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Smallen v. The Western Union Co.

United States District Court, D. Colorado

March 27, 2019

LAWRENCE HENRY SMALLEN AND LAURA ANNE SMALLEN REVOCABLE LIVING TRUST, individually and on behalf of all others similarly situated, and UA LOCAL 13 PENSION FUND, individually and on behalf of all others similarly situated, Plaintiffs,
v.
THE WESTERN UNION COMPANY, HIKMET ERSEK, SCOTT T. SCHEIRMAN, RAJESH K. AGRAWAL, and BARRY KOCH, Defendants.

          ORDER

          Kristen L. Mix, United States Magistrate Judge

         This matter is before the Court on the Motion to Dismiss the Consolidated Amended Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b) and the PSLRA [#53], [1] filed by Defendants Hikmet Ersek (“Ersek”), Scott T. Scheirman (“Scheirman”), Rajesh K. Agrawal (“Agrawal”), and The Western Union Company (“Western Union” or the “Company”), and on the Motion to Dismiss the Consolidated Amended Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b) and the PSLRA [#55], filed by Defendant Barry Koch (“Koch”). Plaintiffs filed a combined Response [#63] in opposition to the Motions [#53, #55], and Defendants filed separate Replies [#70, #71]. The Court has reviewed the briefs, the entire case file, and the applicable law, and is sufficiently advised in the premises. As explained in detail below, the Motions [#53, #55] are GRANTED.[2]

         I. Summary of the Case [3]

         Western Union is a “money transfer service” which “provides money movement and payment services worldwide.” Am. Compl. [#40] ¶ 33. During the alleged Class Period (from February 24, 2012, to May 2, 2017), Defendant Hikmet Ersek (“Ersek”) was the Chief Executive Officer (“CEO”) of the Company. Id. ¶¶ 1, 26. Defendant Scott T. Scheirman (“Scheirman”) was the Company's Chief Financial Officer (“CFO”) and an Executive Vice President from sometime prior to the Class Period until December 31, 2013, and a Senior Advisor until February 28, 2014. Id. ¶ 27. Defendant Rajesh K. Agrawal (“Agrawal”) was President of Western Union Business Solutions from sometime prior to the Class Period through December 2013, was Interim CFO from January 2014 to July 2014, and CFO from July 2014 to after the end of the Class Period. Id. ¶ 28. He also served as an Executive Vice President during the entire Class Period. Id. Defendant Barry Koch (“Koch”) was the Chief Compliance Officer from May 2013 until about November 2015. Id. ¶ 29.

         Plaintiffs are investors who acquired Western Union securities during the Class Period allegedly “at artificially inflated prices” during the Class Period and who were “damaged upon the revelation of the alleged corrective disclosures.” Id. ¶ 24. In short, Plaintiffs assert that, during the Class Period, Defendants deliberately misled investors regarding Western Union's regulatory compliance regarding anti-money laundering (“AML”) and anti-fraud practices. Id. ¶¶ 15-19.

         On January 19, 2017, Western Union “reached a settlement with several federal regulators [including the Federal Trade Commission (“FTC”)] in which it agreed to pay” $586 million. Id. ¶ 2. As part of this settlement, which covered a period from 2004 through December 2012, Western Union admitted to criminal violations including willfully failing to maintain an effective AML program and aiding and abetting wire fraud, [4] which resulted in a Deferred Prosecution Agreement (“DPA”) between Western Union and the Department of Justice (“DOJ”). Id. ¶¶ 130-31, 139. In part, Western Union admitted to failing “to implement proper controls and discipline agents.” Id. As stated by the DOJ, “[r]ather than ensuring their high volume agents were operating above-board, Western Union rewarded them without regard to the blatant lack of compliance and illegal practices taking place.” Id. As part of the settlement agreement, Western Union agreed to implement a number of compliance steps, including “ensuring that the Company a) conducts adequate due diligence on its agents; b) adequately monitors agent activity for anti-fraud and AML violations; c) takes prompt disciplinary action against agents that pose an unacceptable risk of money laundering and fraudulent practices; d) reports suspicious or illegal activity by its agents as required by the AML laws; and e) establishes executive review and bonus structures that account for compliance with U.S. law.” Id. ¶ 16.

         On January 31, 2017, Western Union also settled charges brought by the attorney generals of forty-nine states and the District of Columbia for an additional $5 million “to resolve their investigations into how fraudsters used Western Union's money transfer services to defraud customers.” Id. ¶ 526. Between January 18, 2017, and February 1, 2017, the price of Western Union stock shares declined by 10.57%. Id. ¶ 527.

         Plaintiffs state that as a result of Defendants' conduct, they “suffered damages in connection with their respective purchases, acquisitions and sales of the Company's securities during the Class Period, upon the disclosure that the Company had been disseminating misrepresented information concerning Western Union's compliance efforts to the investing public.” Id. ¶ 574. Plaintiffs therefore assert two claims: (1) violation of § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder against all Defendants (“Claim One”), and (2) violation of § 20(a) of the Securities Exchange Act against the four individual Defendants, i.e., Defendants Ersek, Scheirman, Agrawal, and Koch (“Claim Two”). Id. ¶¶ 564-580.

         II. Standard of Review

         A. Fed.R.Civ.P. 12(b)(6)

         The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test “the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994); Fed R. Civ. P. 12(b)(6) (stating that a complaint may be dismissed for “failure to state a claim upon which relief can be granted.”). To withstand a motion to dismiss pursuant to Rule 12(b)(6), “a complaint must contain enough allegations of fact ‘to state a claim to relief that is plausible on its face.'” Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Shero v. City of Grove, Okla., 510 F.3d 1196, 1200 (10th Cir. 2007) (“The complaint must plead sufficient facts, taken as true, to provide ‘plausible grounds' that discovery will reveal evidence to support the plaintiff's allegations.” (quoting Twombly, 550 U.S. at 570)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual enhancement.” Id. (internal quotation marks omitted). “The court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties might present at trial, but to assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999) (citation omitted).

         B. Private Securities Litigation Reform Act of 1995 (“PSLRA”)

         Because the PSLRA governs this case, the Court notes and applies guidance from the Tenth Circuit Court of Appeals regarding interpretation of the Act's “stringent” pleading requirements. Pirraglia v. Novell, Inc., 339 F.3d 1182, 1186 (10th Cir. 2003).

         Under the PSLRA, “Section 10(b) and Rule 10b-5 create an implied private cause of action arising from fraud in the purchase or sale of securities.” Hampton v. root9B Techs., Inc., 897 F.3d 1291, 1298 (10th Cir. 2018). Section 10(b) makes it unlawful for any person 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 as necessary or appropriate in the public interest or for the protection of investors.” 15 U.S.C. § 78j(b). Rule 10b-5 prohibits “any untrue statement of a material fact or [omission of] a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading[, ] . . . in connection with the purchase or sale of any security.” 17 C.F.R. § 240.10b-5.

         To state a claim under § 10(b) and Rule 10b-5, a plaintiff must plausibly allege that “a defendant made statements that (1) contained false or misleading statements of material fact, (2) related to the purchase or sale of a security, (3) were made with intent to defraud investors or conscious disregard of a risk that shareholders would be misled (scienter), (4) led to reliance by the plaintiff, and (5) caused the plaintiff's loss (loss causation).” Nakkhumpun v. Taylor, 782 F.3d 1142, 1146-47 (10th Cir. 2015).

         The PSLRA, 15 U.S.C. § 78u-4(b), “adjusts the general pleading standard applicable under Federal Rule of Civil Procedure 12(b)(6), which requires a plaintiff to plead sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Hampton, 897 F.3d at 1298 (internal quotation marks omitted). “Specifically, under the PSLRA, a plaintiff must meet a heightened pleading standard with regards to the first and third elements of a securities-fraud claim: that is, respectively, as to whether the statements at issue were false or misleading, and whether the defendant acted with the requisite scienter.” Id.

Under the Reform Act, a private complaint that alleges a violation of section 10(b) of the 1934 Act and Rule 10b-5 thereunder must first “specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading, and, if an allegation regarding the statement or omission is made on information and belief, . . . [must] state with particularity all facts on which that belief is formed.” 15 U.S.C. § 78u-4(b)(1).

Pirraglia, 339 F.3d at 1186 (citation omitted). “To satisfy this statutory burden, a plaintiff must explain why the statement was misleading, and allege with particularity his basis for believing that the statement was false.” Hampton, 897 F.3d at 1298 (internal quotation marks omitted).

Second, in order to show that the defendant acted with the requisite state of mind for securities fraud cases, i.e., scienter, the complaint must also, “with respect to each act or omission alleged to violate the [the 1934 Act], state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.” § 78u-4(b)(2).

Pirraglia, 339 F.3d at 1186 (citation omitted).

         When a complaint refers to an investigation of counsel as the basis for a plaintiff's allegations, as is the case here, see Am. Compl. [#40] at 5, the Court “treats [the allegations of the complaint] as having been made on information and belief.” Adams v. Kinder-Morgan, Inc., 340 F.3d 1083, 1098 (10th Cir. 2003). As indicated above, Plaintiffs must “state with particularity all facts upon which their belief is formed.” Id. (citation omitted). The Tenth Circuit has interpreted the statutory language about stating “all” facts to mean that Plaintiffs must plead sufficient facts “to determine whether, taken as a whole, they support a reasonable belief that the defendant's statements . . . were false or misleading.” Id. at 1099.

In deciding whether the factual allegations support a reasonable belief that fraud occurred, courts should evaluate the facts alleged as a whole, evaluating the level of detail, number, and coherence and plausibility of the allegations; whether the allegations are specific enough to be verified or refuted by a defendant without requiring the complaint to disclose how the plaintiff learned of such facts or experts to prove such facts at trial; whether the sources of the facts are disclosed and the reliability of those sources; and any other factors that might affect how strongly the facts alleged support a reasonable belief that the defendant's statements were false or misleading. To meet the standard, plaintiffs are not required to disclose the documentary or personal sources from which they learned the facts alleged in an information and belief complaint.

Id. at 1102-03.

         “There is a meaningful distinction between statements of opinion and statements of fact; the former require a plaintiff to meet a higher pleading standard.” Hampton, 897 F.3d at 1299. “Pure statements of opinion and statements of optimism that are not capable of objective verification are not material misstatements unless they inaccurately represent the speakers' beliefs concerning then-present factual conditions. Id. (internal citations, brackets, and quotations marks omitted). “Statements of opinion or belief must rest on a factual basis that justifies them as accurate, the absence of which renders them misleading.” Id. (internal brackets and quotation marks omitted).

         In Pirraglia v. Novell, Inc., the court first analyzed the complaint's alleged false statements “to determine whether plaintiffs specifi[ed] each statement alleged to have been misleading, the reason or reasons why the statement [was] misleading, and, if an allegation regarding the statement or omission [was] made on information and belief, . . . [whether the complaint] state[d] with particularity all facts on which that belief [was] formed.” Id. at 1189 (internal quotations omitted). Second, the court “proceed[ed] to examine whether plaintiffs met the scienter requirement, ” but only as to those statements which the court found met the above particularity requirements. Id. at 1190-91.

         Regardless of the order in which the Court addresses the PSLRA's pleading requirements, the Court must decline a defendant's invitation to conclude that facts alleged by the plaintiffs are simply false, regardless of whether the plaintiffs' claims “seem farfetched.” Pirraglia, 339 F.3d at 1193-94. Moreover, the Court must accept the truth of the confidential witnesses' accounts as pled in the Amended Complaint [#40] and decline to assess those witnesses' credibility. Anderson v. Spirit Aerosystems Holdings, Inc., 827 F.3d 1229, 1239 (10th Cir. 2016) (citing Tellabs Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)).

         III. Analysis

         In the interest of efficiency, the Court addresses the allegations asserted against Defendants Ersek, Scheirman, Agrawal, and Western Union collectively but separately from those asserted against Defendant Koch, who filed his Motion to Dismiss [#55] separately from the other Defendants. However, as instructed by Tenth Circuit precedent, the Court has reviewed all of the allegations of the Amended Complaint [#40] and has assessed it holistically. See Hampton, 897 F.3d at 1298. The Court has examined the allegations of the lengthy Amended Complaint [#40] in their entirety, [5] and is not required to make explicit findings of fact and conclusions of law on a Rule 12(b)(6) ruling. Adams, 340 F.3d at 1093.

         A. Claim One: Defendant Koch

         Defendant Koch was Western Union's Chief Compliance Officer from May 2013 until about November 2015. Am. Compl. [#40] ¶ 29. He reported to the Compliance Committee of the Board of Directors (the “Board”) after its creation in July 2013. Id. Plaintiffs note specifically that he attended the Compliance Committee meetings held on July 17, 2013 and September 9, 2013, and the full Board meeting held on October 11, 2013. Id. ¶ 92.

         At the July 17, 2013 Compliance Committee meeting also attended by Defendant Ersek, Defendant Koch “described a draft risk assessment that would be the ‘foundation' for the risk-based AML compliance program of Western Union's core consumer-to-consumer money transfer business.” Id. ¶ 240. At the September 9, 2013 Compliance Committee meeting attended by Defendants Ersek and Koch, “it was announced that on July 31, 2013, management first submitted a written action plan to the Monitor for his consideration, providing an agreed-to methodology for measuring and ensuring compliance with the Monitor's recommendations.”[6] Id. ¶ 242.

         At the October 11, 2013 Board meeting attended by Defendants Ersek, Scheirman, and “likely” Agrawal, Defendant Koch “explained in a memorandum to the Board (using language that was also included in the risk assessment itself) that an ‘AML Risk Assessment is the foundational document upon which [a financial institution's] risk-based AML Compliance program is based. . . . Development and issuance of an AML Risk Assessment is also a regulatory expectation, evidenced in bank and [Money Services Businesses] examination manuals, and is implicitly required by the AML ‘program requirement' of [the Bank Secrecy Act].'” Id. ¶ 243. According to his meeting memorandum, “the ‘[i]nherent' ‘[g]eographic' risk for Western Union's consumer-to-consumer and business segments was ‘Very High.'” Id.

         On November 6, 2013, Western Union issued “a press release announcing that it would be joining the Blue Campaign, an anti-human trafficking initiative spearheaded by the U.S. Department of Homeland Security.” Id. ¶ 405. Defendant Koch stated in the press release that “[e]nding human trafficking is possible only if everyone steps in and plays a role. We are committed to using the trust, reach and power of our brand along with our Agent network to engage the public and arm them with awareness and the resources to spot the signs and report suspect activity.” Id. At this time, Western Union was responding to two investigations-one aimed directly at Western Union- by the Department of Justice into “China Corridor agents” who facilitated the laundering of hundreds of millions of dollars used for human trafficking. Id. ¶¶ 131, 184, 251, 264-65. Plaintiffs argue: “Touting the Company's commitment to combating human trafficking and its agents' role in those efforts while failing to disclose the Company's failings with respect to those exact topics was therefore false and misleading.” Response [#63] at 54. They further argue: “Even though Western Union[ ] only admitted to willful compliance failures as to the China Corridor Agents through 2012, it was still misleading for Koch to fail to disclose those very recent violations that subjected the Company to the substantial risk of an unprecedented forfeiture for a money services business.” Id.

         During his two and a half years as Chief Compliance Officer, Defendant Koch “regularly spoke at publicly advertised industry conferences, representing Western Union, where he portrayed Western Union as an industry leader in compliance by discussing best practices for compliance programs and combating human trafficking.” Am. Compl. [#40] ¶ 247. On February 17, 2014, he “presented on best practices for detecting human trafficking at a conference hosted by the Council of Europe and Organization for Security and Cooperation in Europe.” Id. On April 24, 2014, he “was one of three panelists on a publicly advertised webcast hosted by a law firm that addressed ‘[b]est practices for structuring and implementing compliance programs to identify and mitigate multiple financial crimes risk.'” Id. On October 23, 2014, he presented at the 8th Annual European AML Financial Crime Conference. Id. Defendant Koch left Western Union's employment no later than November 2015. Id. ¶ 247.

         The first required element of a claim under Rule 10b-5 is that the defendant must have made an untrue or misleading statement of material fact, or failed to state a material fact necessary to make statements not misleading. Grossman, 120 F.3d at 1118. Plaintiffs direct the Court's attention to three asserted false or misleading statements made by Defendant Koch. Response [#63] at 53-54.

         First, in connection with Western Union's 8th Annual AML, Anti-Fraud and Compliance Conference in September 2013, Defendant Koch stated: “Together with governments, regulators, law enforcement authorities and financial service companies, we're fully engaged in the fight against money laundering and fraud.” Id. at 54 (citing Am. Compl. [#40] ¶ 395). Plaintiffs argue that this statement “was misleading absent disclosure of the fact that government investigations that were pending at the time posed the high risk of substantial liability for Western Union's compliance failures.” Response [#63] at 54 (citing Am. Compl. [#40] ¶¶ 265, 268).

         Second, as discussed above, in a November 6, 2013 press release concerning Western Union's efforts to combat human trafficking, Defendant Koch stated: “Ending human trafficking is possible only if everyone steps in and plays a role. We are committed to using the trust, reach and power of our brand along with our Agent network to engage the public and arm them with awareness and the resources to spot the signs and report suspect activity.” Response [#63] at 53 (citing Am Compl. [#40] ¶ 405). Plaintiffs argue that “[t]outing the Company's commitment to combating human trafficking and its agents' role in those efforts while failing to disclose the Company's failings with respect to those exact topics was therefore false and misleading.” Response [#63] at 54 (citing Am Compl. [#40] ¶¶ 110-13, 131, 183-99, 251, 264-65).

         Third, in connection with Western Union's 2014 Annual Anti-Money Laundering, Anti-Fraud and Compliance Conference, Defendant Koch stated: “Western Union is committed to helping protect its customers against fraud and other financial crimes. It's the right thing to do for our customers and for our business.” Response [#63] at 54 (citing Am. Compl. [#40] ¶ 436). Plaintiffs argue this statement was false and misleading in light of “Defendants' other statements touting the Company's compliance practices and its reasons for its compliance expenditures while failing to disclose current and past compliance failures or the true reason for its increased compliance costs.” Response [#63] at 54.

         Defendant Koch argues that these statements were mere puffery. Motion [#56] at 7-8, 11-12, 13; Reply [#71] at 13-15. In another securities-fraud case, Grossman v. Novell, Inc., the allegedly “false and misleading” statements concerned the defendant's potential market-share gain, “compelling” opportunities, “smooth” mergers, and “accelerating” product development. 120 F.3d at 1116-17. The Tenth Circuit Court of Appeals held that such “vague statements of corporate optimism” were “not actionable because reasonable investors do not rely on them in making investment decisions.” Id. at 1119. “Statements classified as ‘corporate optimism' or ‘mere puffing' are typically forward-looking statements, or are generalized statements of optimism that are not capable of objective verification.” Id. The sum of Plaintiffs' argument regarding whether Defendant Koch's statements are puffery is a footnote summarily denying that they are and referring the Court to a multi-page discussion of puffery offered in connection with the other Defendants' statements. Response [#63] at 55 n.24 (citing Response [#63] at 43-47).

         The Court finds that the three statements attributed to Defendant Koch are nothing more than mere puffery consisting of vague corporate optimism. The first statement (“Together with governments, regulators, law enforcement authorities and financial service companies, we're fully engaged in the fight against money laundering and fraud.”) is similar to a statement analyzed in another securities case, In re Sturm, Ruger & Co., Inc. v. Securities Litigation, No. 3:09-cv-1293 (CFD), 2011 WL 494753, at *5 (D. Conn. Feb. 7, 2011). There, the court found that the statement, “Employees are fully engaged, and we see nothing but opportunities ahead of us, ” was an expression of puffery and corporate optimism not giving rise to a securities violation. 2011 WL 494753, at *5. Here, the Court finds that the assertion that Western Union was “fully engaged in the fight” constitutes similarly inactionable puffery.

         Defendant Koch's second statement (“Ending human trafficking is possible only if everyone steps in and plays a role. We are committed to using the trust, reach and power of our brand along with our Agent network to engage the public and arm them with awareness and the resources to spot the signs and report suspect activity.”) and third statement (“Western Union is committed to helping protect its customers against fraud and other financial crimes. It's the right thing to do for our customers and for our business.”) constitute similarly inactionable statements of puffery. Other courts have found that general language regarding a company's commitment to risk management is inactionable. For example, in In re Vale S.A. Securities Litigation, No. 1:15-cv-9539-GHW, 2017 WL 1102666, at *24 (S.D.N.Y. Mar. 23, 2017), the court held that the company's claim to be “committed to achieving the highest possible health and safety standards” was a “general, airy statement of commitment routinely found to constitute non-actionable puffery.” In Matana v. Merkin, 989 F.Supp.2d 313, 327 (S.D.N.Y. 2013), the court held that a statement that the company “remain[ed] focused on preserving principal and committed to managing risk” was “not actionable in fraud” because the statement was puffery. In Woodard v. Raymond James Financial, Inc., 732 F.Supp.2d 425, 434-35 (S.D.N.Y. 2010), the court held that “Raymond James' leadership believes that the managed growth strategy, commitment to risk management and conservative lending practices . . . will continue to serve the company well in the coming year” was puffery consisting of “nothing more than a general platitude that accompanies nearly every press release or public statement issued by a financial institution.”

         Thus, because the statements made by Defendant Koch and argued by Plaintiffs to be false and misleading are actually nonactionable puffery, the Court finds that Plaintiffs fail to sufficiently allege facts regarding the first required element of a claim under Section 10b and Rule 10b-5, i.e., that Defendant Koch made an untrue or misleading statement of material fact, or failed to state a material fact necessary to make statements not misleading. See Grossman, 120 F.3d at 1118. Accordingly, Claim One against Defendant Koch is dismissed.

         B. Claim One: Defendants Ersek, Scheirman, Agrawal, and Western Union [7]

         1. Purported False or Misleading Statements

         With respect to Defendants Ersek, Scheirman, Agrawal, and Western Union, Plaintiffs direct the Court's attention to the following purportedly fraudulent misrepresentations/omissions, which they divide into four categories: (1) statements describing ongoing government investigations; (2) statements explaining increased compliance expenditures; (3) statements regarding legal compliance; and (4) statements touting compliance practices. Response [#63] at 36-53. In this section, the Court addresses the first three categories, reserving discussion of the fourth category for the scienter analysis below.

         a. Government Investigations

         Plaintiffs argue that Defendants made untrue or misleading statements of material fact, or failed to state material facts necessary to make statements not misleading, regarding ongoing government investigations, including the investigations brought by four separate U.S. Attorney offices, the FTC, and state attorneys general. Response [#63] at 47-51.

         i. Filings with the Securities Exchange Commission (“SEC”)

         In support of this category of purportedly false/misleading statements regarding government investigations, Plaintiffs cite to the following allegations. Id.

1. “On February 24, 2012, Western Union filed an annual report on Form 10-K with the SEC, signed by Defendants Ersek and Scheirman, announcing the Company's financial and operating results for the quarter and fiscal year ended December 31, 2011 (the “201110-K”).” Am. Compl. [#40] ¶ 304. “The 201110-K . . . discussed ongoing governmental investigations, consent agreements, and enforcement actions by regulators, but claimed that these investigations were too preliminary for the Company to be able to predict their outcomes.” Id. ¶ 308.
2. In March 2012, the Eastern District of Pennsylvania (“EDPA”) served Western Union “with a federal grand jury [subpoena] seeking documents relating to Hong Fai . . . .”[8] Id. ¶ 264. “As the Class Period progressed, the Company received additional subpoenas from EDPA and the government interviewed several current Western Union employees as part of this investigation.” Id.
3. On March 20, 2012, the Central District of California (“CDCA”) “served the Company with a federal grand jury subpoena seeking documents relating to” U.S. Shen Zhou International Company (“Shen Zhou”).[9] Id. ¶ 265. “When CDCA served the Company with this subpoena, it informed Western Union that the Company itself was ‘a target of an ongoing investigation into structuring and money laundering.'” Id.
4. “On May 1, 2012, the Company filed its quarterly Form 10-Q with the SEC, signed by Defendants Ersek and Scheirman, announcing the Company's financial and operating results for the first quarter of 2012, which ended on March 31, 2012 (the “Q1 2012 10-Q”).” Id. ¶ 316. “The Company . . . described in its Q1 2012 10-Q several ongoing government investigations and claimed that all of these investigations were too preliminary for the Company to be able to predict their outcomes.” Id. ¶ 318.
5. “[A]t the May 9, 2012 Investor Day conference, Mike Salop, Western Union's Senior Vice President of Investor Relations, specifically addressed DOJ's investigation into Shen Zhou-the agent in California that was arrested and late[r] pled guilty to structuring transactions-that the Company had announced in its 10-Q for the first quarter of 2012 and that Western Union was a target of. He represented that ‘[w]e believe the company has robust compliance and anti-money laundering policies and processes in place, and we look forward to demonstrating that fact to the U.S. Attorney's office in Los Angeles.' Salop went on to state that ‘[w]e are not aware of any evidence that suggests that the company or any of its employees knowingly engaged in any conduct with this former agent that would constitute a violation of the law.'” Id. ¶ 326. “He explained: ‘We have been cooperating with the government in connection with this particular case for almost two years and assisted the government prior to the time the former agent was arrested, just as we cooperate on a daily basis with law enforcement departments throughout the U.S.'” Id. ¶ 250.
6. “On August 2, 2012, the Company filed its quarterly Form 10-Q with the SEC, signed by Defendants Ersek and Scheirman, announcing the Company's financial and operating results for the second quarter of 2012, which ended on June 30, 2012 (the “Q2 2012 10-Q”).” Id. ¶ 341. “The Company . . . described in its Q2 2012 10-Q several ongoing government investigations and claimed that all of these investigations were too preliminary for the Company to be able to predict their outcomes.” Id. ¶ 344.
7. Filed February 22, 2013, the 2012 10-K signed by Defendants Ersek and Scheirman essentially repeated the information in the 201110-K in that it “discussed ongoing governmental investigations, consent agreements, and enforcement actions by regulators, but claimed that these investigations were too preliminary for the Company to be able to predict their outcomes.” Id. ¶¶ 365, 368.
8. “On April 30, 2013, the Company held a conference call in connection with the release of its earnings for the first quarter of 2013. During this call, an analyst noted the fact that Ersek had mentioned a few times earlier in the call at a general level new compliance and regulatory actions in addition to the Southwest Border Agreement that the Company had not disclosed previously and asked for more information about these activities. Ersek responded by explaining: ‘It is no secret that the financial service[s] overall get more regulated and within that also we want to be best-in-class. We create this culture of compliance within our company. And we - so that's the environment we are in currently and we see that as a long-term competitive advantage.' Then, at Ersek's request, Scheirman followed-up by elaborating as follows: ‘[A]s Hikmet said that we are committed to a strong culture of compliance and invest in compliance programs. And let me give you a flavor of maybe some things that have been ongoing not only in the first quarter, but prior quarters, too. We're doing things to really protect the customer and protect the business. They might be things such as real-time risk assessment when the transaction happens at the point-of-sale, verification programs related to high principal transactions where we - whereby we call back the sender and make sure the transaction is appropriate. But, as Hikmet mentioned, we believe this will be a long-term competitive advantage for us. Near term, there are some headwinds but it's the right investment to make in the business. We believe it'll be a competitive advantage and we continue to work towards that. . . . But we will continue to comply with the letter and the spirit of the law and really see that as a competitive advantage long term.' (Emphasis added). Ersek then explained that the Company was working to adapt to the U.S. and global trend of increasing regulations. Scheirman added that the Company's efforts often went above and beyond its technical legal requirements. He represented that ‘everything isn't necessar[ily] black-and-white and a rule, but we work with regulators in countries around the world to try to do the right thing for our business and for our customers.' (Emphasis added).” Id. ¶ 374. “Later during this April 30, 2013 conference call, Defendant Scheirman explained that ‘our goal is to comply with the letter and the spirit of the law, have best-in-class compliance programs, and really protect our customers and protect our businesses.' Defendant Ersek added, ‘I think the general financial service industry is getting more regulated and we are very focused on that. I think we have a great compliance team in place and they are working hard. Generally, I see also being a market leader here as a competitive advantage.'” Id. ¶ 375.
9. “Specifically addressing the regulatory environment, Scheirman stated at [a] June 13, 2013 William Blair conference that ‘the regulators start with the market leaders and we're clearly a market leader. And, again, we're going to partner with them because we share the same goals of protecting our customers, protecting our business systems and so forth.'” Id. ¶ 386.
10. On November 25, 2013, the Middle District of Pennsylvania (“MDPA”) “served the Company with a grand jury subpoena seeking documents relating to complaints made to the Company by consumers anywhere in the world relating to fraud-induced money transfers since January 1, 2008.” Id. ¶ 268. “When MDPA served the Company with this subpoena, it informed Western Union that the Company itself was the subject of this investigation.” Id.
11. Filed February 24, 2014, the 2013 10-K signed by Defendants Ersek and Agrawal essentially repeated the information in the 2011 and 2012 10-Ks in that it “discussed ongoing governmental investigations, consent agreements, and enforcement actions by regulators, but claimed that these investigations were too preliminary for the Company to be able to predict their outcomes.” Id. ¶¶ 410, 413.
12. Filed July 31, 2014, the Q2 2014 10-Q signed by Defendants Ersek and Agrawal disclosed that the government had notified Western Union that it was a “target” of an investigation by the Southern District of Florida (“SDFL”). Id. ¶¶ 275, 428, 430.
13. Filed February 20, 2015, the 2014 10-K signed by Defendants Ersek and Agrawal essentially repeated the information in the 2011, 2012, and 2013 10-Ks in that it “discussed ongoing governmental investigations, consent agreements, and enforcement actions by regulators, but claimed that these investigations were too preliminary for the Company to be able to predict their outcomes.” Id. ¶¶ 446, 449.
14. Filed February 19, 2016, the 2015 10-K signed by Defendants Ersek and Agrawal, “discussed ongoing governmental investigations, consent agreements, and enforcement actions by regulators. Although the 2015 10-K disclosed that MDPA ‘indicated that it believes Western Union failed to timely terminate or suspend certain Western Union agents who allegedly paid or forwarded thousands of fraud-induced transactions sent from the United States to various countries from at least 2008 to 2012,' the Company continued to claim that all of these investigations-including MDPA's-were too preliminary for the Company to be able to predict their outcomes.” Id. ¶¶ 473, 476.
15. Filed on May 3, 2016, the Q1 2016 10-Q signed by Defendants Ersek and Agrawal contained “substantially the same representations” but further “disclosed that MDPA ‘indicated that it believes Western Union failed to timely terminate or suspend certain Western Union agents who allegedly paid or forwarded thousands of fraud-induced transactions sent from the United States to various countries from at least 2008 to 2012.' The Company, however, continued to claim that all of its ongoing government investigations-including MDPA's-were too preliminary for the Company to be able to predict their outcomes.” Id. ¶¶ 482, 483.
16. Filed August 3, 2016, the Q2 2016 10-Q signed by Defendants Ersek and Agrawal contained substantially the same information as the Q1 2016 10-Q and further “disclosed that MDPA ‘indicated that it believes Western Union failed to timely terminate or suspend certain Western Union agents who allegedly paid or forwarded thousands of fraud-induced transactions sent from the United States to various countries from at least 2008 to 2012,' and that the ‘FTC staff has advised the Company that it has been directed to request authority from the FTC to file a complaint against the Company in United States federal court if it is not able to reach an agreement with the Company.' The Company, however, continued to claim that all of these investigations-including MDPA's and FTC's-were too preliminary for the Company to be able to predict their outcomes. The Company also contested the FTC's position by taking the strong position that ‘[i]f the FTC files a complaint against the Company, the Company intends to defend itself vigorously.'” Id. ¶¶ 488-89.
17. Filed November 1, 2016, the Q3 2016 10-Q signed by Defendants Ersek and Agrawal contained substantially the same information as the Q2 2016 10-Q and further “disclosed that the FTC advised the Company ‘of its view that the Company violated Section 5 of the Federal Trade Commission Act and the Telemarketing Sales rule by failing to take timely, appropriate, and effective measures to mitigate fraud in the processing of money transfers sent by consumers' and that the FTC staff ‘believes that the Company bears responsibility for principal amounts of what it alleges to be hundreds of millions of dollars in fraud-induced money transfers, or a multiple thereof based on the FTC's belief that fraud-induced money transfers are underreported by consumers, dating back to 2004.' The Company continued, however, to claim that all of these investigations-including MDPA's and FTC's-were too preliminary for the Company to be able to predict their outcomes. The Company also contested the FTC's position by declaring that ‘[t]he Company strongly disagrees with the FTC's assertions regarding its potential liability and any scope thereof' and that ‘[i]f the FTC files a complaint against the Company, the Company intends to defend itself vigorously.'” Id. ¶¶ 492-93; see also Id. ¶ 263. Plaintiffs emphasize that “even though multiple DOJ offices had already taken the position that Western Union committed serious compliance violations, even when Defendants disclosed in the Company's 10-Q for the third quarter of 2016, filed on November 1, 2016, that the Company ‘anticipate[d] entering into discussions with the United States Department of Justice to potentially resolve the four investigations' being conducted by the EDPA, CDCA, MDPA, and SDFL, Defendants continued to take the position that ‘[d]ue to the stage of these matters and the fact that no criminal charges or civil claims have been brought, the Company is unable to predict the outcome of these matters.'” Id. ¶ 282.
18. As part of the January 2017 settlement agreement with the DOJ, “Western Union admitted in the Statement of Facts . . . that its employees knew that its analyses and internal reports show that the amount of losses from fraudulent transactions sent through the Company was much higher than the amount identified in the Company's [Consumer Fraud Reports (“CFRs”)] database, because not every victim reported fraud to the Company.” Id. ¶ 155. “In addition, as the FTC found, fraud complaints in Western Union's database represent only a small percentage of the actual fraud perpetrated through Western Union's money transfer system because (a) as recognized by Western Union's own internal reports, the vast majority of fraud victims do not complain directly to the Company; (b) Western Union has failed to log in its complaint database all of the complaints and reports about fraud that it has received or the particular money transfers related to the complaints; and (c) in many countries, Western Union did not provide a fraud hotline or a toll-free phone number for victims to call to report fraud. Because of these multiple factors, the FTC determined that since 2004, Western Union has likely been used to send billions of dollars in fraud-induced payments to telemarketers and con artists worldwide.” Id. ¶ 156.

         Plaintiffs do not contest that, “[s]tarting in the first quarter of 2012, Western Union's annual and quarterly filings signed by Defendants Ersek and Scheirman and Agrawal disclosed the existence of these investigations into the Company's AML and anti-fraud programs.” Response [#63] at 47; see also Id. (stating that “Defendants made many statements related to the ongoing government investigations by four separate U.S. Attorney offices, the FTC, and state attorneys general that would culminate in the Joint Settlement”). Plaintiffs also concede that, “[a]s the Class Period progressed, Defendants continued to disclose the existence and topics of information requested in these and other investigations” and further disclosed that “Western Union was a ‘target' or ‘subject' of these investigations.” Id.

         Plaintiffs' primary concern, though, is that Defendants “stated at all times that these inquiries were too preliminary to be able to predict their outcomes ‘[d]ue to the stage of these matters and the fact that no criminal charges or civil claims have been brought.'” Response [#63] at 47 (quoting Am. Compl. [#40] ¶ 282). Plaintiffs argue that “[t]hese descriptions of the many ongoing government investigations were false and misleading because Western Union's potential liability was in fact substantial.” Response [#63] at 48. They state that “Defendants downplayed the likely outcome of ongoing government investigations when they knew of substantial compliance failures that subjected Western Union to the high risk of significant liability.” Id. at 49. Plaintiffs also state that “Defendants do not get credit for disclosing the existence of these inquiries and providing generic warnings when they failed to disclose essential information showing that those inquiries raised risks that were far-more substantial than they let on.” Id. They further argue that “Defendants failed to disclose the FTC's reasons for concluding that consumers underreported fraud” and that, regardless of Defendants' “subjective beliefs, they had a duty to disclose information concerning FTC's position that contradicted the basis for their public statements.” Id. at 49-50.

         In support of their argument, Plaintiffs cite to several cases. Id. at 48. First, in In re ITT Educational Services, Inc. Securities Litigation, 34 F.Supp.3d 298 (S.D.N.Y. 2014), contracts were signed between ITT (a for-profit college) and three student loan lenders which required ITT to pay for its students' loan default losses if those defaults reached a certain threshold. When the lenders informed ITT that the threshold had been reached and consequently began demanding “increasingly large sums of money, ” ITT continued to publicly represent that its liabilities “[w]ould be [i]mmaterial.” The court held that the defendants' public statements that “they were not expecting any significant liability under the [contracts] and that they could not predict the maximum potential liability to which they were exposed” was actionable where the plaintiffs had alleged that the defendants “knew that their liability . . . would be substantial.” Here, the Court notes that there are no allegations in the present case similar to the fact in ITT that Defendants publicly stated that they were not expecting any significant liability; rather, they only stated that they could not predict the outcome of those investigations.

         Plaintiffs cite to three other cases in support of their argument. First, in City of Pontiac General Employees' Retirement System v. Wal-Mart Stores, Inc., No. 12-CV-5162, 2014 WL 4823876 (W.D. Ark. Sept. 26, 2014), the court held that the disclosure of an internal corruption investigation was misleading because the defendants omitted their prior knowledge of events, thereby misleading investors as to when the defendants learned of the suspected corruption. Second, in In re Van der Moolen Holding N.V. Securities Litigation, 405 F.Supp.2d 388 (S.D.N.Y. 2005), the court held that a generic warning by the defendants regarding potential regulatory risks was affirmatively and materially misleading when the company already knew or was recklessly ignorant that its business strategy relied on practices that violated New York Stock Exchange trading laws. Third, in SEB Asset Management S.A. v. Western Union Company, No. 13-cv-03325-MSK-MJW, 2014 WL 5708522 (D. Colo. Sept. 29, 2015), the court held that statements acknowledging but downplaying the extent of Western Union's compliance problems in Mexico (statements like they “expected ‘some slow down'” and “expected ‘some challenges'”) gave rise to a duty to disclose after the point in time at which the defendants “would have had a meaningful estimate” of how many agents failed to meet compliance requirements. Based on allegations from a confidential witness, the court held that details regarding an action the defendants themselves were thinking of taking (i.e., the termination of 7, 000 agents) should have been revealed even if Western Union had not yet decided that it would terminate those agents, because just the “potential termination of a large number of agents” gave rise to a duty to disclose.

         In Response, Defendants argue that “they were not required to hazard guesses simply based on the potential severity of the outcome - even if that outcome may later have come to pass.” Reply [#70] at 58. They point out that “there were numerous factors potentially affecting the resolution or outcome of the investigations” and that “Plaintiff simply ignores all of these variables.” Id. at 59.

         In support, Defendants cite to the following cases. Id. at 58. First, in In re FBR Inc. Securities Litigation, 544 F.Supp.2d 346 (S.D.N.Y. 2008), the court held that there was no duty to disclose an “alleged regulatory violation related to a single, isolated event” in the absence of the risk having become a “near certainty.” Second, in Acito v. IMCERA Group, Inc., 47 F.3d 47 (2d Cir. 1995), the Second Circuit held that prior United States Food and Drug Administration “(FDA”) inspections which did not result in “any sanctions” or “other adverse consequences” were not material and that the defendants need not disclose upcoming FDA inspection where an adverse result was not a “foregone conclusion.” Third, in In re Marsh & McLennan Companies, Inc. Securities Litigation, 501 F.Supp.2d 452 (S.D.N.Y. 2006), the court held the defendants need not disclose where the result was not “substantially certain to occur” but that statements such as how the company “led the industry in terms of disclosure” were thus actionable. Fourth, in Anderson, 827 F.3d at 1229, the Tenth Circuit held that “the magnitude of the loss that Spirit ultimately sustained” did not necessarily constitute securities fraud when the plaintiffs' argument “amount[ed] to allegations of ‘fraud by hindsight.'” See also In re Sanofi Securities Litigation, 87 F.Supp.3d 510 (S.D.N.Y. 2015) (similarly cautioning against finding “fraud by hindsight”). Fifth, in Société Générale Securities Services, GcmH v. Caterpiller, Inc., No. 17 cv 1713, 2018 WL 4616356, at *6 (N.D. Ill. Sept. 26, 2018), the plaintiff had “essentially argue[d] that [the defendant] should have admitted a securities or tax law violation while the investigations were ongoing and the failure to do so was both a material omission and a misstatement.” The court found “such a position untenable. If every investigation or executed search warrant was evidence of wrongdoing then what purpose do hearings and trials have[?] . . . [S]ecurities laws generally do not impose such a duty upon publicly traded corporations to confess uncharged, unadjudicated claims of wrongdoing.”

         The Court agrees with Defendants that the statements regarding ongoing government investigations during the Class Period were not false or misleading. For example, in 2012, 2013, 2014, and 2015, the annual 10-K filings each disclosed the investigations, stated that Western Union “could face significant fines, damage awards or regulatory consequences” and that the investigations “could have a material adverse effect on the Company's business, financial condition, results of operations, and cash flows.” See [#57-3] at 22; [#57-13] at 24-25, 35-36, 39; [#57-19] at 31-32, 39; [#57-22] at 32-33, 41-42. Western Union disclosed that there were investigations and that the results of those investigations could be significant and material. Plaintiffs argue that the statements were false and misleading because Western Union's potential liability was substantial and that the “generic warnings” were insufficient. However, in their Response [#47] they have not pointed to what specific additional information they believe Western Union should have disclosed, and on the basis of these pleadings, the Court cannot determine that the investing public was deceived because Defendants stated that the investigations were too preliminary to predict their outcomes. The allegations before the Court, while certainly grave, fall far short of a finding that the outcomes of the investigations were near certainties or foregone conclusions.

         Plaintiffs relatedly argue that Defendants should have disclosed “the FTC's reasons for concluding that consumers underreported fraud” and that Defendants “had a duty to disclose information concerning FTC's position that contradicted the basis for their public statements.” Response [#63] at 49-50. In support, Plaintiffs cite to Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, 135 S.Ct. 1318, 1326, 1329 (2015). However, the cited portions of Omnicare do not precisely stand for the proposition as enunciated by Plaintiffs. While Omnicare strongly suggests that a company should make clear, if it makes a statement, whether “the Federal Government [is] taking the opposite view, ” nothing in the decision mandates that the company must fully lay out the opposing view's arguments and reasoning, as Plaintiffs appear to assert here. 135 S.Ct. at 1329; Response [#63] at 49-50. Further, to the extent that Plaintiffs argue that Defendants lied or misled regarding whether it agreed with the FTC's position that “consumers underreported fraud, ” it is clear that Defendants only stated that they disagreed with “potential liability and any scope thereof, ” and not that they disagreed that “consumers underreported fraud.” Response [#63] at 49; Reply [#70] at 60; see also [#57-25] at 11.

         In short, the Court finds that the allegations here described by Plaintiffs do not constitute legally actionable false or misleading statements.

         ii. 2013 & 2014 Statements by Defendants Ersek and Agrawal

          Next, Plaintiffs direct the Court's attention to three statements made by Defendants Ersek and Agrawal in 2013 and 2014. First, with respect to Defendant Ersek, they point to the following allegation:

On February 12, 2013, Western Union issued a press release announcing its financial results for the fiscal year and fourth quarter of 2012. On the Company's earnings conference call that was held the same day, an analyst asked “what gives you confidence that there is nothing in the compliance or something that stings you that you don't know about[?] I mean I guess one of the ways to think about it I guess is there's probably - is there anything out there that can be as large as the situation that happened with [the Southwest Border Agreement] that can have that kind of an impact on price?” In response, Defendant Ersek represented: “The regulatory environment is challenging. Obviously we are in very regulated market, but all our investments, about $100 million a year we invest in anti-money laundering and compliance, are really putting us as an industry standard. Being a market leader puts us in an industry standard, and we want to be a best-in-class and see that as a long-term as a competitive advantage. I think regulators are looking also at us, and we do have a duty to satisfy customer needs and we are working very hard on that.”

Am. Compl. [#40] ¶ 360. Plaintiffs further allege that on this same conference call “Defendants Ersek and Scheirman also continued to characterize the Company's compliance-related issues as limited to Mexico and Latin America as part of the Southwest Border Agreement, rather than the Company's more comprehensive failure to comply with pre-existing basic AML and anti-fraud requirements.” Id. ¶ 361.

         Second, also with respect to Defendant Ersek, Plaintiffs direct the Court's attention to the following allegation:

At a May 8, 2013 Jefferies Global Technology, Media and Telecom Conference, Defendant Ersek stated that the “regulatory environment” is “one of our biggest competenc[ies] here” as to the cross-border nature of the Company's business. The Jefferies analyst leading the discussion then picked up on these statements, as well as Defendants' consistent statements elsewhere that its compliance efforts are a “competitive advantage, ” and asked if the “worst is over” in terms of “compliance-related events.” Ersek responded that “compliance culture is in our DNA[]. Meanwhile, I think, creating this culture of compliance is something that it's very important” because of the life-changing benefits of remittances that customers receive through the Company.

Id. ¶ 381.

         Third, with respect to Defendant Agrawal, Plaintiffs direct the Court's attention to the following allegation:

In the Company's earnings conference call for the first quarter of 2014, held on May 1, 2014, Defendant Ersek stated as to the Company's ongoing compliance costs that “from today's points of view, I think, the team is doing a great job putting the teams right in place, that we have the compliance programs that it's competitive, even a competitive advantage. And I can see that part of that competitive advantage already in some countries like Mexico. . . . And it's all over actually . . . and I think, we have a good program that we covered world[wide] with that investment. . . . We did put programs, compliance programs, agent programs into place [in Mexico]. They're working.” Then, in response to an analyst's question about MDPA's investigation into Western Union's compliance efforts, which the Company disclosed in its 2013 10-K, Defendant Agrawal represented that “[i]t's early in the process and it's something that we're working through. We have good monitoring systems in place. We have a multi-faceted program to prevent consumer fraud, and outreach program with consumers. So, that's about all we can say right now and we're working through that.”

Id. ¶ 417.

         Plaintiffs assert that “[b]y making these positive statements concerning ongoing regulatory investigations, Defendants were required-but failed-to give investors the full picture and disclose the underlying compliance failures that gave rise to the substantial risk of liability that Western Union faced.” Id. at 51. In response, Defendants cite to Employees Retirement System of the City of Providence v. Embraer S.A., 16 Civ. 6277 (RMB), 2018 WL 1725574 (S.D.N.Y. Mar. 30, 2018), in which the court agreed with the argument that “[t]he Amended Complaint is premised on the faulty notion that Embraer was required to disclose details of the [United States Foreign Corrupt Practices Act] violations and admit that it had engaged in wrongdoing-before it had even been charged and before the investigations were even complete. However, the Second Circuit has held that disclosure is not a rite of confession and companies do not have a duty to disclose uncharged, unadjudicated wrongdoing.” The Court finds that Plaintiffs overstate their case regarding Defendants' statements describing then-ongoing government investigations. First, regarding the February 12, 2013 statement by Defendant Ersek that the Company was a “market leader, ” Am. Compl. [#40] ¶ 360, Plaintiffs provide no allegations that, despite any problems Western Union may have been experiencing, the company was not still a market leader in this realm. For example, they could have alleged other companies which were actually market leaders at this time. Second, regarding the May 8, 2013 statement by Defendant Ersek that “compliance culture is in our DNA, ” the Court finds (despite Plaintiffs' assertion to the contrary, see Response [#63] at 50 n.20) that this type of statement is nothing more than unverifiable puffery. See Grossman, 120 F.3d at 1118. Third, Plaintiffs point to Defendant Agrawal's May 1, 2014 statement that ““[i]t's early in the process and it's something that we're working through. We have good monitoring systems in place. We have a multi-faceted program to prevent consumer fraud, and outreach program with consumers.” When read in the full context of Plaintiff's allegations, as provided above, it is clear that the point was made that there was an ongoing investigation, and accordingly, the Court finds that Defendant Agrawal's subsequent statement constitutes nothing more sinister than vague statements of corporate optimism, which are simply not actionable under the securities laws. See Pirraglia, 339 F.3d at 1189. In short, the Court finds that the allegations here described by Plaintiffs do not constitute legally actionable false or misleading statements.

         Accordingly, to the extent Claim One is based on this category of purportedly false and misleading statements regarding government investigations, Claim One is dismissed against Defendants Ersek, Scheirman, Agrawal, and Western Union.

         b. Compliance Expenditures

         Plaintiffs argue that Defendants made untrue or misleading statements of material fact, or failed to state material facts necessary to make statements not misleading, regarding compliance expenditures. Response [#63] at 51-53. In addition to certain previously-quoted allegations which the Court has reviewed, [10] Plaintiffs cite to the ...


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