Case 1:12-cv-00033-JRN Document 12 Filed 02/29/12 Page 1 of 32

Case 1:12-cv-00033-JRN Document 12 Filed 02/29/12 Page 11 of 32misconduct.'" Jarrett v. Chase Home Fin. LLC, No. 3:10-CV-1907-M, 2011 U.S. Dist. LEXIS47317, at *7-8 (N.D. Tex. May 3, 2011)(quoting Iqbal, 129 S. Ct. at 1949-50). In short, a districtcourt "'retain[ s] the power to insist upon some specificity in pleading before allowing apotentially massive factual controversy to proceed. '" Twombly, 550 U.S. at 558.Because Plaintiff has asserted claims of securities fraud, the Complaint must satisfy theheightened pleading requirements of Rule 9(b).In order to state a claim under Rule 9(b),plaintiffs generally must plead the who, what, where, and when of the alleged fraud.ABCArbitrage v. Tchuruk, 291 F.3d 336, 349 (5th Cir. 2002); see also Gonzalez v. Bank of Am. Ins.Servs., No. 11-20174, 2011 U.S. App. LEXIS 25237, at *8-9 (5th Cir. Dec. 12, 2011) (acomplaint must state the "time, place and contents of the false representations, as well as theidentity of the person making the misrepresentation and what [that person] obtained thereby").IV. ARGUMENTS AND AUTHORITIESA. Plaintiff Failed to Adequately Plead a Section lOeb) Claim based upon Alleged ShortLife Expectancies.In order to state a claim under Section 1 O(b) and Rule 10b-5 promulgated thereunder,Plaintiff must allege that each of the Defendants: (1) used a fraudulent device, made a materialmisrepresentation or omission, or committed an act that operated as a fraud or deceit; (2) inconnection with the purchase or sale of a security; and (3) acted with scienter. 10 SEC v. Shapiro,No. 4:05-CV-364, 2008 U.S. Dist. LEXIS 17039, at *10 (E.D. Tex. March 5, 2008).Toadequately plead scienter, Plaintiff "must set forth specific facts that support an inference offraud." Tuchman v. DSC Comm 'ns Corp., 14 F.3d 1061, 1068 (5th Cir. 1994). Although a10 Other than reciting the elements of Rule 1 Ob-5( a) and 1 Ob-5( c) claims, Plaintiff failed to allege any facts tosupport such claims separate and apart from its misrepresentation claim under Rule lOb-5(b). Compl., ~157(i),(ii).However, "where the primary purpose and effect of a purported scheme is to make a public misrepresentation oromission, courts have routinely rejected the SEC's attempt to bypass the elements necessary to impose'misstatement' liability under subsection (b) by labeling the alleged misconduct a 'scheme' rather than a'misstatement. '" SEC v. Kelly, No. 08-Civ-04612 (CM), 2011 U.S. Dist. LEXIS 108805, at *8 (S.D.N.Y. Sept. 22,2011). Accordingly, Plaintiffs claim for liability claims under Rule 10b-5(a) and (c) claims must be dismissed.DEFENDANTS LIFE PARTNERS HOLDINGS, INC. AND R. SCOTT PEDEN'S MOTION TO DISMISSAND BRIEF IN SUPPORT - Page 5