Id.; Gruet v. Care Free Housing Div. of Kenn-Schl Enterprises, Inc., 305 A.D.2d 1060 , 759 N.Y.S.2d 276, 278 (2003); Calcutti v. SBU., Inc., 223 F.Supp.2d 517, 521 (S.D.N.Y.2002); Ladenburg Thalmann & Co., Inc. v. Imaging Diagnostic Sys., Inc., 176 F.Supp.2d 199, 206 (S.D.N.Y. 2001).

When a fraud-based claim is simultaneously asserted with a breach of contract claim, a court should look to the existence of the following in determining whether the fraud-based claim is precluded: (1) a legal duty separate from the duty to perform under the contract; (2) a fraudulent misrepresentation collateral or extraneous to the contract; and (3) damages caused by the misrepresentation and unrecoverable as contract damages. MacQuesten Gen. Contracting, Inc. v. HCE, Inc., 191 F.Supp.2d 407, 410 (S.D.N.Y.2002); Ladenburg Thalmann, 176 F.Supp.2d at 206 (holding that a fraud claim was precluded because it was based on the “same operative facts” and “same damages” as the breach of contract claim).

A. Lloyds

The breach of contract claim brought by Lloyds relates to the Participation Agreement it entered into with Credit Suisse on March 1, 2001. Lloyds alleges that three provisions of the Agreement were breached. First, Lloyds contends that Credit Suisse breached a provision in which it promised not to consent to the modification of certain NPF XII transaction documents without Lloyds’s approval. See CS Ex. 219 at § 7. According to Lloyds, Credit Suisse breached this provision because it knew of material violations of the transaction documents, particularly the Master Indenture, yet purchased its interest in the VFN without informing Lloyds of the violations. This allegedly amounted to a waiver or modification by Credit Suisse of the requirements set forth in the Master Indenture.

Second, Lloyds alleges that the Agreement imposed a duty.of care on Credit Suisse to not act with “gross negligence or willful misconduct.” CS Ex. 219 at § 10(a). Lloyds argues that Credit Suisse breached its duty by failing to advise Lloyds of National Century’s violations of the Master Indenture. Lloyds further alleges that Credit Suisse acted wilfully and with gross negligence when it made the decision to purchase its interest in the VFN and trigger Lloyds’s’ obligations under the Agreement, despite knowing of the violations of the Master Indenture.

Third, Lloyds alleges that Credit Suisse assumed a “responsibility for information prepared by it and furnished to [Lloyds]” in connection with the Agreement. CS *858 Ex. 219 at § 12(a). Credit Suisse allegedly breached this duty by furnishing Lloyds with a January 2011 sales document (the “term sheet”), which contained misrepresentations about National Century’s operations. See CS Ex. 253. The term sheet allegedly misrepresented that NPF XII would, among other things, purchase eligible receivables, maintain reserve accounts at certain levels, over-eollateralize the receivables, and be bankruptcy remote.

Lloyds also brings tort claims for fraud and negligent misrepresentation relating to its investment in the VFN. Its tort claims are based on alleged misrepresentations and material omissions about National Century’s operations in the materials that Credit Suisse gave to Lloyds, including private placement memoranda, the term sheet, and the VFN (which incorporated the Master Indenture by reference). Lloyds alleges that Credit Suisse is liable for the misrepresentations and omissions in those materials because, having undertaken to speak in the transaction, Credit Suisse had a duty to speak truthfully and completely. See Rubin v. Schottenstein, Zox & Dunn, 143 F.3d 263, 268 (6th Cir. 1998) (en banc).

The court concludes that the tort claims of Lloyds are duplicative of its breach of contract claim. Lloyds strains to argue that Credit Suisse owed a duty independent from the duty to perform the contract because Credit Suisse chose to supply offering materials relating to the proposed participation of Lloyds in the VFN. However, the parties’ dealings culminated in a written contract, the Participation Agreement, which Lloyds itself contends contained provisions imposing a duty of care on Credit Suisse. Lloyds is unable to explain how an independent duty could exist when sections 10 and 12 of the Agreement defined the scope of Credit Suisse’s alleged duty of care with respect to the information it supplied to Lloyds. See International Cabletel Inc. v. Le Groupe Videotron Ltee, 978 F.Supp. 483, 486 (S.D.N.Y.1997) (“It is well settled under New York law that a contract action cannot be converted to one for fraud merely by alleging that the contracting party did not intend to meet its contractual obligations.”) (quotation marks and citations omitted).

Moreover, the same alleged misrepresentations form the basis of both types of claims. In its contract claim, Lloyds alleges that Credit Suisse breached the Agreement by failing to advise Lloyds of National Century’s violations of the Master Indenture and by misrepresenting in the term sheet how National Century ran its operations. Lloyds’s tort claims are based on the exact same misrepresentations and omissions. Lloyds argues that its tort claims are “broader” in the sense that the contract claim relates just to the term sheet’s misrepresentations, while the tort claims additionally relate to alleged misrepresentations in other documents; however, the alleged misrepresentations and omissions in the other documents concerned the same subject matter as the term sheet’s misrepresentations — National Century’s violations of the Master Indenture. In other words, Lloyds has not identified a “collateral” or “extraneous” misrepresentation separate from the alleged promises made in the Participation Agreement. See Astroworks, Inc. v. Astroexhibit, Inc., 257 F.Supp.2d 609, 616-17 (S.D.N.Y.2003) (allowing fraud claims to survive a motion dismiss but cautioning the plaintiff that “[i]f discovery reveals that the agreement between [the parties] included all of the promises that [plaintiff] alleges in his fraud claim, then the fraud claim will be dismissed at summary judgment”).

Finally, Lloyds has not shown any damages caused by the misrepresentations *859 that are not recoverable as contract damages. Its alleged tort damages are the lost $68 million investment in the VFN. This is the same amount of damages as the breach of contract claim. And the alleged breach of contract was that Credit Suisse failed to perform the Participation Agreement by disclosing the true nature of National Century’s operations, which is the same alleged cause of Lloyds’s alleged tort damages.

In sum, the court finds that the tort claims of Lloyds relating to the YFN are precluded because they are based on the same operative facts and “same damages” as the breach of contract claim.

B. The Arizona Noteholders

In response to the motion for summary judgment, the Arizona Noteholders state that they are voluntarily dismissing their breach of contract claim. Even so, Credit Suisse argues that the existence of the contract claim in the complaint is sufficient grounds for excluding the tort claims.

Credit Suisse is correct in theory that, if the parties entered into a contract which by operation of New York law precluded plaintiffs’ tort claims, then plaintiffs could not salvage their tort claims by tactically dismissing the contract claim. But that is not the case here. Unlike Lloyds, the Arizona Noteholders did not enter into any written agreements with Credit Suisse. Discovery has shown that Credit Suisse’s contractual obligations to the Arizona Noteholders at most amounted to delivering a certain quantity of NPF notes at a certain price. See, e.g., CS Reply Ex. 600 (trade confirmation). Thus, there is no contract here that would act to preclude the Arizona Noteholders’ tort claims, and the court finds that the Arizona Noteholders’ tort claims are not precluded.

VI. Section 10(b), Fraud, and Negligent Misrepresentation Claims

Lloyds and MetLife bring claims against Credit Suisse for violations of Section 10(b) of the Securities Exchange Act of 1934. Section 10(b) makes it unlawful to “use or employ, in connection with the purchase or sale of any security ..., any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe.... ” 15 U.S.C. § 78j(b). Rule 10b-5 prohibits “mak[ing] any untrue statement of a material fact or ... omit[ting] to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading.” 17 C.F.R. § 240 .10b-5(b).

In order to prevail on a § 10(b) claim, a plaintiff must prove that, in connection with the purchase or sale of securities: (1) the defendant made a misrepresentation or omission (2) of a material fact (3) with scienter (4) justifiably relied on by plaintiffs (5) and proximately causing injury. Frank v. Dana Corp., 646 F.3d 954, 958 (6th Cir.2011); Helwig v. Vencor, Inc., 251 F.3d 540, 554 (6th Cir.2001) (en banc).

Lloyds and MetLife also brings claims for fraud, as do the Arizona Note-holders. 6 The elements of this claim under New York law are: “a representation *860 of material fact, the falsity of that representation, knowledge by the party who made the representation that it was false when made, justifiable reliance by the plaintiff, and resulting injury.” Centro Empresarial Cempresa S.A. v. America Movil, S.A.B. de C.V., 17 N.Y.3d 269 , 929 N.Y.S.2d 3 , 952 N.E.2d 995, 1000 (2011); see also Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553 , 883 N.Y.S.2d 147 , 910 N.E.2d 976, 979 (2009). Fraud claims must be proved by clear and convincing evidence. See e.g., In re Vivendi Universal, S.A. Sec. Litig., 765 F.Supp.2d 512, 534 (S.D.N.Y.2011). “Clear and convincing evidence is evidence that makes the fact to be proved highly probable.” Century Pacific, Inc. v. Hilton Hotels Corp., 528 F.Supp.2d 206, 219 (S.D.N.Y.2007) (internal quotation marks omitted).

Finally, all of the Noteholders bring claims for negligent misrepresentation, the elements of which are: “(1) the defendant had a duty, as a result of a special relationship, to give correct information; (2) the defendant made a false representation that he or she should have known was incorrect; (3) the information supplied in the representation was known by the defendant to be desired by the plaintiff for a serious purpose; (4) the plaintiff intended to rely and act upon it; and (5) the plaintiff reasonably relied on it to his or her detriment.” Hydro Inv., Inc. v. Trafalgar Power, Inc., 227 F.3d 8 , 20 (2d Cir.2000); MatlinPatterson ATA Holdings LLC v. Federal Express Corp., 87 A.D.3d 836 , 929 N.Y.S.2d 571 , 575-76 (2011).

The court notes from the outset that the element of materiality is not seriously in dispute. The misrepresentations that the Noteholders seek to attribute to Credit Suisse go to the core of how the NPF programs supposedly functioned. These included, among other things, that NPF VI and NPF XII would use note proceeds to purchase only eligible receivables, would limit the use of funds in reserve accounts to certain purposes, and would maintain reserve accounts at certain percentage levels. The Noteholders also seek to hold Credit Suisse responsible for omitting any statements that would have disclosed National Century’s extensive practice of engaging in related party transactions. These misrepresentations and omissions naturally were material to an investor interested in purchasing NPF notes, particularly because the notes were secured by the receivables. These misrepresentations conveyed to investors “why the bonds [were] worth buying.” CS Ex. 216, Hutchings Dep. at 179. Certainly, reasonable investors would have considered it important to know that National Century intended to misuse their money.

A. Misrepresentation or Omission of Material Fact

The Noteholders received various forms of communication about the NPF notes. These included private placement memoranda and supplements (collectively the “PPMs”), “Sales Points” brochures, road show presentations, and various emails and telephone calls. Credit Suisse argues that it did not make any misrepresentations to the Noteholders. This argument has two components. The first relates to those statements for which Credit Suisse says it is not responsible because it was not the author or speaker. The second relates to those statements that Credit Suisse admits to having made but says were factually accurate and thus not actionable as misrepresentations.

1. Private Placement Memoranda

The PPMs served as the primary source of information about the NPF notes for many of the Noteholders. It is undisputed that these materials were replete *861 with material misrepresentations about how the note programs would operate. Credit Suisse, however, argues that it did not draft the PPMs and thus cannot be held responsible for their content. Credit Suisse contends that the issuers (NPF VI or XII) and their legal counsel authored the PPMs. See CS Ex. 26, Purcell Dep. at 81-82, 84-86; CS Ex. 32 (showing that counsel for National Century helped draft PPMs for issuances prior to Credit Suisse’s involvement).

The Noteholders dispute this point and submit evidence showing that Credit Suisse did indeed have input in the PPMs. For the note transactions at issue in this case, counsel for Credit Suisse, Kaye Scholer, took the PPMs from prior transactions and used them as a template or starting place for preparing the PPMs that were distributed to the Noteholders. See Az. Ex. 18, O’Connell Dep. at 13-20. The PPMs were tailored as needed for each note issuance. Id. The preparation of the PPMs involved a process that Credit Suisse’s counsel and its Rule 30(b)(6) witness described as “collaborative” and done with the participation of Credit Suisse, the issuers, and counsel for both. Id.; Az. Ex. 11, Donovan Dep. at 472-74; 7 see also CS Exs. 103, 104 (showing Credit Suisse’s edits to a draft PPM). Credit Suisse considered the PPMs to be “shared productfs]” over which it exercised some degree of control over the content before it distributed them to investors. Az. Ex. 11, Donovan Dep. at 474-76; Az. Ex. 18, O’Connell Dep. at 24 (testifying that Credit Suisse had the right to approve the contents of the PPMs). Thus, Credit Suisse had the authority to suggest making disclosures in the PPMs — disclosures of, for instance, specific ways in which the note programs’ operations had varied from the requirements of the Master Indentures. See NJ Leivick Ex. 43, Fasanella Dep. at 462-64; Az. Ex. 11, Donovan Dep. at 223-25 (testifying that Credit Suisse considered disclosing in the PPMs the existence of related party transactions but chose not to do so).

Credit Suisse responds that it did not “control” the content of the PPMs and ultimately the PPMs belonged to the issuers. Credit Suisse attempts to cast the issue of attribution as an either-or situation: the PPMs either belonged to the issuers or Credit Suisse, but not to both. However, a factfinder could reasonably find from the available evidence that the PPMs should be attributed to the issuers and to Credit Suisse. The Noteholders have produced testimony and evidence that the PPMs were a shared product. Credit Suisse’s own witnesses testified of playing a role in drafting and preparing the PPMs and of exercising control over their content. The PPMs displayed the Credit Suisse name prominently on the front pages and told potential investors that Credit Suisse was “specifically designated” to make representations about the notes. See, e.g., CS Ex. 227 at 1, 4. This is sufficient to create a triable issue as to whether Credit Suisse can be held liable for the misrepresentations in the PPMs. See Janus Capital Group, Inc. v. First Derivative Traders, — U.S. -, 131 S.Ct. 2296, 2302, 2305 , 180 L.Ed.2d 166 (2011) (holding that the key to § 10(b) liability is whether a party has “control over a statement’s content and whether and how to communicate it,” and placing importance in whether “anything on the *862 face of the prospectuses indicates that any statements therein came from [defendant]”).

Moreover, Credit Suisse’s focus on the PPMs “belonging” to the issuers ignores the fact that it was Credit Suisse who took these statements and put them into investors’ hands. Even if Credit Suisse did not author every word in the PPMs, it did communicate them to investors. See Janus Capital, 131 S.Ct. at 2303 (rejecting the argument that § 10(b) liability requires that the defendant “create” the statement). It is fraud to knowingly provide false information to another person, regardless of who originally drafted the words. As the Seventh Circuit held, “One doesn’t have to be the inventor of a lie to be responsible for knowingly repeating it to a dupe.” S.E.C. v. Lyttle, 538 F.3d 601, 604 (7th Cir.2008). And under New York law, one may liable for fraud accomplished through the “exhibition” of a false.document. Lukowsky v. Shalit, 110 A.D.2d 563 , 487 N.Y.S.2d 781 , 785 (1985). The Noteholders have produced ample proof to survive the motion for summary judgment that it was Credit Suisse who supplied them with the PPMs. See, e.g., NJ Vespasiano Ex. A (Lloyds); NJ Ex. Tau Ex. B (MetLife); Az. Opp’n Brief at 55 n.78 (citing numerous evidentiary sources showing that Credit Suisse supplied them with PPMs). With Credit Suisse having played a role in preparing the PPMs and having provided them to the Noteholders, the real issue is less one of attribution and more one of knowledge (i.e., did Credit Suisse know that the information it supplied to the Noteholders was false?).

Credit Suisse further contends that it owed no duty to the Noteholders to verify the completeness of the PPMs. Though the Master Indentures prohibited related party transactions, see CS Ex. 11 at § 4.11(c); CS Ex. 12 at § 4.11(c), the PPMs did not expressly make a representation to that effect. The Noteholders correctly argue that the PPMs’ omission of National.Century’s practice of related party transactions was material both because of the inherent risks and costs associated with self-dealing and because it constituted a violation of the Master Indentures, which the PPMs expressly referred to as governing the note programs. Further, the court must reject Credit Suisse’s contention that it did not owe a duty to disclose, for one who chooses to speak, as Credit Suisse did, in a securities transaction undertakes a duty to speak truthfully and completely about the matters on which he speaks. See Rubin v. Schottenstein, Zox & Dunn, 143 F.3d 263, 268 (6th Cir.1998) (en banc).

2. Road Show Presentations and Joint Meetings

Credit Suisse facilitated contacts between National Century executives and many of the Noteholders. Road show presentations were one such type of contact. A handful of plaintiffs have demonstrated that they were the recipients of a road show presentation, either in person or online: MetLife, ACM, GMO, Lincoln Capital, and III Finance. Credit Suisse argues that any statements made during the road show presentations cannot be attributed to it because Lance Poulsen made the substantive representations. See CS Ex. 30, Beacham Dep. at 309 (stating that Poulsen did “98 percent of the talking” during the road shows that took place in the summer of 2001).

MetLife has produced evidence that Credit Suisse representative Neil McPherson made specific representations during an October 11, 2000 road show that MetLife viewed online. See NJ Fretwell Ex. A (contemporaneous notes of MetLife’s Simon Fretwell reflecting McPherson’s statements); NJ Leivick Ex. 54 *863 (McPherson’s handwritten presentation notes). In particular, McPherson represented that NPF XII had a “high” quality of underlying assets, “strong credit controls” with “17% cash enhancement” and “3% overcollateralization,” and “strong management.” Id. Credit Suisse contends that these statements are not actionable because words like “high” and-“strong” are mere puffery. However, representations that the note program would operate with cash enhancements of about 17% and with 3% overcollateralization are sufficiently concrete to form the basis of a securities fraud claim. See Indiana State Dist. Council of Laborers and Hod Carriers Pension & Welfare Fund v. Omnicare, Inc., 583 F.3d 935, 943-44 (6th Cir.2009); In re Ford Motor Co. Sec. Litig., Class Action, 381 F.3d 563, 570-71 (6th Cir.2004) (defining non-actionable puffery as “ ‘loosely optimistic statements that are so vague, so lacking in specificity, or so clearly constituting the opinions of the speaker, that no reasonable investor could find them important’ ”) (quoting Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1217 (1st Cir. 1996)).

ACM hosted a presentation by National Century in May 2001. Fasanella of Credit Suisse was present, but ACM is unable to identify any representations that he made. See CS Reply Ex. 57, Gordon Dep. at 140 (testifying that he could not recall what Fasanella said); Az. Ex. 23, Boothe Dep. at 130 (testifying that she could not recall what Fasanella said). 8

GMO also hosted a presentation by National Century in May 2001 and Fasanella was present. Fasanella discussed the timing and pricing of the note issuance, but GMO cannot identify any specific misrepresentations made by him. See Az. Ex. 316, Braggs Dep. at 154-55, 183-88.

The same can be said about Lincoln and III Finance. They both hosted road show presentations by National Century in May 2001 but fail to identify any misrepresentations made by Credit Suisse. See Az. Ex. 354, Glomski Dep. at 191 (Lincoln); Az. Ex. 357, Schneider Dep. at 61-62 (Lincoln); Az. Ex. 393, Maceira Dep. at 69-70 (III Finance).

In addition to the road show presentations, Credit Suisse arranged other meetings or contacts between National Century executives and several of the Arizona Noteholders. See Az. Opp’n Brief at 83-85 (outlining these points of contact). 9 Though the Arizona Noteholders can demonstrate that Poulsen made numerous misrepresentations, they are unable to produce evidence that Credit Suisse made any actionable misrepresentations during these meetings or joint phone calls. See, e.g., *864 Az. Ex. 25, Ennis Dep. at 166, 211-13 (United of Omaha); Az. Ex. 341, Ullman Dep. at 201-02 (Highland). The most that any of the Arizona Noteholders can show is that Fasanella, when asked by plaintiff Wachovia about anonymous allegations of fraud at National Century, gave a statement of “comfort” during a phone call with a National Century executive. Az. Ex. 410, Premo Dep. at 186. Without more specificity, such a vague, loosely optimistic statement is not actionable.

The Arizona Noteholders argue that Credit Suisse should be liable for the misrepresentations Poulsen or other National Century executives made during these joint meetings, even if Credit Suisse itself did not make any misrepresentations. They contend that Credit Suisse knew National Century was making false statements and cannot escape liability for arranging or facilitating meetings in which it had reason to expect the Noteholders would be lied to. The court, however, finds that a cause of action for aiding and abetting fraud — a claim that the Arizona Noteholders have asserted — best fits these facts.

Thus, the court finds that only MetLife has demonstrated that Credit Suisse made actionable misrepresentations to it during a road show presentation or other joint meeting.

3. Sales Points

The Sales Points were prepared by Credit Suisse as summaries of the PPMs. Credit Suisse used them to educate its sales staff about upcoming deals Credit Suisse was bringing to market. Though Credit Suisse labeled the Sales Points as being meant only for internal use, it circulated them to many of the Noteholders, including MetLife and about half of the Arizona Noteholders. See, e.g., NJ Fretwell Ex. B; Az. Ex. 16, Ivascyn Dep. at 106-09; Az. Ex. 421; Az. Ex. 434, Whalen Dep. at 65.

Credit Suisse argues that the statements made in the Sales Points cannot form the basis of a fraud claim because they simply distilled what the PPMs said and because Credit Suisse did not claim to be independently verifying that information. The court disagrees. The Sales Points were approximately 15 pages long and contained detailed statements regarding how the NPF note programs operated. See, e.g., Az. Ex. 309. These statements were sufficiently specific to amount to more than a generalized summary on which an investor could not reasonably rely. And while Credit Suisse attempts to distance itself from the Sales Points as being meant for internal use only and not independently verified, ultimately it was Credit Suisse who composed and provided these materials to the Noteholders and thereby conveyed the misrepresentations contained therein.

4. Various Other Communications

Credit Suisse sales staff made numerous other points of contact with the Noteholders while marketing the NPF notes. These included making numerous telephone and email communications and providing written reports. The Noteholders have carefully documented these many and various communications. See NJ Opp’n Brief at 114-129; Az. Opp’n Brief at 73-82; Az. App’x at 1-49. Credit Suisse admits to having made these communications but argues that they are not actionable because they were either honestly-held opinions, factually accurate, or constituted sales talk or puffery.

The argument as to honestly-held opinions relates primarily to two written reports that Credit Suisse sent to investors: a March 2000 “Healthcare ABS — A Clean Bill of Health” report, and a July 2002 “Market Tabs” report regarding Fitch’s downgrade of NPF notes. See CS Exs. 255, 257. Credit Suisse’s Neil *865 McPherson authored these reports, and Credit Suisse contends that McPherson genuinely believed what he wrote. See, e.g., CS Ex. 256, McPherson Dep. at 193, 257-58, 394-95. Even so, the statements made in the reports went beyond his opinions or beliefs and into specific factual representations about the NPF programs. As with the PPMs, there is no disputing the inaccuracy of those factual representations. For instance, the Clean Bill of Health purported to generally discuss healthcare ABS deals, but it described NPF in particular when detailing how such deals worked and made specific factual representations regarding credit enhancements, the maintenance of reserve levels, concentration limits, and other aspects of the NPF programs — representations that were false. See CS Ex. 255 at 2-10. The July 2002 report sought to reassure investors after Fitch downgraded NPF notes. It misrepresented that, among other things, the note programs had “no significantly increasing receivables aging,” “no significant seller overconcentrations,” and “no significant material deterioration in collateral performance.” CS. Ex. 257 at 4. The report concluded that it was a good time to “add or initiate exposure to NPF healthcare ABS.” Id. In sum, the Noteholders have produced clear and convincing evidence from which a jury could conclude that the two reports contained actionable misrepresentations.

Credit Suisse argues that other communications were factually accurate. One such communication was the term sheet Credit Suisse drafted and sent to Lloyds in connection with the VFN. 10 See CS Ex. 253; NJ Leivick Exs. 109, 110, 111,114 (showing Credit Suisse’s drafting of the term sheet). This term sheet contained many misrepresentations, including that NPF XII: was bankruptcy remote, owned over $1.1 billion in receivables, acquired receivables in “true sale” transactions, had credit enhancement for the notes equal to 20% of the receivables, had ratably secured the notes with receivables, and maintained reserve accounts at specified levels. CS Ex. 253 at CSFBEMAIL-0257075 and -0257085. According to Credit Suisse, the term sheet was accurate because it simply described how the note programs were supposed to operate. However, the court finds that there is at least a genuine dispute about this issue. The cover letter and term sheet make factual representations about NPF XII without cautioning Lloyds with words to the effect that “this is only how the program is supposed to operate” or “we are merely repeating what National Century has told us.” A jury could reasonably find that these representations purported to be specific statements of existing fact about how NPF XII operated. This situation is thus distinguishable from cases holding that true statements of historical fact are non-actionable — where, for instance, a seller accurately states that a security has been given a AAA credit rating. See, e.g., J & R Marketing, SEP v. General Motors Corp., 549 F.3d 384, 393 (6th Cir.2008) (“GMAC’s disclosure of its credit rating was merely a true statement of historical fact.”).

As for the various other personal contacts that members of Credit Suisse’s sales staff had through telephone and email with the Noteholders, Credit Suisse argues that these communications were either puffery or accurately repeated representations made in the PPMs about how the NPF programs were supposed to operate. After a review of the substantial *866 evidence submitted by the Noteholders, the court finds that a jury could reasonably find that the statements made by Credit Suisse constituted actionable misrepresentations. To provide a representative example, Credit Suisse told MetLife’s Mei-Feng Tau in telephone conversations that NPF XII owned $1 billion in receivables, kept certain amounts in reserve accounts, observed a limit on the age of receivables, and had certain payor concentration limits. See NJ Tau Ex. O. Yes, there was some sales talk sprinkled in (National Century had “good” management), but Credit Suisse’s statements went beyond mere sales talk and into specific representations about National Century’s operations. And though Credit Suisse argues that it was only accurately describing statements made in the PPMs, the court has found above that Credit Suisse may be held liable for the misrepresentations in the PPMs. It is no defense for a person to argue that they are merely repeating a lie they have already made before.

The Arizona Noteholders have outlined a host of representations that Credit Suisse sales staff made to them. See Az. Opp’n Brief at 77-82, 85 (accompanied by citations to the evidentiary record). As it did with Lloyds, Credit Suisse made concrete misrepresentations about the NPF programs to the Arizona Noteholders, with some sales talk sprinkled in. A factfinder could reasonably conclude that Credit Suisse’s communications are actionable.

B. Scienter

For § 10(b) claims, scienter “may take the form of knowing and deliberate intent to manipulate, deceive, or defraud, and recklessness.” Frank v. Dana Corp., 646 F.3d 954, 959 (6th Cir.2011) (internal quotation marks omitted). When, as here, the fraud claim is based on misrepresentations of present or past facts, this element is satisfied by showing that the defendant knew or should have known of the falsity of the statements. See Brown v. Earthboard Sports USA, Inc., 481 F.3d 901, 917-18 (6th Cir.2007); PR Diamonds, Inc. v. Chandler, 364 F.3d 671, 681 (6th Cir. 2004) (“In securities fraud claims based on statements of present or historical fact ... scienter consists of knowledge or recklessness.”). Negligence does not suffice; there must be “an extreme departure from the standards of ordinary care,” such that the danger of misleading buyers is “either known to the defendant or is so obvious that the defendant must have been aware of it.” Earthboard Sports, 481 F.3d at 917 -18 (quoting Platsis v. E.F. Hutton & Co., 946 F.2d 38, 40 (6th Cir.1991)).

Similarly under New York law, a plaintiff must demonstrate that the defendant acted with knowledge of the falsity of his statements or with reckless disregard for the truth of the statements. See Old Republic Nat’l Title Ins. Co. v. Cardinal Abstract Corp., 14 A.D.3d 678 , 790 N.Y.S.2d 143, 145 (2005); Klembczyk v. DiNardo, 265 A.D.2d 934 , 705 N.Y.S.2d 743, 744 (1999); see also Morse v. Weingarten, 777 F.Supp. 312, 319 (S.D.N.Y. 1991) (explaining that a fraud claim under New York law is “substantially identical” to a § 10(b) claim).

The crux of this entire litigation quite frankly comes down to what Credit Suisse knew, or should have known, of the wrongdoing at National Century. The court could spend a multitude of pages reviewing the evidence on this matter and the parties’ respective interpretations of the evidence. The parties have taken well over 200 depositions of fact witnesses and exchanged 23 million pages in document discovery. A good amount of that discovery was undoubtedly intended to examine the issue of Credit Suisse’s knowledge. The parties have filed separate volumes of briefs dedicated to this issue, and the evi *867 dence of scienter served as the focal point during oral argument.

That the parties wrote separate volumes regarding exactly what Credit Suisse knew of National Century’s wrongdoing perhaps is a good indication that a genuine dispute of material fact exists. The court’s examination of the record leads it to the conclusion that the Noteholders have submitted clear and convincing evidence from which a jury could reasonably conclude that Credit Suisse knew or should have known of the material aspects of National Century’s fraud. The court finds it unnecessary to discuss this evidence in exhausting detail, but it will review the primary evidence supporting a finding of scienter with respect to the main aspects of National Century’s fraud: (1) purchase of ineligible receivables, (2) misuse of reserve funds, (3) failure to maintain reserve fund levels, (4) related party transactions, and (5) manipulation of receivables default rates. The court will then address Credit Suisse’s arguments in support of it position that it is entitled to summary judgment on the issue of scienter.

1. The Evidence Concerning Credit Suisse’s Knowledge

a. Ineligible Receivables

The PPMs falsely represented that the note programs would use proceeds from the issuances of notes to purchase “eligible receivables.” See e.g., Az. Ex. 2B at NCFE-1865-1134; Az. Ex. 3A at CSFB-2004-0007946. It is well-established that National Century used program assets to purchase receivables that did not satisfy the criteria set forth in the Master Indentures for eligible receivables. Often, National Century “purchased” nothing — it simply advanced money to healthcare providers without receiving anything of value in return. See U.S. v. Poulsen, 655 F.3d 492, 498-99 (6th Cir.2011); U.S. v. Faulkenberry, 614 F.3d 573, 578 (6th Cir.2010) (“The deception centered on the practice of ‘advancing.’ ”).

The Noteholders have submitted substantial evidence in support of the proposition that Credit Suisse knew or should have known that National Century was advancing program assets without receiving eligible receivables in return. This evidence includes:

• a 1994 audited financial statement of National Century was given to Credit Suisse in 1996 in connection with Credit Suisse’s due diligence on its first NPF note transaction as a placement agent. This statement disclosed that National Century “has advanced amounts in excess of receivables provided by certain Providers.... Subsequent to December 31, 1994, the Company has continued to advance funds to certain Providers, thus increasing exposure.” Az. Ex. 74 at CSFB-2004-0051557 to -0051558 11 ;

• public offering working documents were received by Todd Fasanella in connection with an unsuccessful attempt to take National Century’s stock public in 1999. These documents stated that “certain Programs advance funds to clients in excess of the Net Value of the client’s Purchased Receivables and purchase Receivables which have aged beyond 150 days (i.e. which are not Eligible Receivables under the client’s [sale and subservicing agreement] ).” Az. Ex. 262 at CSFB-2004-0034708;

• the 1999 10-K disclosures of PhyAmerica (a large seller of receivables to National Century), were reviewed by *868 Credit Suisse’s counsel in 2000. These indicated that of the $196 million National Century advanced to PhyAmerica in 1999, only $79 million could be attributed to the sale of eligible receivables. Az. Ex. 78 at 28;

• a September 2001 email exchange be- . tween National Century and Fitch, on which Credit Suisse was copied, stated that National Century had increased improper advances to PhyAmerica. Az. Ex. 101; and

• Deloitte & Touche’s August 30, 2002 letter to National Century (on which Credit Suisse was copied) raised “significant questions regarding the eligibility and collectibility of provider receivables” and stated that Poulsen had admitted that “certain receivables would not meet the eligibility requirements of the Master Indentures.” Az. Ex. 129. A member of Credit Suisse’s credit department commented, “This seems like potential fraud.” Az. Ex. 130.

b. Misuse of Reserve Funds

The PPMs misrepresented that funds in the reserve accounts would be used only for certain specified purposes. See e.g., Az. Ex. 2B at NCFE-1865-1140 to -1142; Az. Ex. 3A at CSFB-2004-0007975 to-0007978. For instance, funds in the seller credit reserve account could be drawn only to repay a note program for a purchased receivable that defaulted. The offering materials did not disclose to investors that the reserve funds, which were designed and marketed as a form of credit enhancement for the protection of investors, would be advanced to healthcare providers. Yet this is exactly what happened. See Poulsen, 655 F.3d at 498-99 ; Faulkenberry, 614 F.3d at 578-79 .

The Noteholders have submitted substantial evidence in support of the proposition that Credit Suisse knew or should have known that National Century was misusing the funds in the note programs’ reserve accounts:

• potential equity investor GMAC discovered National Century’s misuse of funds during due diligence and disclosed it to Credit Suisse’s Jonathon Clark and Oliver Sarkozy in October 2000. An internal Credit Suisse email noted that National Century had “got through their cash crunch” by “reserve account movement.” Az. Ex. 120;

• shortly thereafter, Poulsen admitted in a meeting with GMAC and Sarkozy that National Century had used reserve funds to purchase receivables and stated that he could use the funds “for any purpose, including to buy lollipops.” Az. Ex. 103, Gleason Dep. at 148;

• Sarkozy told members of Credit Suisse’s asset finance group — Fasanella, Clark, and Joseph Donovan — by email in November 2000 of National Century’s use of reserve funds to get through a liquidity crisis. Az. Ex. 128;

• Clark attended another meeting on November 29, 2000 with GMAC and National Century about the issue of reserve funds being used to purchase receivables. After the meeting Donovan sent Clark the following email: “How did it go today? Did your nose grow?” Az. Ex. 11, Donovan Dep. at 379 (referring to Pinocchio); Az. Ex. 136A; and

• Fasanella informed Clark again in August 2002 that Poulsen was using reserve funds to buy receivables. Az. Ex. 141; Az. Ex. 10, Clark Dep. at 304, 307.

c. Reserve Account Shortages

Because National Century misappropriated reserve account funds, the reserve *869 levels fell well below the levels at which investors were told they would be maintained. See e.g., Az. Ex. 2B at NCFE-1865-1140 to -1142; Az. Ex. 3A at CSFB2004-0007975 to -0007978. The various accounts had monthly determination dates on which their balances would be checked against the required levels. These dates, however, differed from account to account and National Century hid the vast shortages by: (1) shifting program funds among accounts within a certain NPF program, (2) transferring funds between NPF programs, and (3) obtaining short-term loans or extensions of credit. See Poulsen, 655 F.3d at 499 ; Faulkenberry, 614 F.3d at 579 . In this manner, National Century eluded detection of reserve shortfalls on the determination dates.

The Noteholders again have submitted substantial evidence in support of the proposition that Credit Suisse knew or should have known that National Century failed to maintain reserve accounts at the levels represented to investors:

• a revised NPF VI investor report received by Credit Suisse in April 1999 disclosed an $11 million shortfall in the equity account and a $28 million shortfall in the seller reserve account. Az. Ex. 154;

• in a July 2000 meeting, Poulsen told several Credit Suisse representatives that National Century had “internally produced cash” by moving money between programs. Az. Ex. 175;

• an August 31, 2000 fax to Credit Suisse showed that NPF reserve funds were at $214 million, but based on the reported amount of notes payable, the reserve funds should have been at $333 million. Az. Ex. 157;

• a September 27, 2000 chart (that National Century faxed to Credit Suisse in connection with its request for Credit Suisse to extend the deadline on the $20 million NPF WL commitment) indicated that the note programs had just $110 million, when they should, have had $325 million. Az. Ex. 188. It also indicated National Century’s intentions to use short-term loans and the practice of improper transfers between note programs to cover shortfalls on monthly determination dates. Credit Suisse agreed to the extension in return for a $100,000 fee. Az. Ex. 189;

• in the October 30, 2000 meeting with GMAC, Poulsen disclosed that the equity reserve accounts were routinely below their required levels and even had been drawn down to $0. Az. Ex. 103, Gleason Dep. at 129; Az. Ex. 125. It was clear that National Century had borrowed money (including the lending commitment from Credit Suisse) to cover up the cash shortage. Az. Ex. 105, Gleason Dep. at 123-24;

• in the second meeting with GMAC, the reserve shortages were again discussed. Az. Ex. 103, Gleason Dep. at 166-68;

• in preparation for a proposed private placement of National Century equity, co-placement agent Shattan Group questioned Credit Suisse in May 2001 why reserve levels were low. Az. Exs. 204, 208, 209;

• in June 2001, National Century forwarded to Credit Suisse questions that credit rating agency Fitch had made as to why reserve levels were low and why reserve funds had been commingled. Az. Ex. 42. Fasanella assured Fitch that everything was fine, Az. Ex, 221, prompting Fitch to release it ratings for a NPF XII note offering. Az. Ex. 222.

• in September 2001, Fitch again questioned Credit Suisse why “the reserves are much lower than the specified lev *870 els.” Az. Ex. 44. Fasanella again gave a misleading response. Id.

• potential equity investors Goldman Sachs and CIVC questioned Credit Suisse in January 2002 why “[rjestricted cash has typically been less than provider reserves at month end” and why the shortfalls “have grown” over time. Az. Ex. 211 at CSFB-EMAIL-0030832; and

• knowing in August 2002 that Poulsen had misused reserve funds and that National Century was short on cash, Credit Suisse agreed to make a $75 million short-term loan so that National Century could avoid default. Az. Exs. 142, 145.

d. Related Party Transactions

Many of the funds misappropriated from the NPF programs were directed to healthcare providers in which National Century’s executives held undisclosed ownership interests. Poulsen, 655 F.3d at 498 ; U.S. v. Poulsen, 568 F.Supp.2d 885, 900 (S.D.Ohio 2008). By the time National Century filed for bankruptcy, $2.2 billion of the $2.7 billion in “purchased receivables” listed as assets on the bankruptcy schedule could be attributed to related parties. Az. Ex. 231. Credit Suisse never told any of the Noteholders about the related party transactions. Indeed, it determined that including such a disclosure in the PPMs was unnecessary. Az. Ex. 11, Donovan Dep. at 223-24.

The Noteholders have set forth substantial evidence demonstrating that Credit Suisse knew or should have known of National Century’s practice of advancing funds to related parties:

• the 1994 audited financial statement that Credit Suisse received in 1996 indicated that National Century’s executives held an ownership interest in provider Rx Medical, from whom National Century had purchased receivables. Az. Ex. 74 at CSFB-2004-0051557 and -0051565;

• a draft S-l registration statement for National Century (in connection with a proposed public offering of National Century stock) disclosed that National Century’s executives owned more than a 5% interest in several providers from which it purchased a substantial amount of receivables. Az. Ex. 229 at 2-3. As a member of the IPO working group, Credit Suisse received the draft S-l. Az. Ex. 236 at CSFB-2004-0086356;

• May 2000 faxes from Poulsen to Credit Suisse expressly admitted that National Century held ownership interests in the “two top” providers to the NPF programs. Az. Ex. 85 at CSFB-2004-0021705 and -0021708.

• in the meetings with GMAC in 2000, GMAC questioned why there were a “significant number of sellers and significant number of receivables [related to] companies that were actually owned by the principals of NCFE.” Az. Ex. 103, Gleason Dep. at 107;

• an April 2002 email to potential equity investor Goldman Sachs (an email on which Credit Suisse was copied) identified certain related parties as being providers from which National Century purchased receivables. Az. Ex. 230; and

• Fasanella and Donovan acknowledged in deposition testimony that they knew of related party transactions. Az. Ex. I, Fasanella Dep. at 158-59; Az. Ex. II, Donovan Dep. at 222-23.

e. Manipulation of Receivables Default Rates

The PPMs defined a “defaulted” receivable in terms of its age, payor insolvency, and uncollectibility. See e.g., Az. Ex. 2B at NCFE-1865-1136; Az. Ex. 3A at CSFB-2004-0007972. The PPMs represented *871 that the note programs would monitor the overall rate of defaulted receivables and would increase cash reserves if the rate exceeded a designated percentage. See e.g. Az. Ex. 2B at NCFE1865-1110; Az. Ex. 3A at CSFB-2004-0007942. The PPMs also purported to chronicle the historical program default rates, and they, represented that monthly reports would state, among other things, the current rates of default. See e.g. Az. Ex. 2B at NCFE-1865-1122; Az. Ex. 3A at CSFB-2004-0007955; Az. Ex. 62C at NCFE-1865-1728; Az. Ex. 63A at NCFE-4610-3260. However, it is well-established that National Century manipulated the default rates by removing troubled receivables before they defaulted and had to be reported. These receivables were classified as “other notes” that National Century “purchased” out of the programs. See Az. Ex. 201, Staub Dep. at 30-32, 62; Az. Ex. 202; Az. Ex. 203.

Here too the Noteholders have submitted substantial evidence in support of the proposition that Credit Suisse knew or should have known about the manipulation of the receivables default rates:

• April and May 2001 emails from the Shattan Group told Credit Suisse of accounts receivable that were “out of compliance” and “purchased by NCFE corporate to avoid non-compliance.” Az. Exs. 202, 203;

• an investor report prepared by Credit Suisse in May 2001 attempted to explain the existence of aged receivables that had been removed from the note programs. Az. Ex. 135 at CSFBEMAIL-0021574;

• potential equity investors Goldman Sachs and CIVC questioned Credit Suisse in January 2002 about the “purchase of non-performing program receivables by NCFE [to] reduce bad debt write-offs.” Az. Ex. 211 at CSFB-EMAIL-0030832; and

• a January 31, 2002 email from National Century’s Roger Faulkenberry to Fasanella stating that National Century had purchased “sellers” out of the programs for purposes of “managing the default rate.” Az. Ex. 260.

2. Discussion of Credit Suisse’s Arguments

a. The Reply Statement of Facts

Credit Suisse offers numerous lines of defense as to why the evidence submitted by the Noteholders does not create a genuine issue of fact regarding scienter. One of these is Credit Suisse’s Reply Statement of Facts (doc. 1657), which in broad terms represents Credit Suisse’s attempt to give an explanation for each piece of evidence submitted by the Noteholders. In the court’s view, nothing Credit Suisse presents is so compelling as to force a conclusion that genuine issues of fact do not exist. Rather, at best the Reply Statement of Facts takes small chips out of the mountain of evidence presented by the Noteholders.

For instance, Credit Suisse contends that other third parties also knew of some of the information (such as the audited financial statements and April 1999 revised investor report) that was presented to Credit Suisse, yet they were not alarmed. Credit Suisse argues that because the information troubled no one else, that information must not have truly indicated that National Century had done anything wrong. Further along those lines, Credit Suisse contends that for other pieces of information, third parties (such as the Indenture Trustees) assured Credit Suisse that there was nothing to worry about. According to Credit Suisse, this shows that the Noteholders cannot prove that Credit Suisse should have known of the fraud.

The court believes that a jury should decide whether to credit this interpretation of the evidence. At the sum *872 mary judgment stage, this interpretation is countered by evidence that not only did Credit Suisse know about the fraud, it also knew of National Century’s attempts to cover up the fraud and even aided National Century in the concealment. The Note-holders have submitted evidence that Credit Suisse, for example, knew the reserve accounts were low, knew National Century had “internally produced cash” to conceal the shortages, and extended loans to National Century to help it through its liquidity crunches.

Much of the rest of Credit Suisse’s Reply Statement amounts to Credit Suisse simply disagreeing about the facts. It argues that nothing improper was learned during its interactions with prospective investors and credit rating agencies, and it denies that GMAC told Credit Suisse of anything amiss at National Century. Credit Suisse claims that its extensions of credit to National Century were routine financial transactions and not efforts to help National Century conceal fraud. It further disputes whether certain pieces of evidence — despite all appearances — actually indicated the existence of reserve shortfalls or the misuse of funds. Ultimately, the court finds that the parties’ competing interpretations of the evidence is a matter for a jury to resolve.

b. Credit Suisse Was Deceived

Credit Suisse argues that National Century’s executives fooled it just like they deceived everyone else. In support of this position, Credit Suisse points to the testimony of three National Century employees with intimate familiarity of how the company perpetrated the fraud: Sherry Gibson, Vice President of Compliance; Jessica Bily, a funding and data analyst; and Jon Beacham, Director of Securitizations. 12 These individuals had particular involvement with National Century’s practices of entering false receivables data, generating false reports, and authorizing improper advances. See generally U.S. v. Poulsen, 568 F.Supp.2d 885, 894-99 (S.D.Ohio 2008). They testified that they did not tell anyone at Credit Suisse of National Century’s improprieties. See CS Ex. 114, Gibson Dep. at 213; CS Ex. 124, Bily Dep. at 80; CS Ex. 30, Beacham Dep. at 238-39.

This testimony does not entitle to Credit Suisse to summary judgment. Gibson, Bily, and Beacham could not claim to have possessed personal knowledge that Credit Suisse was completely unaware of National Century’s fraud. Rather, they testified that they personally did not tell Credit Suisse. The Noteholders have provided substantial evidence that Credit Suisse did know of various aspects of National Century’s fraud. Even if Credit Suisse lacked knowledge of the particular tasks that Gibson, Bily, and Beacham performed, a jury could still find that Credit Suisse had enough knowledge of National Century’s wrongdoing to satisfy the element of scienter. To look at it another way, Credit Suisse may not have known all of the intricacies of how National Century carried out its fraudulent operations (few had such knowledge), but substantial evidence exists to support a conclusion that Credit Suisse had sufficient knowledge to appreciate that its representations to investors were untrue.

c. Economic Irrationality and Motive

When National Century went bankrupt in November 2002, Credit Suisse lost about $130 million on its holdings of NPF VI and XII notes and another $127 million on its extension of credit through the short-term loan and VFN. See CS Ex. 135, Kleidon Report at Ex. 6A 13 ; CS Ex. 143; CS Ex. 340, Lengel Dep. at 48. *873 Credit Suisse argues that at several points in time from 1998 to early 2002, its investment in National Century stood at or below $100 million. See CS Ex. 135, Kleidon Report at Ex. 6A. According to Credit Suisse, no reasonable jury could find that Credit Suisse would have increased its exposure to National Century had it really known of the fraud.

There are two basic reasons why this irrationality argument fails to win the day on summary judgment. For one, Credit Suisse’s monetary loss is not conclusive of scienter — it is just one piece of evidence a factfinder may consider in weighing all of the evidence. See Earthboard Sports, 481 F.3d at 920 (that the defendant also fell victim to a fraudulent scheme “does not render him immune to liability”); Florida State Bd. of Admin. v. Green Tree Fin. Corp., 270 F.3d 645 , 662 (8th Cir.2001) (“The ultimate profitability of a course of conduct is not conclusive of intent. Just as we cannot countenance pleading fraud by hindsight, neither can we infer innocence by hindsight because the alleged misdeeds did not pay off.”). Parties to wrongdoing often continue in their conduct, believing they will not suffer the consequences of their actions. A jury should decide how to reconcile the evidence of Credit Suisse’s knowledge with the seeming irrationality of Credit Suisse’s monetary exposure to National Century.

Second, the Noteholders have submitted evidence that, if credited, would vitiate the irrationality theory on a factual level. The individuals who recommended and approved Credit Suisse’s investments in National Century were not the same individuals at Credit Suisse who knew, or should have known, of the fraud. It was the officers in Credit Suisse’s credit department or conduit group who recommended and approved Credit Suisse’s investments in National Century. See, e.g., Az. Ex. 61, Irwin Dep. at 38-39; Az. Ex. 110, Hunt Dep. at 13-14; Az. Ex. 112, Xanthos Dep. at 33; Az. Ex. 180, Giordano Dep. at 92-93; Az. Ex. 242; Az. Ex. 256, Monaco Dep. at 247-49; Az. Ex. 257. And it was individuals in the asset finance group — Clark, Donovan, and Fasanella — who the ' evidence points to as having knowledge of the fraud. The credit officers each testified that they were not told by the asset finance group about any aspects of National Century’s fraud. See, e.g., Az. Ex. 61, Irwin Dep. at 58-61; Az. Ex. 110, Hunt Dep. at 110-11; Az. Ex. 112, Xanthos Dep. at 73; Az. Ex. 180, Giordano Dep. at 108-10; Az. Ex. 256, Monaco Dep. at 266. 14

*874 Credit Suisse nonetheless contends that Clark, Donovan, and Fasanella had no motive to hide the fraud. While the lack of a motive is relevant, it is just one factor a jury may consider in examining all of the evidence. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 596 , 106 S.Ct. 1348 , 89 L.Ed.2d 538 (1986) (“Lack of motive bears on the range of permissible conclusions that might be drawn from ambiguous evidence....”). But Credit Suisse’s contention that it had no motive turns a blind eye to clear evidence of what Credit Suisse stood to gain by prolonging the fraud. First, after Credit Suisse made the $20 million credit extension to National Century in August 2000, National Century granted Credit Suisse the right to serve as the sole lead in placing additional note offerings until Credit Suisse received at least $15 million in upfront fees. See Az. Ex. 199. Second, Credit Suisse earned, or at least had the expectation of earning, substantial fees in connection with its short-term lending to National Century. See Az. Ex. 189 ($100,-000 fee for extending the payment date on the $20 million loan); Az. Ex. 146 at 2 (Fasanella stating his expectation that Credit Suisse would earn a fee of at least $1 million over and above the customary fee in relation to the $75 million loan); Az. Ex. 147 (invoice billing National Century $1 million in connection with the loan). Finally, Credit Suisse was able to reduce its exposure on NPF notes by over $100 million in the 10 week period before National Century collapsed. See Az. Ex. 11, Donovan Dep. at 603 (testifying that Credit Suisse sold $120 million in notes in that time frame); Az. Ex. 12, Richter Dep. at 314 (Credit Suisse employee testifying, “It’s a fact that we traded down from 247 to 130.5 [million dollars].”); Az. Ex. 132 at 2, 5 (chart of Credit Suisse’s trading in NPF securities); CS Ex. 143 (summary chart of month-end holdings) delete b/c NJ objects.

d. Neil McPherson Lacked Knowledge

Certain misrepresentations made to the Noteholders have been attributed to Credit Suisse’s Neil McPherson. McPherson made factually inaccurate statements to MetLife in a road show presentation and authored the March 2000 “Clean Bill of Health” report and the July 2002 “Fitch Downgrades NPF Healthcare Deals” report. See NJ Leivick Ex. 54; CS Exs. 255, 257. Credit Suisse argues that there is no evidence of McPherson having knowledge of the fraud and that it cannot be held liable for the statements of a speaker who lacked scienter.

The Noteholders respond to this argument with slightly different variations on the same theme: even if McPherson did not know of the falsity of his statements, it is enough that others at Credit Suisse did. MetLife and Lloyds rely on the collective knowledge doctrine, whereby to “carry their burden of showing that a corporate defendant acted with scienter, plaintiffs in securities fraud cases need not prove that any one individual employee of a corporate defendant also acted with scienter. Proof of a corporation’s collective knowledge and intent is sufficient.” In re WorldCom, Inc. Sec. Litig., 352 F.Supp.2d 472, 497 (S.D.N.Y.2005). The Arizona Noteholders rely on the tenet of agency law whereby a principal is liable for an agent’s innocently-made misrepresentation if the principal knows the falsity of the statement and believes that the agent will make the statement. See Restatement (Second) of Agency § 256 (1958).

Credit Suisse correctly notes that many courts have rejected the collective knowledge doctrine. See, e.g., Southland Sec. Corp. v. INSpire Ins. Solutions, Inc., 365 F.3d 353 , 366 (5th Cir.2004) (citing cases). Even putting that approach aside, the Noteholders have presented sufficient evidence that Fasanella not only saw *875 McPherson’s materials before they were presented but also had an opportunity to provide his input, and thus correct, the statements McPherson would make to investors. See NJ Leivick Ex. 51 (email to Fasanella of a draft of the road show presentation; Fasanella was told to “[f]eel free to send me any changes”); NJ Leivick Ex. 260, McPherson Dep. at 187-89 (testifying that he sent the “Clean Bill of Health” report to Fasanella for fact-checking). In light of the evidence, the court concludes that a jury could reasonably find that Credit Suisse acted with scienter as to McPherson’s innocently-made misrepresentations. Cf. In re Vivendi Universal, S.A. Sec. Litig., 765 F.Supp.2d 512, 544 (S.D.N.Y.2011) (holding that a corporation was not liable for an agent’s innocently-made representations where other agents who did have scienter did not review or endorse the misrepresentations).

e. No Government Charges Against Credit Suisse

Credit Suisse puts much importance on the fact that no criminal charges were brought against any Credit Suisse employees, nor did the SEC initiate legal action against Credit Suisse. Credit Suisse contends that the absence of government charges is “highly relevant” evidence to the scienter issue.

Credit Suisse has cited three cases but these lend no real support to its argument. The cases dealt with motions to dismiss and whether the complaints satisfied the heightened standard for pleading scienter in § 10(b) actions. In the first case, the Eighth Circuit found that “in the absence of particular facts giving rise to a strong inference of fraud,” the most plausible inference was that the defendants lacked scienter, especially when an SEC investigation had found no fraud. In re Ceridian Corp. Sec. Litig., 542 F.3d 240, 248-49 (8th Cir.2008). In the second case, the complaint again lacked particularized allegations of scienter, and the court observed in a footnote that it was “interesting” that the SEC did not include the defendants in its investigation of the larger fraud. Cordova v. Lehman Bros., Inc., 526 F.Supp.2d 1305, 1319 (S.D.Fla.2007). In the final case, the court rejected the plaintiffs contention that an SEC investigation supported a strong inference of scienter because the investigation did not result in any adverse findings. In re MoneyGram Int’l, Inc. Sec. Litig., 626 F.Supp.2d 947, 981 (D.Minn.2009).

Here the Noteholders’ § 10(b) and fraud claims have already survived Credit Suisse’s motion to dismiss, see In re Nat’l Century Fin. Enterprises, Inc., Inv. Litig., 541 F.Supp.2d 986 (S.D.Ohio 2007). And at the summary judgment stage the Note-holders have opposed the motion with clear and convincing evidence from which a jury could find that Credit Suisse acted with scienter. That Credit Suisse faced no criminal or SEC charges is merely one piece of evidence that a jury could potentially use in weighing all of the evidence.

f. Admissibility

Credit Suisse makes hearsay objections to a number of the Noteholders’ evidentiary materials. 15 They contend that these documents, or a deposition in one instance, consist of out-of-court statements introduced to prove that National Century was committing fraud. See Fed.R.Evid. 801. These statements were authored by various individuals or entities, including National Century’s Poulsen and Beacham, as well as Fitch, Hausser & Taylor, PhyAmerica, and the Shattan Group. These documents and deposition all indicate at least one problem area in National *876 Century’s operations, such as the purchase of ineligible receivables or the shortage of reserve funds.

Evidence is not hearsay when it is not offered to prove the truth of the matter asserted. See Anthony v. DeWitt, 295 F.3d 554, 563 (6th Cir.2002). “If the significance of an offered statement lies solely in the fact that it was made, no issue is raised as to the truth of anything asserted, and the statement is not hearsay.” Fed.R.Evid. 801, Advisory Committee Note to Subdivision (c), 1972 Proposed Rules. The court finds that the Noteholders have properly offered the evidence to show that Credit Suisse was aware that the statements were made, not for the truth of the matter asserted. “Statements to prove the listener’s knowledge are not hearsay.” U.S. v. Boyd, 640 F.3d 657, 664 (6th Cir.2011). If credited, the evidence establishes that Credit Suisse knew that the declarants claimed improprieties had taken place at National Century. A jury could conclude from this evidence — particularly when coupled with other evidence of Credit Suisse’s actual knowledge (to which Credit Suisse has not objected) — that Credit Suisse acted with reckless disregard for the truth by continuing to bring NPF notes to market without investigating whether there was any truth to the red flags brought to its attention. 16 See PR Diamonds, Inc. v. Chandler, 364 F.3d 671, 686 (6th Cir.2004) (“Specific factual allegations that a defendant ignored red flags, or warning signs that would have revealed the accounting errors prior to their inclu sion in public statements, may support a strong inference of scienter.”).

Credit Suisse argues that the court should be skeptical of the Noteholders’ use of such evidence and expresses concern that a jury could interpret the evidence as proving the improprieties did occur. The court finds that it should be left to the trial judge’s discretion to determine whether a limiting instruction would be appropriate. Moreover, there is ample other evidence at the Noteholders’ disposal to establish that National Century committed fraud. See Boyd, 640 F.3d at 664 (rejecting an argument that out-of-court statements about the occurrence of a crime should be excluded because .they contained “implicit factual assertions” and holding that the district court properly gave a limiting instruction and that other evidence was sufficient to establish the fact that the crime had occurred).

Accordingly, Credit Suisse’s motion to strike is denied as to Arizona Exhibits 42, 44, 74, 78, 101, 103, 125, 157, 204, 208, 209, 211, 229, and the corresponding exhibits submitted by Lloyds and MetLife.

C. Justifiable Reliance

To prevail on their § 10(b), fraud, and negligent misrepresentation claims, the Noteholders must prove that they relied on Credit Suisse’s representations in connection with their investment decisions and that their reliance was justifiable. Frank v. Dana Corp., 646 F.3d 954, 958 (6th Cir.2011); Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553 , 883 *877 N.Y.S.2d 147 , 910 N.E.2d 976, 979 (2009); MatlinPatterson ATA Holdings LLC v. Federal Express Corp,, 87 A.D.3d 836 , 929 N.Y.S.2d 571 , 575-76 (2011). Reliance “ensures that, for liability to arise, the ‘requisite causal connection between a defendant’s misrepresentation and a plaintiff’s injury’ exists as a predicate for liability.” Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, 552 U.S. 148, 159 , 128 S.Ct. 761 , 169 L.Ed.2d 627 (2008) (quoting Basic Inc. v. Levinson, 485 U.S. 224, 243 , 108 S.Ct. 978 , 99 L.Ed.2d 194 (1988)). “[R]eliance is tied to causation, leading to the inquiry whether respondents’ acts were immediate or remote to the injury.” Stoneridge, 552 U.S. at 160 , 128 S.Ct. 761 ; see also OSJ, Inc. v. Work, 273 A.D.2d 721 , 710 N.Y.S.2d 666, 668 (2000) (holding that reliance requires a “causal connection” between the misrepresentation and the injury).

1. Actual Reliance

a. The Dreyfus Plaintiffs

The Dreyfus plaintiffs purchased all of their notes in April and May of 2002 in the secondary market from Credit Suisse. See Az. Ex. 351. The notes were originally placed by PaineWebber in 1999. See CS Ex. 289. Dreyfus’s portfolio manager put a call out to several brokers, including one at Credit Suisse, that he needed bonds of a certain duration and yield. See Az. Ex. 250, Deonarain Dep. at 86. The Credit Suisse broker came back with at least a few suggestions, one of them being NPF XII 1999-1 notes. Id. at 87. The portfolio manager obtained the PPM originally distributed by PaineWebber, but he could not recall for sure if the Credit Suisse broker provided it to him. Id. at 96, 148-49 (testifying that he may have obtained the PPM from an independent source). The Credit Suisse broker gave a basic description of healthcare receivables over the telephone to the portfolio manager, but he made no specific representations other than that he had other clients who had purchased the notes. Id. at 88-91.

Credit Suisse argues that the Dreyfus plaintiffs cannot prove they relied on any statements made by Credit Suisse. According to the portfolio manager, the Credit Suisse broker did not make any representations about National Century or the NPF notes, nor did they review the PPM together. See Az. Ex. 350, Deonarain Dep. at 90, 149. The Dreyfus plaintiffs respond that the portfolio manager did receive Credit Suisse’s Clean Bill of Health report. Id. at 138-39, 161. Even so, the manager testified that what he relied on from the report was a diagram of the cash flow in healthcare asset-backed securities deals, and this diagram did not specifically relate to National Century. Id. at 98-100 (testifying that he reviewed the article to get a general understanding of healthcare receivables and that he did not recall relying on any National Century-specific statements); see also CS Ex. 255 at CSFB-2004-0062315.

Thus, Credit Suisse has established that the Dreyfus plaintiffs did not rely on any affirmative representations made by Credit Suisse. Plaintiffs nonetheless argue that the element of reliance need not be proved for a fraud claim based on omissions. They contend that Credit Suisse should have disclosed what it knew of the fraud to the portfolio manager. See Stutman v. Chemical Bank, 95 N.Y.2d 24 , 709 N.Y.S.2d 892 , 731 N.E.2d 608 , 613 n. 2 (2000) (noting that “proof of reliance is not required where a duty to disclose material information has been breached”).

A duty to disclose arises when “there is a fiduciary or confidential relationship, or one party’s superior knowledge of essential facts renders nondisclosure inherently unfair.” Barrett v. Freifeld, 77 A.D.3d 600 , 908 N.Y.S.2d *878 736, 737-38 (2010). In the case of superior knowledge, the essential fact must not be readily available to the plaintiff. P.T. Bank Central Asia v. ABN AMRO Bank N.V., 301 A.D.2d 373 , 754 N.Y.S.2d 245, 252 (2003); Swersky v. Dreyer & Traub, 219 A.D.2d 321 , 643 N.Y.S.2d 33, 37 (1996).

A jury could reasonably find that Credit Suisse had superior knowledge of the essential facts regarding National Century’s fraud and that those facts were not readily available to the Dreyfus plaintiffs. Indeed, there is no evidence of record to suggest that the Dreyfus plaintiffs could have readily ascertained the facts relating to the fraud. .See Swersky, 643 N.Y.S.2d at 37 (noting that a plaintiff can be charged with knowledge of facts he could have reasonably ascertained); Jana L. v. West 129th Street Realty Corp., 22 A.D.3d 274 , 802 N.Y.S.2d 132, 135 (2005) (holding that the plaintiff had a duty to “exercise ordinary intelligence”). Credit Suisse might argue that the individual broker who sold the notes lacked personal knowledge of the fraud. However, a jury could find that it was inherently unfair for Credit Suisse to be the selling notes at all, especially given the late stage at which the Dreyfus plaintiffs 'bought them. As discussed above regarding scienter, by April and May of 2002 Credit Suisse possessed sufficient information from which a jury could find that Credit Suisse knew or should have known of the fraud. If a jury so found, it could likewise also find that Credit Suisse should have not been in the business of selling NPF notes and that its sale to the Dreyfus plaintiffs, even if in the aftermarket, was inherently unfair.

b. Plaintiffs Who Had Purchased NPF Notes Before

Credit Suisse next argues that certain Arizona Noteholders could not have relied on Credit Suisse because of their previous knowledge of the note programs. The plaintiffs in question — Dexia, MONY, PIMCO, SanPaolo, and Wachovia — -purchased NPF notes from other sellers before buying notes from Credit Suisse. These plaintiffs had already acquired substantial familiarity with the note programs before turning to Credit Suisse to purchase additional notes. See, e.g., CS Ex. 13 (MONY research on the National Century). According to Credit Suisse, plaintiffs needed Credit Suisse only to complete the sales transactions, not to supply information.

This argument has -potential merit; however, each of the plaintiffs have produced evidence sufficient to withstand the motion for- summary judgment that they reviewed and relied upon offering materials given to them by Credit Suisse in connection with their note purchases from Credit Suisse. See, e.g., Az. Ex. 388, LeCoq Dep. at 185-86 (Dexia); Az. Ex. 401, Sidford Aff. at ¶¶ 6, 8, 9, 11 (MONY); Az. Ex. 320, Mather Aff. at ¶¶ 3, 5, 6 (PIMCO); Az. Ex. 386, DiMario Dep. at 150-51 (SanPaolo); Az. Ex. 410, Premo Dep. at 135, 177-78 (Wachovia). It is not the court’s role at the summary judgment stage to weigh the evidence or judge the credibility of witnesses. Schreiber v. Moe, 596 F.3d 323, 333 (6th Cir.2010).

c. Mix of Information Relied Upon

Not surprisingly, the Noteholders reviewed and relied on numerous sources of information in deciding whether to invest in National Century. The investments often were multi-million dollar purchases and made by experienced investment ad-visors. Credit Suisse argues that many Noteholders put great importance on the NPF notes’ AAA credit ratings and attractive credit spread. See, e.g., CS Reply Ex. 78, Katz Dep. at 212-13 (Highland). Credit Suisse contends that the Noteholders *879 cannot prove that their reliance, if any, on information derived from Credit Suisse was sufficient to establish the requisite causal connection.

As with the issue of scienter, the parties have submitted separate appendixes dedicated to the reliance issue. The court finds that there is a triable issue regarding whether the Noteholders actually relied on representations made to them by Credit Suisse. To prevail on their claims, the Noteholders need not show that they relied solely or exclusively on Credit Suisse’s representations. See In re Parmalat Sec. Litig., 477 F.Supp.2d 602 , 611 n. 62 (S.D.N.Y.2007). This is a point Credit Suisse concedes. The Noteholders’ reliance on Credit Suisse must be a substantial or contributing factor in their conduct, not the sole factor. See id.; Restatement (Second) of Torts § 546 (1977). Importantly, each of the Noteholders have submitted evidence that, within the mix of information available and relevant to them, they relied on Credit Suisse’s representations regarding credit enhancements, overcollateralization, and the level of reserve accounts. See, e.g., CS Reply Ex. 447 at LL_002133 and _002134 (Lloyds); Az. Ex. 303, Boothe Aff. at ¶ 3(ACM); Az. Ex. 329, Dieudonne Dep. at 169-70 (Ofivalmo); Az. Ex. 392, Kizner Dep. at 262 (Drake); Az. Ex. 393, Maceira Dep. at 59-61, 283-84 (III Finance). A jury could reasonably find from this evidence that the Noteholders actually relied on information they received from Credit Suisse and that this information was a substantial factor in their decisions to purchase the notes.

d. Admissibility

In its motion to strike, Credit Suisse argues that plaintiffs Ambac and PIMCO submitted sham affidavits in support of their attempts to show that they actually relied upon representations made by Credit Suisse. In their affidavits, plaintiffs stated that they received, reviewed, and relied upon the PPMs’ representations as to the amount of overcollateralization, maintenance of the reserve accounts, and the nature and performance of the healthcare receivables. See Az. Ex. 378, Aloe Aff. at ¶ 4 (Ambac); Az. Ex. 320, Mather Aff. at ¶¶ 3, 5, 6 (PIMCO). According to Credit Suisse, these statements contradict earlier deposition testimony.

A party “cannot create a disputed issue of material fact by filing an affidavit that contradicts the party’s earlier deposition testimony.” Aerel, S.R.L. v. PCC Airfoils, L.L.C., 448 F.3d 899, 906 (6th Cir.2006). But an affidavit submitted in opposition to a motion for summary judgment should be stricken only if it “directly contradicts” prior sworn testimony and no “persuasive justification” is provided for the contradiction. Id. at 908 . Thus, a district court should not strike an affidavit which “supplements] incomplete deposition testimony” or “fills a gap left open” by prior evidence Id. at 907 .

With respect to plaintiff Ambac, Nicholas Aloe stated in his affidavit that he reviewed the PPMs for all three of Ambac’s note purchases. See Az. Ex. 378, Aloe Aff. at ¶ 4. He testified in his deposition that he read the first PPM he received but not the rest because they were “a template deal.” Az. Ex. 377, Aloe Dep. at 71. While Credit Suisse is technically correct that Aloe’s affidavit contradicts his deposition testimony that he did not read the second and third PPMs, Aloe himself recognized the important point — the later PPMs were simply templates of the first. Credit Suisse has not made any showing why Aloe’s reliance on the misrepresentations in the first PPM cannot carry over to later purchases from Credit Suisse. See Restatement (Second) of Torts § 552(2)(b) (liability for misrepresentation may extend to loss suffered through reliance in the *880 intended transaction as well as in a “substantially similar transaction”).

Turning to PIMCO, Scott Mather stated in his affidavit that he relied on the PPMs before making purchases from Credit Suisse. 17 Credit Suisse argues that Mather testified in his deposition that he could not recall having “read” the PPMs. See Az. Ex. 321, Mather Dep. at 41. The court finds that the Mather affidavit and deposition are not in direct contradiction. Mather explained in his deposition that he did not read the PPMs like one would “read a novel,” but that he did review the PPMs for all pertinent information about a proposed investment. Id. at 41-42. Moreover, Mather’s contemporaneous handwritten notes on the trade tickets for each purchase from Credit Suisse show that he wrote down information — including the rate of overcollateralization and the required percentages for the reserve accounts — that he would have obtained from the PPMs. See Az. Ex. 320, Mather Aff., Exs., B & C. Mather’s affidavit thus should be viewed as supplementing the deposition testimony and other evidence, and a jury should ultimately decide whether Mather’s claim of reliance is credible.

Accordingly, Credit Suisse’s motion to strike is denied as to the Aloe and Mather affidavits.

2. Reasonableness of Reliance

In considering whether a party’s reliance is justifiable, a court may consider many factors, including:

(1) the sophistication of the parties; (2) the existence of long-standing business or personal relationships; (3) access to the relevant information; (4) the existence of a fiduciary relationship; (5) concealment of the fraud; (6) the opportunity to detect the fraud; (7) whether the plaintiff initiated the transaction or sought to expedite the transaction; and (8) the generality or specificity of the misrepresentations.

Earthboard Sports, 481 F.3d 901, 921 (6th Cir.2007). New York courts likewise consider the entire context of the transaction in determining whether reliance is justifiable. See, JP Morgan Chase Bank v. Winnick, 350 F.Supp.2d 393, 406 (S.D.N.Y. 2004).

All of the parties are sophisticated in securities transactions. Credit Suisse is a global financial services company, and the Noteholders routinely invest in asset-backed securities and include some of the largest institutional investors in the United States. Several of the Noteholders had well-established relationships with Credit Suisse. See, e.g., NJ Vespasiano Deck at ¶ 16 (Lloyds); NJ Tau Deck at ¶ 31 (Met-Life); CS Ex. 146, Alperin Dep. at 212 (PIMCO).

Though both sides to these transactions were highly sophisticated, the evidence demonstrates a wide disparity in knowledge. Credit Suisse worked extensively with National Century from late 1995 to 2002 on various types of transactions, including 16 NPF note issuances, the VFN, a proposed initial public offering, equity private placements, warehouse facilities, and other lending arrangements. See CS Ex. 10. By 2000 National Century selected Credit Suisse to serve as “sole lead-manage” for its NPF transactions. Az. Ex. 199. The record thoroughly establishes that Credit Suisse had access to a great deal of information not available outside investors. Much of Credit Suisse’s special access is exemplified by the evidence reviewed above in relation to scienter. To provide a few examples, Credit Suisse was a member of the “working *881 group” for the proposed IPO and in that capacity received a due diligence report and a draft Form S-l registration statement. See NJ Leivick Ex. 178 18 ; NJ Leivick Ex. 263, O’Connell Dep. at 395. In 2002, Credit Suisse was privy to exchanges between National Century and potential equity investors Goldman and CIVC Partners. See NJ Leivick Ex. 245, Sarkozy Dep. at 261-62. There is no evidence to suggest that the Noteholders had any such access or knowledge.

A jury could therefore reasonably determine that, while the Noteholders were sophisticated investors, a sufficient disparity in access and knowledge existed to make the Noteholders’ reliance on Credit Suisse justifiable. Moreover, Credit Suisse made specific representations about how the note programs were supposed to operate: criteria for what constituted an eligible receivable, restrictions on how reserve funds could be used, requirements for the percentage levels of reserve accounts, the rate of overcollateralization, the Servicer’s function, the bankruptcy-remote status of the note programs, and so on. A jury could find that the Noteholders were entitled to rely on such specific representations.

Credit Suisse offers numerous reasons why it believes that the Noteholders’ reliance was not justifiable. It argues that certain of the Noteholders used outdated PPMs and that reliance upon stale materials was unreasonable. It further argues that no reasonable institutional investor would invest millions of dollars based on informal telephone and email communications with Credit Suisse sales staff. Credit Suisse contends that some of the Noteholders should have conducted more analysis before making their purchases. For others who did conduct greater analysis, Credit Suisse argues that they should have relied on their own investigation and not any statements made by Credit Suisse.

None of Credit Suisse’s arguments win the day on summary judgment. Rather, they are considerations a jury should weigh when determining whether, based on all of the evidence, the Noteholders’ reliance was justifiable. Each consideration raised by Credit Suisse has a counter-point. Reliance upon a one-year old PPM was not necessarily unreasonable if nothing had materially changed in the operation of the note program and investors were told that the PPM’s description was still accurate. Reliance upon the sales staffs informal communications was not necessarily unreasonable if they made specific representations and confirmed the Noteholders’ understanding, based on the PPMs, of how the note programs worked. Investors did not necessarily act unreasonably by not conducting greater analysis if a reasonable investor would have been satisfied with the seeming thoroughness of the information provided to them by Credit Suisse. For Noteholders who dug deeper, there is no indication that a reasonable investigation would have actually discovered the fraud at National Century, particularly when the Noteholders have submitted evidence showing that Credit Suisse helped conceal it. See, e.g., Az. Ex. 188 (Credit Suisse’s extension of credit when it knew of reserve shortfalls); Az Exs. 44, 221 (Credit Suisse’s representations to Fitch that National Century had kept reserve levels in compliance with the Indentures).

Credit Suisse also contends that disclaimers in the PPMs and similar cautionary language in other written materials *882 warned investors that: (1) Credit Suisse did not conduct “any independent investigation” of the statements in the PPMs; (2) Credit Suisse made no “representations or warranties as to the accuracy or completeness of the information”; (3) prospective purchasers were to “rely on their own examination” of the issuer and note offering; (4) no person, apart from those “specifically designated,” was “authorized to give any information or to make any representations other than those contained in [the memoranda]”; and (5) financial information presented about the healthcare receivables was unaudited. CS Ex. 293 at CSFB-2004-0016436, -0016437, -0016442.

The court examined this argument before in denying Credit Suisse’s motion to dismiss. See In re Nat’l Century Fin. Enterprises, Inc., Inv. Litig., 541 F.Supp.2d 986, 1004-1005 (S.D.Ohio 2007) (holding that the existence of the disclaimers did not preclude the Noteholders from showing that they justifiably relied on misrepresentations in the PPMs). In that order, this court held that “general disclaimers of accuracy do not shield sellers who knowingly make false statements.” 541 F.Supp.2d at 1005 (citing cases). The court further explained that the PPMs told potential investors on the second page: “You should rely only on the information contained in this document or to which we have referred you.” See CS Ex. 293 at CSFB-2004-0016435. Further, the PPMs made clear that Credit Suisse was “specifically designated” to make representations about the notes. 541 F.Supp.2d at 1005 .

Credit Suisse has not offered any evidence to change the result on summary judgment. The Noteholders, on the other hand, have now produced evidence regarding the specific misrepresentations that Credit Suisse made. Importantly, the disclaimers were not tailored to address the substance of the specific misrepresentations that the Noteholders have shown Credit Suisse made. See In re Prudential Sec. Inc. Ltd. Partnerships Litig., 930 F.Supp. 68, 72 (S.D.N.Y.1996) (denying a motion for summary judgment in securities fraud case and holding that general disclaimers did not preclude reliance when they did not “precisely address the substance” of the specific misrepresentations relied upon). The court thus finds that a jury could determine that the Noteholders’ reliance upon the PPMs and other written materials was justifiable, even in light of the disclaimers. See Bass v. Janney Montgomery Scott, Inc., 210 F.3d 577, 590 (6th Cir.2000) (denying summary judgment in securities fraud ease and holding that “the question of whether [plaintiffs] reliance was reasonable is beyond doubt a question of fact for a jury to decide, and not a fit subject for judgment as a matter of law”).

3. Lloyds and the VFN

Lloyds asserts a § 10(b) claim as to the VFN. Credit Suisse argues that Lloyds did not actually rely on any representations made by Credit Suisse. In response, Lloyds has submitted evidence that Credit Suisse provided it with the term sheet in January 2001. See NJ Leivick Ex. 118. The term sheet contained specific misrepresentations about the NPF XII program, including that: NPF XII owned over $1.1 billion worth of receivables; the receivables were obtained in “true sale” transactions; the program had a credit enhancement of 20% of eligible receivables; the notes were ratably secured by receivables; reserve accounts would be maintained at specified levels; and NPF XII was a bankruptcy remote corporation. Id. at CSFB-EMAIL0257075 and -0257085. Lloyds has also submitted sufficient evidence that it relied upon those misrepresentations in deciding to participate in the VFN. See NJ Leivick Ex. 152, Vespasiano Dep. at 375-77.

*883 Credit Suisse contends that any reliance upon the term sheet was not reasonable because it, like the PPMs, contained cautionary language. The term sheet advised potential investors to make their own assessments and stated that Credit Suisse was not making a warranty of the accuracy of information contained therein. See NJ Leivick Ex. 118 at CSFB-EMAIL0257079. Credit Suisse further notes that the Participation Agreement to which the parties later entered into contained a clause stating that Lloyds would make its own appraisal of the transaction, “without reliance” upon Credit Suisse. CS Ex. 219 at § 12(a). However, as with the PPMs, the court finds that a jury could still find that reliance upon the specific representations in term sheet was justifiable. Furthermore, the Sixth Circuit has directly held that “[t]o erect a per se rule with respect to non-reliance clauses would undermine the essential point of undertaking a contextual analysis” of reliance in securities fraud cases. Earthboard Sports, 481 F.3d at 921 (rejecting on summary judgment the argument that a non-reliance clause is an absolute bar to reasonable reliance).

D. Loss Causation

Credit Suisse’s final argument concerning the § 10(b) and fraud claims is that the Noteholders have failed to demonstrate loss causation. The Noteholders must prove a causal connection between Credit Suisse’s misrepresentations and their losses. See Dura Pharm., Inc. v. Broudo, 544 U.S. 336, 342 , 125 S.Ct. 1627 , 161 L.Ed.2d 577 (2005); Helwig v. Vencor, Inc., 251 F.3d 540, 554 (6th Cir.2001) (en banc); Global Minerals and Metals Corp. v. Holme, 35 A.D.3d 93 , 824 N.Y.S.2d 210, 214 (2006). No one disputes that the Noteholders lost vast sums of money when National Century went bankrupt, but Credit Suisse says the blame for the Note-holders’ losses should be put on National Century’s principals, who authorized the improper advances.

Credit Suisse’s attempt to escape liability for fraud by blaming National Century’s principals is misdirected. The Noteholders’ theory of the case is that Credit Suisse misrepresented to investors the nature of the NPF note programs in order to make the notes appear to be a sound investment. The law of fraud by misrepresentation would be eviscerated if the deceiver could evade liability by simply ensuring that another party was committing the underlying bad acts.

“[A] misstatement or omission is the ‘proximate cause’ of an investment loss if the risk that caused the loss was within the zone of risk concealed by the misrepresentations and omissions alleged by a disappointed investor.” Lentell v. Merrill Lynch & Co., Inc., 396 F.3d 161, 173 (2d Cir.2005). “Thus to establish loss causation, ‘a plaintiff must allege ... that the subject of the fraudulent statement or omission was the cause of the actual loss suffered,’ ... i.e., that the misstatement or omission concealed something from the market that, when disclosed, negatively affected the value of the security. Otherwise, the loss in question was not foreseeable.” Id. (quoting Suez Equity Investors, L.P. v. Toronto-Dominion Bank, 250 F.3d 87, 95 (2d Cir.2001) (emphasis added in Lentell)).

The Noteholders have easily satisfied this standard at the summary judgment stage. The subjects of Credit Suisse’s misrepresentations and omissions were that: (1) program funds would be used to purchase eligible receivables; (2) reserve funds would be maintained at required levels and would be used only for limited purposes; (3) receivables would be acquired in “true sale” transactions; and (4) the rate of defaulted receivables would be carefully monitored and reported. These *884 four subjects correspond directly to how National Century’s principals misappropriated program funds by: (1) purchasing ineligible receivables; (2) raiding reserve accounts; (3) engaging in related-party transactions; and (4) manipulating data to avoid triggering an event of default.

E. Holder Claims

Certain Noteholders have also asserted what is known as a “holder” claim. These plaintiffs are: Lloyds, AmerUs, the Arizona Treasurer, Drake, Lincoln Capital, MONY, Ofivalmo, United of Omaha, Phoenix Life Insurance Company, and PIMCO. See NJ Opp’n Brief at 129; Az. Opp’n Brief at 124. They contend that Credit Suisse is not only liable for inducing them to purchase notes but also liable for inducing them to hold their notes at times when they could have sold them. Plaintiffs argue that Credit Suisse’s assurances in the July 2002 Market Tabs report following Fitch’s downgrade of NPF notes caused them to refrain from selling their notes. See CS Ex. 257; Az. Ex. 225 (Fitch downgrade). In response, Credit Suisse argues that a holder claim is not a viable theory of recovery and that plaintiffs have failed to submit factual proof of their theory.

As an initial matter, plaintiffs argue that the court should not consider Credit Suisse’s challenge to their holder claims because Credit Suisse did not specifically address the holder theory until its reply brief. The court, however, finds that Credit Suisse did move for summary judgment against plaintiffs’ fraud claims on the grounds of reliance and causation. See CS MSJ at 92, 111. As discussed below, holder claims are disfavored — particularly when these plaintiffs have brought well-supported fraud claims against Credit Suisse for inducing them to purchase — and none of the plaintiffs, save PIMCO, adduced evidence during discovery of a plan to sell notes. The court will therefore consider Credit Suisse’s challenge to the holder claims and the accompanying evidence submitted in the reply brief.

Though Credit Suisse argues that a holder claim is not a valid theory of recovery, New York is one jurisdiction where such a theory is viable. Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 446 F.Supp.2d 163, 204 (S.D.N.Y.2006) (“New York recognizes a claim of fraud where investors were induced to retain securities in reliance on a defendant’s misrepresentations.”). Even so, holder claims are generally disfavored and recognized only in limited circumstances. See In re WorldCom Sec. Litig., 336 F.Supp.2d 310, 318-21 (S.D.N.Y.2004) (explaining the policy reasons for why courts have severely limited or refused to recognize holder claims). “Because of the inherent difficulty of proving reliance and damages in such actions,” the holder must prove “specific reliance” upon a “direct communication” from the defendant. Id. at 319-21 (imposing these limitations as a protection against “vague” and “speculative” holder claims). A securities holder satisfies its burden by proving that it had a plan to sell the security but decided not to sell in reliance upon a misrepresentation directly communicated from the defendant. Id. at 321 (citing Gutman v. Howard Sav. Bank, 748 F.Supp. 254, 263 (D.N.J.1990) and Small v. Fritz Companies, Inc., 30 Cal.4th 167 , 132 Cal.Rptr.2d 490 , 65 P.3d 1255, 1265 (2003)). Further, the holder must show that the defendant acted with intent to induce him not to sell. See In re Enron Corp. Sec., Derivative & ERISA Litig., 761 F.Supp.2d 504, 538 (S.D.Tex.2011) (noting that a plaintiff must prove reliance on a “direct communication aimed to stop [the] sale”) (citing In re WorldCom Sec. Litig., 382 F.Supp.2d 549, 559 (S.D.N.Y.2005)).

Putting aside PIMCO for the moment, plaintiffs fail to meet their burden on summary judgment. The record is de *885 void of evidence that plaintiffs had a plan to sell their notes in the wake of Fitch’s downgrade. See WorldCom, 336 F.Supp.2d at 321 (noting that plaintiffs must demonstrate “a specific plan to sell their shares at a date certain”) (internal quotation marks omitted); Enron, 761 F.Supp.2d at 538 (noting that a holder must prove “an existing and definite plan to sell that would have occurred in the absence of the false communication”). None have testified of being inclined to sell, let alone specified when, at what price, and how many notes they would have sold. See WorldCom, 336 F.Supp.2d at 321 (citing Small, 132 Cal.Rptr.2d 490 , 65 P.3d at 1265 ). Though it is a fair inference from their testimony that many of the plaintiffs were “concerned” by the downgrade, see, e.g., Az. Ex. 392, Kizner Dep. at 271 (Drake), there is no evidence that these plaintiffs made plans to sell. See, e.g., Az. Ex. 354, Glomski Dep. at 307 (Lincoln Capital, “I don’t think that we were seriously considering selling the notes.”).

Further, plaintiffs have not established specific reliance on a direct communication intended to stop them from selling their notes. Plaintiffs argue that the Market Tabs report is what convinced them to hold their notes, but this report was published to the market in general. See, e.g., Az. Ex. 24, Bemis Dep. at 348 (AmerUs, testifying of having pulled the report from Credit Suisse’s website). The report cannot be characterized as a communication directed at plaintiffs and aimed to prevent them from selling notes.

Phoenix Life’s holder claim is not based on the Market Tabs report, but on PPMs and Sales Points it received and two conversations with Fasanella. Still, there is no evidence that the PPMs and Sales Points were supplied in an effort to stop Phoenix Life from selling notes. Indeed, by Phoenix Life’s own admission, it received the documents in connection with note purchases. See Az App’x at 44-46. Similarly, the first conversations with Fasanella took place in contemplation of a note purchase. See Az. Ex. 17, Rinaldi Dep. at 126-28 (testifying that he spoke to Fasanella well before Phoenix Life’s first note purchase and again in immediate connection with it). Turning to the second conversation, which concerned Fitch’s rating action in 2002, Phoenix Life offers no evidence that it relied on that conversation in deciding to hold its notes. See id. at 128-30.

PIMCO has a somewhat different story. It did have a plan to sell, a plan made by analyst Stefanie Evans in July 2002 and emailed to other PIMCO employees shortly after the Fitch downgrade. See CS Ex. 173 at PMCo 091282. She expressed “concern” over the downgrade, particularly of the report that the default rate in the receivables pool had increased; however, her concern was somewhat offset by her belief that Fitch had “recently changed their rating methodology” in the healthcare receivables field to make it more difficult to obtain the highest credit rating. Id. Evans recommended a two-part approach: first, selling “longer dated holdings, those maturing after [February 3, 2003]”; and second, holding those notes that were set to mature before February 3, 2003. Id. At the time of the recommendation, PIMCO held $92 million in longer-dated NPF XII notes and $292 million in NPF XII notes that were set to mature by February 3, 2003. Id. Portfolio manager Dan Ivascyn accepted this recommendation and solicited bids for the longer-dated notes. See id. at PMCo 091281-82; Az. Ex. 16, Ivascyn Dep. at 177. PIMCO sold $80 million of those notes to Credit Suisse, but sold no other notes. See Az. Ex. 16, Ivascyn Dep. at 176.

Despite having proof of a plan to sell, PIMCO’s holder claim still fails. With *886 respect to the $12 million of longer-dated notes that PIMCO planned to sell but did not, it held those notes because it was unable to get a bid for them and not because Credit Suisse convinced it to hold them. See id. at PMCo 091280; Az. Ex. 16, Ivascyn Dep. at 177. With respect to the $292 million of shorter-dated notes that Evans recommended be held, PIMCO has not established that it ever had a plan to sell those notes, let alone showed that Credit Suisse caused it to refrain from carrying out that plan. Indeed Evans testified that her recommendation to hold the notes was not based on any assurances from Credit Suisse. See CS Reply Ex. 43, Evans Dep. at 188.

PIMCO argues that Ivascyn spoke to Fasanella about the downgrade before he decided to accept Evans’s recommendation to hold. Even still, PIMCO has not established specific reliance on any statements by Fasanella. Ivascyn recalled that Fasanella was “very favorable” about the performance of the collateral and about the due diligence done on the NPF XII program, but he could not remember any “specific conversations” with Fasanella. Az. Ex. 16, Ivascyn Dep. at 168-69. Ivascyn stated that the decision to hold was based on PIMCO’s own analysis and that “the reason to hold was not based on the simple fact that [Credit Suisse] First Boston told us to hold them.” Id. at 170, 173.

Accordingly, Credit Suisse is entitled to summary judgment as to the holder claims asserted by Lloyds, AmerUs, the Arizona Treasurer, Drake, Lincoln Capital, MONY, Ofivalmo, United of Omaha, Phoenix Life, and PIMCO.

F. Special Relationship for Negligent Misrepresentation Claim

New York law requires a plaintiff asserting a claim for negligent misrepresentation to prove the existence of a “special relationship” that would support “imposing a duty on the defendant to impart correct information to the plaintiff.” MatlinPatterson, 929 N.Y.S.2d at 575. “To establish liability for negligent misrepresentation arising out of a commercial transaction, a party must demonstrate that the person making the misrepresentation possessed specialized or unique experience, or the persons involved are in a special relationship of confidence and trust such that reliance on the negligent misrepresentation is justified.” Salesian Soc’y, Inc. v. Nutmeg Partners Ltd., 271 A.D.2d 671 , 706 N.Y.S.2d 459, 461 (2000). This type of relationship requires more than commercial parties acting at arms’ length in business transactions. See Dobroshi v. Bank of Am., N.A., 65 A.D.3d 882 , 886 N.Y.S.2d 106, 109 (2009); H & R Project Assocs. v. City of Syracuse, 289 A.D.2d 967 , 737 N.Y.S.2d 712, 715 (2001).

Credit Suisse argues that a special relationship could not have existed here because the parties were sophisticated financial institutions dealing at arms-length. The court agrees and finds that as a matter of law the evidence does not support the conclusion that a special relationship of confidence and trust existed between Credit Suisse and any of the Noteholders. Credit Suisse did not act as a broker, advisor, or agent on behalf of any of the Noteholders, each of whom are institutional investors with considerable assets. In fact, the Noteholders either hired investment advisors or had their own professional asset managers to represent them in their dealings with Credit Suisse. The Noteholders have failed to cite any applicable authority where a court has found that a special relationship existed in a situation analogous to the circumstances here. 19 On the other hand, substantial *887 authority exists supporting a conclusion that a special relationship did not exist. See, e.g., Banque Arabe et Internationale D’Investissement v. Maryland Nat’l Bank, 57 F.3d 146, 158 (2d Cir.1995) (dismissing claim for negligent misrepresentation under New York law because “[i]n the case of arm’s length negotiations or transactions between sophisticated financial institutions, no extra-contractual duty of disclosure exists”); In re Enron Corp., 292 B.R. 752, 787-88 (Bankr.S.D.N.Y.2003) (no fiduciary relationship exists between sophisticated financial institutions dealing at arm’s length).

Accordingly, the motion for summary judgment is granted as to Noteholders’ claims for negligent misrepresentation.

G. Summary

The court therefore finds that, with limited exceptions, Credit Suisse’s motion for summary judgment is denied as it relates to the § 10(b) and fraud claims of Lloyds and MetLife and the fraud claims of the Arizona Noteholders. These limited exceptions are: Lloyds’s tort claims relating to the Participation Agreement (precluded by the existence of a contract); certain Arizona Noteholders’ fraud claims relating to road show presentations and joint meetings (no evidence of Credit Suisse having made a misrepresentation); and certain Noteholders’ holder claims (no evidence of a plan to sell or of specific reliance).

Credit Suisse’s motion for summary judgment is granted it relates to the Note-holders’ negligent misrepresentation claims.

VII. Blue Sky Law Claims

A. Primary Liability

Many of the Noteholders who purchased notes from Credit Suisse have claims remaining under the securities laws of various states: MetLife (New Jersey), AmerUS (Iowa), the Arizona State Treasurer (Arizona), the Board of Trustees of the State of Indiana Public Employees’ Retirement Fund (Indiana), GMO (Massachusetts), III Finance (Florida), Lincoln Capital (Illinois), Mellon Investor Services (New Jersey), the Metropolitan Government of Nashville and Davidson County (Tennessee), Phoenix Life Insurance (Connecticut), PIMCO (California), United of Omaha (Nebraska), and Wachovia (North Carolina). 20

1. Substantive Elements are Satisfied

The state blue sky laws at issue here generally prohibit the use of misrepresentations or material omissions in connection with the sale of securities. See, e.g., Ariz. Rev.Stat. Ann. § 44-1991(A); N.J. Stat. Ann. § 49:3-71 (a). Against these claims, Credit Suisse makes the same arguments that it made against the § 10(b) and fraud claims — that it made no material misrepresentations and did not act with scienter, and that the Noteholders cannot prove *888 justifiable reliance and loss causation. As discussed in Part VI, these arguments are not persuasive.

Moreover, certain blue sky laws do not require the plaintiff to prove scienter. They place the burden upon the defendant to establish lack of knowledge as an affirmative defense. See, e.g., Cal. Corp. Code § 25501 ; N.C. Gen.Stat. § 78A-56(a)(2). Credit Suisse has not satisfied this burden on summary judgment. Further, Credit Suisse concedes that several state laws do not require reliance (see Ariz.Rev.Stat. Ann. § 44-1991; Cal. Corp. Code § 25501 ; Conn. Gen.Stat. § 36b-29; Mass. Gen. Laws, ch. 110A, § 410; N.J. Stat. Ann. § 49:3-71 ), and most do not require loss causation (see Conn. Gen.Stat. § 36b—29; Fla. Stat. § 517.301 ; 815 Ill. Comp. Stat. § 5/12; Mass. Gen. Laws, ch. 110A, § 410; Neb.Rev.Stat. § 8-1102; N.J. Stat. Ann. § 49:3-71 ; N.C. Gen.Stat. § 78A-56; Tenn.Code Ann. § 48-2-121).

2. State of Domicile

Three of the Noteholders have asserted blue sky law claims under the law of the state in which they are domiciled, even though they made their purchases through an advisor located in another state. Plaintiff Mellon of New Jersey invested through Dreyfus in New York. Plaintiffs the Board of Trustees of the State of Indiana Public Employees’ Retirement Fund (the “Indiana Retirement Fund”) and the Metropolitan Government of Nashville and Davidson County (the “Nashville Government”) invested through Lincoln Capital in Illinois.

Credit Suisse argues that these plaintiffs’ domicile-based claims fail because the respective blue sky laws do not apply unless an offer or sale is made within the state. Plaintiffs respond that it is absurd and unfair that a defrauded buyer would not be able to invoke the blue sky law of its own state.

Credit Suisse has the better of this argument. The New Jersey, Indiana, and Tennessee statutes limit their scope to offers to sell and offers to buy that are made or accepted “in this state.” See N.J. Stat. Ann. § 49:3-51 ; Tenn.Code Ann. § 48-2-121(a); Pippenger v. McQuik’s Oilube, Inc., 854 F.Supp. 1411, 1426 (S.D.Ind.1994) (interpreting Ind.Code § -23-2-1-12 to apply to “the sale of securities in this state”). 21 It is undisputed that the transactions here took place between a seller in New York and buyers in Illinois and New York. Plaintiffs have submitted no evidence that they had any contact with Credit Suisse. See N.J. Stat. Ann. § 49:3-51 (c) (offers to sell are considered to be made in New Jersey if it is directed by the offeror to a buyer in New Jersey).

The evidence does not support plaintiffs’ argument that it is unfair they cannot assert claims under the blue sky laws of their states of domicile. They chose to have investment advisors act on their behalf, and plaintiffs’ own rendition of the facts demonstrates that Credit Suisse dealt only with Lincoln Capital and Dreyfus, not with the individual plaintiffs. See Az. App’x at 27-29. Moreover, in advancing their fraud claims against Credit Suisse in this litigation, plaintiffs have relied entirely on the actions of their investment advisors to support the elements of the claim. To show that Credit Suisse made a misrepresentation to them, plaintiffs point to the written materials that their advisors received in New York and Illinois and to the direct contacts their advisors in those states had with Credit *889 Suisse. Similarly, to satisfy the elements of materiality, justifiable reliance, and loss causation, plaintiffs point to the testimony of their advisors concerning their decision-making processes in New York and Illinois to buy the NPF notes. In other words, there is no evidence that anyone from Mellon, the Indiana Retirement Fund, or the Nashville Government had any contact with Credit Suisse or ever read the materials from Credit Suisse. The evidence thus demonstrates that the securities transactions between Credit Suisse and the investment advisors had no territorial nexus to New Jersey, Indiana, or Tennessee. See Bramblewood Investors, Ltd. v. C & G Assocs., 262 N.J.Super. 96, 619 A.2d 1332, 1336-37 (N.J.Super. Ct. Law Div.1992) (granting summary judgment against New Jersey investors’ claim under New Jersey blue sky law because the offer was made and accepted in North Carolina). This result is not unfair considering that plaintiffs made a deliberate choice to act through out-of-state advisors and considering that they have other available avenues for recovery. See 12 Joseph C. Long, Blue Sky Law § 4:2 (2011) (“[T]he drafters of the Uniform Act consciously rejected citizenship or residence within a particular state as the policy base for application of the Uniform Act.”).

Accordingly, Credit Suisse is entitled to summary judgment on the primary liability (as well as secondary liability) blue sky-law claims brought by Mellon under New Jersey law, the Indiana Retirement Fund under Indiana law, and Nashville Government under Tennessee blue sky law.

3. The Arizona State Treasurer

The Arizona State Treasurer has brought claims under Arizona blue sky law on behalf of 109 local governmental entities in Arizona. Credit Suisse, who sold the notes from New York, argues that these claims cannot be sustained because the statute does not apply unless the entire transaction took place “within” Arizona. The Treasurer responds that Credit Suisse’s argument is based on a misreading of the statute, which applies to “a transaction or transactions within or from this state involving an offer to sell or buy securities, or a sale or purchase of securities.” Ariz.Rev.Stat. Ann. § 44-1991(A) (emphasis added). The court agrees with the Treasurer’s position.

Credit Suisse is correct that the word “within” denotes “a transaction which occurs entirely inside the state.” Chrysler Capital Corp. v. Century Power Corp., 800 F.Supp. 1189, 1191 (S.D.N.Y. 1992) (interpreting the Arizona statute). However, the rest of the statute plainly applies to an offer to sell or buy or to a sale or purchase made “from” Arizona. Id. (“[T]he words ‘from this state’ must apply to transactions which do not occur entirely inside Arizona.”). As the Treasurer states, Credit Suisse is unable to cite to any authority holding that the statute does not apply to a transaction where the purchase was made from Arizona. And as the Treasurer further observes, the Arizona act “ ‘shall not be given a narrow or restricted interpretation or construction, but shall be liberally construed as a remedial measure in order not to defeat the purpose thereof.’ ” Siporin v. Carrington, 200 Ariz. 97 , 23 P.3d 92, 95 (Ariz.Ct.App.2001) (quoting 1951 Ariz. Sess. Laws ch. 18, § 20). The court’s interpretation of the Arizona act is in keeping with the well-accepted rule that the law of more than one state can apply to a securities transaction so long as each state has a territorial nexus to the transaction. See A.S. Goldmen & Co., Inc. v. New Jersey Bureau of Sec., 163 F.3d 780, 787 (3d Cir.1999) (“[W]hen an offer is made in one state and accepted in another, we now recognize that elements of the transaction have occurred in each state, and that both states have an *890 interest in regulating the terms and performance of the contract.”).

B. Secondary Liability

The blue sky laws at issue in this case extend liability to persons who participate in or aid the unlawful sale of securities. See Ariz.Rev.Stat. Ann. § 44-2003(A) (imposing liability on those who “made, participated in or induced the unlawful sale”); Cal. Corp. Code § 25504 (“materially aids”); Conn. Gen.Stat. § 36b-29(a)(2) (“materially assists”); Fla. Stat. § 517.211 (1) (“participated in or aided”); 815 Ill. Comp. Stat. § 5/13(A) (“participated in or aided in any way”); Iowa Code § 502.509 (7)(d) (“materially aids”); Mass. Gen. Laws, ch. 110A, § 410(b) (“materially aids”); Neb.Rev.Stat. § 8-1118(3) (“materially aids”); N.J. Stat. Ann. § 49:3-71 (d) (“materially aids”); N.C. GemStat. § 78A-56(c)(2) (“materially aids”).

In some cases, secondary liability is limited to a control person, broker-dealer, or agent who materially aids in the primary violation. See Cal. Corp. Code § 25504 ; 815 Ill. Comp. Stat. § 5/13(A); N.J. Stat. Ann. § 49:3-71 (d).

1. Definitional Objection

Credit Suisse contends that, as the seller of the notes, it cannot be secondarily liable under the blue sky statutes because it could not have both made the sales and aided the sales. To use Credit Suisse’s words, “secondary liability cannot exist by definition because it is impossible for Credit Suisse to aid itself.” CS MS J at 140.

On one level, this argument makes good sense — a person cannot simultaneously be the primary violator as well as a secondary actor in a particular transaction. But given the breadth of the blue sky laws, there is no reason why the Noteholders should be precluded from taking both types of claims to the jury and letting the jury decide which role, if either, the evidence proves- Credit Suisse played. Credit Suisse’s premise that only it could possibly be the primary violator is flawed. The blue sky laws are expansive enough to include NPF VI and NPF XII as primary violators. See, e.g., Ariz.Rev.Stat. Ann. § 44-1991(A)(1) (primary violator can be any person

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