{"cached_at":"2026-10-13T09:49:44.640884+00:00","cl_docket_id":"68999532","docket":{"resource_uri":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","id":68999532,"court":"https://www.courtlistener.com/api/rest/v4/courts/nyed/","court_id":"nyed","original_court_info":null,"idb_data":null,"clusters":[],"audio_files":[],"assigned_to":"https://www.courtlistener.com/api/rest/v4/people/597/","referred_to":null,"bankruptcy_information":null,"absolute_url":"/docket/68999532/martin-v-arbor-realty-trust-inc/","date_created":"2024-07-31T09:12:54.810636-07:00","date_modified":"2026-07-02T20:00:39.889903-07:00","source":1,"appeal_from_str":"","assigned_to_str":"Pamela K. Chen","referred_to_str":"Lara K. Eshkenazi","panel_str":"","date_last_index":"2024-10-31T15:43:29.602601-07:00","date_cert_granted":null,"date_cert_denied":null,"date_argued":null,"date_reargued":null,"date_reargument_denied":null,"date_filed":"2024-07-31","date_terminated":"2026-05-05","date_last_filing":"2026-05-05","case_name_short":"Martin","case_name":"Martin v. Arbor Realty Trust, Inc.","case_name_full":"","slug":"martin-v-arbor-realty-trust-inc","docket_number":"1:24-cv-05347","docket_number_core":"2405347","docket_number_raw":"1:24-cv-05347","docket_number_source":0,"federal_dn_office_code":"1","federal_dn_case_type":"cv","federal_dn_judge_initials_assigned":"PKC","federal_dn_judge_initials_referred":"LKE","federal_defendant_number":null,"pacer_case_id":"518627","cause":"15:78m(a) Securities Exchange Act","nature_of_suit":"850 Securities/Commodities","jury_demand":"Plaintiff","jurisdiction_type":"Federal Question","appellate_fee_status":"","appellate_case_type_information":"","mdl_status":"","filepath_ia":"","filepath_ia_json":"","ia_upload_failure_count":null,"ia_needs_upload":true,"ia_date_first_change":"2024-07-31T09:12:54.806214-07:00","date_blocked":null,"blocked":false,"appeal_from":null,"parent_docket":null,"tags":[],"panel":[]},"parties":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/14745298/","id":14745298,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917478/","attorney_id":9917478,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917478/","attorney_id":9917478,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":2}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"name":"Movant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-10-31T15:42:53.777663-07:00","date_modified":"2024-10-31T15:42:53.777675-07:00","name":"Paul Daniels","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/14745297/","id":14745297,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917477/","attorney_id":9917477,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"name":"Movant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-10-31T15:42:53.506680-07:00","date_modified":"2024-10-31T15:42:53.506688-07:00","name":"Charles C. Brooks","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/14745296/","id":14745296,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917476/","attorney_id":9917476,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"name":"Movant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-10-31T15:42:53.452633-07:00","date_modified":"2024-10-31T15:42:53.452645-07:00","name":"Matthew Park","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/14745295/","id":14745295,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9731099/","attorney_id":9731099,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"name":"Movant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-10-31T15:42:53.384727-07:00","date_modified":"2024-10-31T15:42:53.384737-07:00","name":"David Hawkins","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/14462033/","id":14462033,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917479/","attorney_id":9917479,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917479/","attorney_id":9917479,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":2},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917480/","attorney_id":9917480,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917481/","attorney_id":9917481,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-08-06T18:43:59.474321-07:00","date_modified":"2024-08-06T18:43:59.474329-07:00","name":"Paul Elenio","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/14462032/","id":14462032,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917479/","attorney_id":9917479,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917479/","attorney_id":9917479,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":2},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917480/","attorney_id":9917480,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917481/","attorney_id":9917481,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-08-06T18:43:59.468660-07:00","date_modified":"2024-08-06T18:43:59.468667-07:00","name":"Ivan Kaufman","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/14462031/","id":14462031,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917479/","attorney_id":9917479,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917479/","attorney_id":9917479,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":2},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917480/","attorney_id":9917480,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9917481/","attorney_id":9917481,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"name":"Defendant","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-08-06T18:43:59.460484-07:00","date_modified":"2024-08-06T18:43:59.460491-07:00","name":"Arbor Realty Trust, Inc.","extra_info":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/parties/14462030/","id":14462030,"attorneys":[{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9731099/","attorney_id":9731099,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":1},{"attorney":"https://www.courtlistener.com/api/rest/v4/attorneys/9731099/","attorney_id":9731099,"date_action":null,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"role":2}],"party_types":[{"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","docket_id":68999532,"name":"Plaintiff","date_terminated":null,"extra_info":"","highest_offense_level_opening":"","highest_offense_level_terminated":"","criminal_counts":[],"criminal_complaints":[]}],"date_created":"2024-08-06T18:43:59.431414-07:00","date_modified":"2024-08-06T18:43:59.431423-07:00","name":"Lois Martin","extra_info":""}],"entries":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/463040143/","id":463040143,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/478174676/","id":478174676,"tags":[],"absolute_url":"/docket/68999532/38/martin-v-arbor-realty-trust-inc/","date_created":"2026-05-05T13:04:13.549453-07:00","date_modified":"2026-05-06T23:30:09.657227-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"38","attachment_number":null,"pacer_doc_id":"123023717212","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Judgment - Clerk","acms_document_guid":""}],"date_created":"2026-05-05T13:04:13.512878-07:00","date_modified":"2026-05-06T23:30:09.619686-07:00","date_filed":"2026-05-05","time_filed":"15:58:34","entry_number":38,"recap_sequence_number":"2026-05-05.001","pacer_sequence_number":151,"description":"CLERK'S JUDGMENT: that judgment is hereby entered in favor of Defendants; and Plaintiffs' claims are dismissed with prejudice. Signed by Deputy Clerk, Jalitza Poveda, on behalf of Clerk of Court, Brenna B. Mahoney, on 5/5/2026. (JP) (Entered: 05/05/2026)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/462995175/","id":462995175,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/478128987/","id":478128987,"tags":[],"absolute_url":"","date_created":"2026-05-05T09:27:19.406297-07:00","date_modified":"2026-05-05T09:27:19.428562-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order Dismissing Case","acms_document_guid":""}],"date_created":"2026-05-05T09:27:19.392404-07:00","date_modified":"2026-05-05T09:27:19.392419-07:00","date_filed":"2026-05-05","time_filed":"12:18:22","entry_number":null,"recap_sequence_number":"2026-05-05.001","pacer_sequence_number":null,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/459143316/","id":459143316,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/474162437/","id":474162437,"tags":[],"absolute_url":"/docket/68999532/37/martin-v-arbor-realty-trust-inc/","date_created":"2026-03-31T09:03:18.106702-07:00","date_modified":"2026-07-02T20:00:40.072046-07:00","sha1":"b877afe7bca98257c9a611fe968a88c52d97f9f1","page_count":32,"file_size":363649,"filepath_local":"recap/gov.uscourts.nyed.518627/gov.uscourts.nyed.518627.37.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nyed.518627/gov.uscourts.nyed.518627.37.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:24-cv-05347-PKC-LKE                    Document 37   Filed 03/31/26   Page 1 of 32 PageID #:\n                                                     980\n\n\n\n UNITED STATES DISTRICT COURT\n EASTERN DISTRICT OF NEW YORK\n -------------------------------------------------------x\n LOIS MARTIN, individually and on behalf of\n all others similarly situated,\n\n                                 Plaintiff,                    MEMORANDUM & ORDER\n                                                                24-CV-5347 (PKC) (LKE)\n                   - against -\n\n ARBOR REALTY TRUST, INC. et al.,\n\n                                 Defendants.\n -------------------------------------------------------x\n PAMELA K. CHEN, United States District Judge:\n\n         Plaintiff Lois Martin (\u201cMartin\u201d), on behalf of herself and all other persons similarly\n\n situated, brings a putative class action against Defendants Arbor Realty Trust (\u201cABR\u201d), Ivan\n\n Kaufman (\u201cKaufman\u201d), and Paul Elenio (\u201cElenio\u201d), alleging violations of federal securities laws.\n\n (See Am. Compl., Dkt. 26, \u00b6\u00b6 1\u20132.) Defendants seek to dismiss Plaintiffs\u2019 Amended Complaint\n\n in its entirety. (Mot. to Dismiss (\u201cMTD\u201d), Dkt. 32.) For the reasons that follow, Defendants\u2019\n\n motion is GRANTED.\n\n                                                BACKGROUND 1\n\n I.      Factual Allegations\n\n         A.       ABR\u2019s Business Model\n\n         ABR is a real estate investment trust and direct lender that became a publicly traded\n\n company in 2004. (Am. Compl., Dkt. 26, \u00b6\u00b6 56\u201357.) Kaufman is ABR\u2019s \u201cFounder, Chief\n\n Executive Officer, President, Chairman, and voting member of the Company\u2019s Credit Committee,\u201d\n\n\n\n         1\n           For purposes of this Memorandum & Order, the Court assumes the truth of Plaintiffs\u2019\n non-conclusory, factual allegations in the Amended Complaint. Kiobel v. Royal Dutch Petrol.\n Co., 621 F.3d 111, 124 (2d Cir. 2010) (first citing Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); and\n then citing Selevan v. N.Y. Thruway Auth., 584 F.3d 82, 88 (2d Cir. 2009)).\n\fCase 1:24-cv-05347-PKC-LKE            Document 37         Filed 03/31/26      Page 2 of 32 PageID #:\n                                             981\n\n\n\n and Elenio is \u201cits Executive Vice President, Chief Financial Officer, and Head of Investor\n\n Relations.\u201d (Id. \u00b6 2.) ABR provides \u201cloan origination and servicing for multifamily, single-family\n\n rental . . . , and other commercial real estate assets for its own portfolio and for sale in the\n\n secondary market.\u201d (Id. \u00b6 57.)\n\n        ABR \u201coperates through two business segments: (1) its Agency Loan Origination and\n\n Servicing Business (\u2018Agency Business\u2019) and (2) its Structured Loan Origination and Investment\n\n Business (\u2018Structured Business).\u201d (Id. \u00b6 58.) Through its Agency Business, ABR originates\n\n \u201cprimarily fixed-rate long-term mortgages,\u201d (id. \u00b6 5), which it then sells to government-sponsored\n\n enterprises (\u201cGSEs\u201d) 2 as part of its \u201cAgency loans,\u201d 3 or pools, securitizes, and sells as part of its\n\n \u201cPrivate Label loans,\u201d (id. \u00b6\u00b6 59, 77). ABR then services these loans. (See id. \u00b6\u00b6 59, 62.) \u201c[The]\n\n Agency Business primarily generates revenue based on the gains and fees recognized from the\n\n origination and sale of mortgage loans.\u201d (Id. \u00b6 71.)\n\n        By contrast, through its Structured Business, ABR \u201cinvests in a portfolio of structured\n\n finance assets\u201d primarily consisting of \u201cshort-term, floating-rate loans\u201d such as bridge loans,\n\n mezzanine loans, and junior interests in first mortgages (\u201cStructured loans\u201d). (Id. \u00b6\u00b6 63, 66.) These\n\n types of loans allow borrowers time to \u201ctransition\u201d \u201cnon-stabilized property\u201d through\n\n \u201crenovations, repositioning[,] or lease-up,\u201d whereby the underlying asset accrues more value,\n\n\n\n\n        2\n         These are the \u201cFederal National Mortgage Association (\u2018Fannie Mae\u2019) and the Federal\n Home Loan Mortgage Corporation (\u2018Freddie Mac,\u2019 and together with Fannie Mae, the [GSEs].\u201d\n (See Am. Compl., Dkt. 26, \u00b6 59.)\n        3\n          An Agency loan is a loan that is originated, sold, and serviced through the GSEs, the\n Government National Mortgage Association (\u201cGinnie Mae\u201d), the Federal Housing Authority (the\n \u201cFHA\u201d), or the U.S. Department of Housing and Urban Development (together with Ginnie Mae\n and the FHA, \u201cHUD\u201d). (Am. Compl., Dkt. 26, \u00b6\u00b6 58\u201359.)\n\n\n\n                                                   2\n\fCase 1:24-cv-05347-PKC-LKE             Document 37        Filed 03/31/26     Page 3 of 32 PageID #:\n                                              982\n\n\n\n before seeking \u201clong-term, fixed-rate financing\u201d once the underlying asset has been \u201cstabilized.\u201d 4\n\n (Id. \u00b6\u00b6 64\u201366.) ABR then pools multiple Structured loans \u201ctogether into a marketable security\n\n collateralized by the pool of commercial real estate assets\u201d in the form of collateralized loan\n\n obligations (\u201cCLOs\u201d), (id. \u00b6\u00b6 78, 80, 82), which it then sells as CLO debt securities, (id. \u00b6\u00b6 79\u2013\n\n 80). ABR \u201ccreate[s] income for itself through its role as portfolio manager,\u201d i.e., collecting income\n\n \u201cearned on the underlying pool of assets\u201d\u2014or borrowers\u2019 loan payments\u2014and distributing this\n\n income as periodic interest and principal to the investors who purchased the CLO debt securities.\n\n (See id. \u00b6\u00b6 71, 78\u201380.) The CLO securitization process transfers part of the risk of loss on the\n\n underlying loans from ABR, to the CLO investors. (Id. \u00b6 80.) Typically, at the end of the\n\n \u201ctransition\u201d period, borrowers pay off their ABR-originated bridge loan with a subsequent\n\n \u201cconventional mortgage, such as [a] GSE/[A]gency loan[,]\u201d in a process known as a \u201ctakeout.\u201d\n\n (Id. \u00b6\u00b6 68\u201369.) The loans held \u201cthrough [ABR\u2019s] Structured Business are intended to be held-to-\n\n maturity and, accordingly, are carried at cost, net of unamortized loan origination costs and fees,\n\n loan purchase discounts, and net of the allowance for credit losses.\u201d 5 (Id. \u00b6 70.)\n\n        Thus, ABR\u2019s \u201cprimary business objective [is] to bring in a borrower at the acquisition or\n\n renovation stage of the underlying asset on a bridge loan originated by ABR, carry them through\n\n the transitional period, i.e., to maturity of the bridge loan or upon property stabilization, and exit\n\n them with an Agency loan originated, sold, and serviced by ABR, thereby providing it with two\n\n bites at the same deal.\u201d (Id. \u00b6 72.) And \u201cby securitizing the bridge loans that [it] originate[s],\n\n ABR create[s] income for itself through its role as portfolio manager, while removing risk from\n\n\n        4\n         \u201cA multifamily property is generally considered \u2018stabilized\u2019 when it has a consistent\n occupancy rate, predictable cash flow, and a healthy net operating income.\u201d (Am. Compl., Dkt. 26,\n \u00b6 67.)\n        5\n            Credit losses are discussed in detail in Section I.B(3) supra.\n\n\n\n                                                    3\n\fCase 1:24-cv-05347-PKC-LKE           Document 37        Filed 03/31/26      Page 4 of 32 PageID #:\n                                            983\n\n\n\n its balance sheet.\u201d (Id. \u00b6 80.) In essence, ABR has built a pipeline from loan origination to\n\n securitization to servicing, whereby it receives loan income at each step of the pipeline while\n\n progressively reducing its risk exposure to the underlying loan/asset by leveraging third parties.\n\n (See id. \u00b6\u00b6 72, 80.)\n\n         ABR\u2019s pipeline relies on certain financial analyses and related representations, and the due\n\n diligence it allegedly does. (See id. \u00b6\u00b6 84, 115.) To facilitate the loan origination process at the\n\n start of the pipeline, ABR maintains credit facilities 6 with so-called \u201cwarehouse lenders,\u201d 7 that\n\n provide capital in the form of debt collateralized by the subsequently originated loans. (Id. \u00b6 76.)\n\n If the ABR-originated loans lose value\u2014or if the warehouse lenders lose confidence in ABR\u2019s\n\n representations regarding the soundness of the loans\u2014ABR risks margin calls \u201crequiring ABR to\n\n pay cash back to the warehouse lender.\u201d (Id.) With regards to the takeout pipeline itself, softening\n\n in the financials of the properties underlying ABR\u2019s self-originated bridge loans may render the\n\n loans ineligible for takeout, 8 threatening ABR\u2019s longer term servicing revenue. (See id. \u00b6 93.)\n\n Third, while the CLO process transfers some risk from ABR to investors, ABR must make\n\n\n         6\n          The Amended Complaint suggests this is a \u201cline[] of credit\u201d for ABR. (See Am. Compl.,\n Dkt. 26, \u00b6 76.)\n         7\n           A \u201cwarehouse lender\u201d is \u201ca financial institution, typically a commercial bank or other\n corporate entity, that provides various structured financial solutions \u2013 either lines of credit or\n repurchase agreements \u2013 to non-depository independent lenders, like ABR,\u201d which allows lenders\n like ABR \u201cto fund new loans before selling them on the secondary market.\u201d (Id. \u00b6 76.) The\n warehouse lender thereby \u201cessentially act[s] as a temporary source of capital to facilitate the loan\n origination process by using the originated loans as collateral for the debt incurred.\u201d (Id.)\n         8\n          For example, properties where the measure of the cash flow available to pay current debt\n obligations (\u201cDSCR\u201d) is below certain thresholds are ineligible for Freddie Mac or Fannie Mae\n fixed-rate mortgage loans. (Id. \u00b6 93.) And changes in property value impact loan-to-value\n (\u201cLTV\u201d) ratios, which compare the amount of a loan to the value of the asset being purchased, or\n the percentage of a property\u2019s appraised value that is covered by its debt obligations. (Id. \u00b6\u00b6 87\u2013\n 90.) \u201cFannie Mae and Freddie Mac generally allow LTV ratios of up to 80% for multifamily\n financing,\u201d and Fannie Mae only allows up to 75% for refinancing. (Id. \u00b6 93.)\n\n\n\n                                                  4\n\fCase 1:24-cv-05347-PKC-LKE            Document 37         Filed 03/31/26      Page 5 of 32 PageID #:\n                                             984\n\n\n\n \u201cguarantees, in the form of recourse obligations upon violation of representations and warranties,\u201d\n\n which \u201cassure[] buyers that the loans being packaged compl[y] with underwriting standards and\n\n [meet] certain criteria relevant to the riskiness of the loan, such as the borrower\u2019s creditworthiness,\n\n the ratio of the borrower\u2019s total indebtedness to income or assets, and operational performance of\n\n the underlying property.\u201d (Id. \u00b6\u00b6 83\u201384.) Even apart from this pipeline, in the CLO context, \u201c[i]f\n\n the assets that back the debt underperform or default, [ABR is] the last to get paid.\u201d (Id. \u00b6 80.)\n\n Accordingly, ABR\u2019s business model relies on its \u201cconservative underwriting standards for its\n\n Structured loans.\u201d (Id. \u00b6 95; see id. \u00b6\u00b6 91\u201392 (quoting ABR\u2019s underwriter guidance, as provided\n\n in ABR\u2019s 2021 10-K 9).)\n\n        B.      Changes in the Real Estate Market\n\n        In late 2020, the multifamily real estate market, particularly in Texas, Florida, and Georgia,\n\n was flooded with inexperienced \u201csyndicators,\u201d which are \u201cindividuals [who] pool funds from\n\n multiple small-time investors to buy properties.\u201d (Id. \u00b6\u00b6 97, 101.) These syndicators \u201craise[d]\n\n money from a group of investors to buy a large commercial property, often an apartment complex,\n\n self-storage facility, or housing community, that they likely [could not] afford on their own.\u201d (Id.\n\n \u00b6\u00b6 97\u201398, 101\u201303.) The influx of investment made the market more competitive and financing\n\n laxer, and risked overleveraging properties with bridge loans susceptible to inflation. (Id. \u00b6\u00b6 105\u2013\n\n 08.) Moreover, syndicators had little incentive to maintain or improve the properties they\n\n purchased. (Id. \u00b6 108.) They recouped what little money they put into the purchases through\n\n acquisition and management fees, and \u201cwould suffer little to no loss if the property [was]\n\n condemned or there [was] a forced sale,\u201d \u201csuch that there was significant risk that the\n\n\n\n        9\n           10-Ks are public companies\u2019 annual reports. SEC, How to Read a 10-K,\n https://www.sec.gov/answers/reada10k.htm (last accessed Mar. 10, 2026).\n\n\n\n                                                   5\n\fCase 1:24-cv-05347-PKC-LKE            Document 37         Filed 03/31/26      Page 6 of 32 PageID #:\n                                             985\n\n\n\n unincentivized and inexperienced syndicator would deprive the property of necessary\n\n rehabilitation when faced with increased operating expenses.\u201d (Id. \u00b6\u00b6 105\u201308.) In essence, there\n\n was a significant risk the syndicators would fail to stabilize the underlying asset, which would\n\n remain ineligible for long-term, fixed rate loans.\n\n        C.      ABR\u2019s Portfolio Grows\n\n        Despite the inherent riskiness of the market, ABR\u2019s Structured Business grew 122%\n\n between Financial Year (\u201cFY\u201d) 2020 and FY 2021, and 19% between FY 2021 and FY 2022. (Id.\n\n \u00b6\u00b6 110\u201311.) \u201cAs of December 31, 2021, 91% of [ABR\u2019s] Structured loan portfolio consisted of\n\n multifamily commercial real estate assets,\u201d 12% and 19% of which were in Florida and Texas\n\n respectively. (Id. \u00b6 110.) \u201cAs of December 31, 2022, 98% of ABR\u2019s Structured portfolio consisted\n\n of housing-related bridge loans, 91% of which were multifamily commercial real estate assets\u201d;\n\n 14% and 22% of ABR\u2019s Structured loans were in Florida and Texas respectively. (Id. \u00b6 111.)\n\n        D.      Financial Research Reports Question ABR\u2019s Performance\n\n        Starting in 2023, ABR became the target of a series of reports by the international financial\n\n research group Viceroy. (See id. \u00b6\u00b6 225, 228.) Between 2023 and 2024, Viceroy published a\n\n number of reports questioning the quality of ABR\u2019s loan book, including one in November 2023,\n\n which claimed that \u201cits investigative research team had reviewed hundreds of ABR\u2019s individual\n\n loans and determined that they were all at severe risk due to rising interest rates, declining property\n\n values, and impending maturity dates without viable refinancing options anywhere.\u201d (Id. \u00b6\u00b6 228\u2013\n\n 45.) Then, on July 12, 2024, Bloomberg reported that the Manhattan U.S. Attorney\u2019s Office and\n\n the Federal Bureau of Investigation (\u201cFBI\u201d) in New York were actively investigating ABR\u2019s\n\n operations and reporting \u201con the heels of short seller 10 attacks about the lender\u2019s practices and\n\n\n        10\n           \u201cA short seller speculates that a particular stock will go down in price and seeks to profit\n from that drop.\u201d Harris v. AmTrust Fin. Servs., Inc., 135 F. Supp. 3d 155, 160 (S.D.N.Y. 2015),\n\n\n                                                   6\n\fCase 1:24-cv-05347-PKC-LKE            Document 37        Filed 03/31/26      Page 7 of 32 PageID #:\n                                             986\n\n\n\n disclosures.\u201d (Id. \u00b6 246.) After each of these reports, 11 ABR\u2019s stock price declined. (See id.\n\n \u00b6\u00b6 232, 238, 245, 247.)\n\n II.    Procedural History\n\n        On July 31, 2024, Plaintiff Lois Martin filed the Complaint as a putative class action,\n\n individually and \u201con behalf of all investors who purchased or otherwise acquired ABR\u2019s securities\n\n between May 2, 2021[,] to July 11, 2024, inclusive.\u201d (Compl., Dkt. 1, \u00b6 1.) On November 5, 2024,\n\n the Court appointed Plaintiff David Hawkins as the lead plaintiff in this action. (11/5/2024 Dkt.\n\n Order Adopting Report & Recommendation.) On January 21, 2025, Plaintiffs filed the Amended\n\n Complaint on \u201cbehalf of a class consisting of all persons and entities who purchased or otherwise\n\n acquired ABR\u2019s securities between May 7, 2021[,] and July 11, 2024, both dates inclusive.\u201d (Am.\n\n Compl., Dkt. 26, \u00b6 1.)\n\n\n\n aff\u2019d, 649 F. App\u2019x 7 (2d Cir. 2016) (internal quotation marks and citation omitted). While the\n Amended Complaint does not identify Viceroy as a short seller, it quotes articles referring to\n Viceroy as such. (See Am. Compl., Dkt. 26, \u00b6 635 (quoting The Real Deal, a \u201creal estate news\n outlet\u201d).)\n        11\n             Plaintiffs characterize the Viceroy and Bloomberg reports as \u201cpartial corrective\n disclosures.\u201d (Id. \u00b6 225.) \u201cCorrective disclosures\u201d are considered \u201closs-inducing\u201d events for\n purposes of establishing \u201closs causation,\u201d i.e., that a plaintiff\u2019s loss was caused by the defendant\u2019s\n actions, in a securities fraud case. See In re UiPath, Inc. Sec. Litig., No. 24-CV-4702 (JPC), 2025\n WL 2065093, at *18 (S.D.N.Y. July 23, 2025) (\u201c[T]o establish loss causation, a plaintiff must\n allege that the misstatement or omission concealed something from the market that, when\n disclosed, negatively affected the value of the security. Most classically, loss-inducing events take\n the form of corrective disclosures. A corrective disclosure is traditionally an admission by the\n company that one or more of its previous statements were false or misleading followed by a\n corrected, truthful and complete version of those statements.\u201d (internal quotation marks and\n citations omitted)); Arkansas Tchr. Ret. Sys. v. Goldman Sachs Grp., Inc., 77 F.4th 74, 97\u201399 (2d\n Cir. 2023) (discussing types of corrective disclosures and the mechanisms through which these\n revealed prior misrepresentations); see also In re EHang Holdings Ltd. Sec. Litig., 646 F. Supp.\n 3d 443, 465 (S.D.N.Y. 2022) (noting that corrective disclosures often \u201creveal at least part of the\n falsity of [a] misstatement\u201d). \u201cPartial corrective disclosures\u201d are disclosures that, standing alone,\n cannot constitute a corrective disclosure. See 2 Harold S. Bloomenthal & Samuel Wolff, Sec. Law\n Handbook \u00a7 29:89, Westlaw SECLAW-HB (database updated Oct. 2025).\n\n\n\n                                                   7\n\fCase 1:24-cv-05347-PKC-LKE            Document 37        Filed 03/31/26      Page 8 of 32 PageID #:\n                                             987\n\n\n\n        In the Amended Complaint, Plaintiffs bring two sets of claims: (1) violations of\n\n Section 10(b) of the Securities Exchange Act of 1934 (the \u201cExchange Act\u201d), 15 U.S.C. \u00a7 78j(b),\n\n and Securities and Exchange Commission (\u201cSEC\u201d) Rule 10b-5, 17 C.F.R. \u00a7 240.10b-5, against all\n\n Defendants, (Am. Compl., Dkt. 26, \u00b6\u00b6 656\u201364); and (2) violations of Section 20(a) of the\n\n Exchange Act, 15 U.S.C. \u00a7 78t(a), against Kaufman and Elenio, (id. \u00b6\u00b6 665\u201371). Defendants\u2019\n\n motion to dismiss was fully briefed on June 16, 2025. (See MTD, Dkt. 32; Mem. in Opp\u2019n MTD\n\n (\u201cOpp\u2019n\u201d), Dkt. 33; Reply Supp. MTD (\u201cReply\u201d), Dkt. 34.)\n\n                                       LEGAL STANDARD\n\n        To survive a motion to dismiss under Federal Rule of Civil Procedure (\u201cRule\u201d) 12(b)(6),\n\n \u201ca complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that\n\n is plausible on its face.\u201d Hogan v. Fischer, 738 F.3d 509, 514 (2d Cir. 2013) (quoting Iqbal, 556\n\n at 678). \u201cA claim has facial plausibility when the plaintiff pleads factual content that allows the\n\n court to draw the reasonable inference that the defendant is liable for the misconduct alleged.\u201d\n\n Iqbal, 556 U.S. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)). \u201cThe\n\n plausibility standard is not akin to a \u2018probability requirement,\u2019 but it asks for more than a sheer\n\n possibility that a defendant has acted unlawfully.\u201d Id. (quoting Twombly, 550 U.S. at 556). The\n\n general pleading standard does not require \u201cdetailed factual allegations,\u201d but still \u201crequires more\n\n than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not\n\n do.\u201d Twombly, 550 U.S. at 555. But \u201c[a]ny complaint alleging securities fraud must satisfy the\n\n heightened pleading requirements\u201d of the Private Securities Litigation Reform Act of 1995 (the\n\n \u201cPSLRA\u201d) and Rule 9(b) \u201cby stating with particularity the circumstances constituting fraud.\u201d\n\n Gimpel v. The Hain Celestial Grp., Inc., 156 F.4th 121, 135 (2d Cir. 2025) (quoting ECA, Loc. 134\n\n IBEW Joint Pension Tr. of Chicago v. JP Morgan Chase Co., 553 F.3d 187, 196 (2d Cir. 2009)).\n\n Under that heightened standard, the plaintiff must (1) \u201cspecify each statement alleged to have been\n\n\n                                                   8\n\fCase 1:24-cv-05347-PKC-LKE             Document 37        Filed 03/31/26       Page 9 of 32 PageID #:\n                                              988\n\n\n\n misleading [and] the reason or reasons why the statement is misleading\u201d; and (2) \u201cstate with\n\n particularity facts giving rise to a strong inference that the defendant acted with the required state\n\n of mind, i.e., scienter.\u201d Id. (internal quotation marks omitted); accord 15 U.S.C. \u00a7 78u-4(b)(1),\n\n 78u-4(b)(2).\n\n                                            DISCUSSION\n\n I.      Plaintiffs\u2019 Section 10(b) and Rule 10b-5 Claims\n\n         A.      Section 10(b) and Rule 10b-5\n\n         Section 10(b) of the Exchange Act makes it unlawful \u201c[t]o use or employ, in connection\n\n with the purchase or sale of any security[,] . . . any manipulative or deceptive device or contrivance\n\n in contravention of such rules and regulations as the [SEC] may prescribe as necessary or\n\n appropriate in the public interest or for the protection of investors.\u201d Emps.\u2019 Ret. Sys. of Gov\u2019t of\n\n the V.I. v. Blanford, 794 F.3d 297, 304\u201305 (2d Cir. 2015) (first two alterations in original) (quoting\n\n 15 U.S.C. \u00a7 78j(b)). \u201cSEC Rule 10b\u20135 implements this provision of the Exchange Act and\n\n explicitly prohibits \u2018mak[ing] any untrue statement of a material fact.\u2019\u201d Id. (alteration in original)\n\n (quoting 17 C.F.R. \u00a7 240.10b\u20135(b)). To state a claim under Section 10(b) and Rule 10b-5, a\n\n complaint must plausibly allege: \u201c(1) a material misrepresentation (or omission); (2) scienter, i.e.,\n\n a wrongful state of mind; (3) a connection with the purchase or sale of a security; (4) reliance . . . ;\n\n (5) economic loss; and (6) loss causation.\u2019\u201d Singh v. Cigna Corp., 918 F.3d 57, 62 (2d Cir. 2019)\n\n (quoting Kleinman v. Elan Corp., plc, 706 F.3d 145, 152 (2d Cir. 2013)). \u201c[F]ailure to establish\n\n any of these elements is fatal to a Section 10(b) or Rule 10b-5 claim.\u201d Gera v. Luthra, No. 23-\n\n CV-5573 (OEM) (LB), 2025 WL 3818459, at *3 (E.D.N.Y. Oct. 1, 2025) (alteration in original)\n\n (quoting Greene v. WCI Holdings Corp., 956 F. Supp. 509, 518 (S.D.N.Y. 1997)); see also\n\n Saskatchewan Healthcare Emp.\u2019s Pension Plan v. KE Holdings Inc., 718 F. Supp. 3d 344, 390\u2013\n\n 91 (S.D.N.Y. 2024) (collecting cases).\n\n\n                                                    9\n\fCase 1:24-cv-05347-PKC-LKE             Document 37 Filed 03/31/26               Page 10 of 32 PageID #:\n                                               989\n\n\n\n         Both false statements and material omissions can be unlawful under Section 10(b) and\n\n Rule 10b\u20135. Gimpel, 156 F.4th at 138 (noting \u201ctwo actionable theories under Section 10(b) and\n\n Rule 10b\u20135: (1) a false statement, i.e., \u2018an actual statement . . . that is . . . untrue outright,\u2019 and (2)\n\n a half-truth, i.e., a \u2018representation[ ] that state[s] the truth only so far as it goes, while omitting\n\n critical qualifying information.\u2019\u201d (quoting In re Vivendi, S.A. Sec. Litig., 838 F.3d 223, 239\u201340 (2d\n\n Cir. 2016))). A false statement must be \u201cfalse at the time it was made, and the plaintiff must\n\n demonstrate with specificity why the statement is false.\u201d Id. (citing Rombach v. Chang, 355\n\n F.3d 164, 172 (2d Cir. 2004)); see also In re Arqit Quantum Inc. Sec. Litig., 774 F. Supp. 3d 505,\n\n 544 (E.D.N.Y. 2025) (\u201cA violation of Section 10(b) and Rule 10b-5 premised on misstatements\n\n cannot occur unless an alleged material misstatement was false at the time it was made.\u201d (quoting\n\n In re Lululemon Sec. Litig., 14 F. Supp. 3d 553, 571 (S.D.N.Y. 2014) (emphasis omitted), aff\u2019d,\n\n 604 F. App\u2019x 62 (2d Cir. 2015))). With regard to omissions, once a company \u201cspeaks on an issue\n\n or topic,\u201d it must \u201ctell the whole truth.\u201d Gimpel, 156 F.4th at 139 (citations omitted).\n\n         In the context of a Section 10(b) claim, the Second Circuit has interpreted Rule 9(b) to\n\n require that a plaintiff must \u201c(1) specify the statements that the plaintiff contends were fraudulent,\n\n (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why\n\n the statements were fraudulent.\u201d Arqit, 774 F. Supp. 3d at 544 (quoting Nakahata v. N.Y.-\n\n Presbyterian Healthcare Sys., Inc., 723 F.3d 192, 197\u201398 (2d Cir. 2013)).                   \u201cAn alleged\n\n misrepresentation is material if \u2018there is a substantial likelihood that a reasonable person would\n\n consider it important in deciding whether to buy or sell shares of stock.\u2019\u201d Singh, 918 F.3d at 63\n\n (quoting Operating Loc. 649 Annuity Tr. Fund v. Smith Barney Fund Mgmt. LLC, 595 F.3d 86,\n\n 92\u201393 (2d Cir. 2010)). \u201cSuch a statement must, in the view of a reasonable investor, have\n\n \u2018significantly altered the \u201ctotal mix\u201d of information made available.\u2019\u201d Id. (quoting ECA, 553 F.3d\n\n\n\n\n                                                     10\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26              Page 11 of 32 PageID #:\n                                             990\n\n\n\n at 197). \u201cTo determine whether a statement is misleading, [the Court\u2019s] inquiry is objective, from\n\n the perspective of a \u2018reasonable investor,\u2019 considering not only a statement\u2019s \u2018literal truth\u2019 but also\n\n its \u2018context and manner of presentation.\u2019\u201d Id. (quoting Singh, 918 F.3d at 63).\n\n        B.      Defendants\u2019 Allegedly False Statements\n\n        Plaintiffs allege that between 2021 and 2024, Defendants made a series of false and/or\n\n misleading statements about: (1) ABR\u2019s underwriting standards and portfolio quality, (see, e.g.,\n\n Am. Compl., Dkt. 26, \u00b6\u00b6 272\u201373); (2) ABR\u2019s internal risk controls, which provide the review\n\n infrastructure around ABR\u2019s underwriting and portfolio, (see, e.g., id. \u00b6\u00b6 259\u201362); and (3) ABR\u2019s\n\n financial condition, (see, e.g., id. \u00b6\u00b6 257\u201358, 265\u201367). 12,13 Because, according to Plaintiffs,\n\n Defendants repeated the same types of statements throughout the relevant time frame, 14 the Court\n\n reviews only a representative sample of each type of statement.\n\n                1.      Statements Regarding ABR\u2019s Underwriting Standards and Portfolio Quality\n\n        The first category of alleged misstatements are those pertaining to Defendants\u2019\n\n underwriting standards and guidelines. Representative of this category are Defendant Kaufman\u2019s\n\n\n\n        12\n          Although Defendants group the statements into two categories, (see Mem. Supp. MTD,\n Dkt. 32-1, at 9 (citing Am. Compl., Dkt. 26, \u00b6\u00b6 258, 211)), the Court finds that Defendants\u2019\n grouping collapses distinct issues, and declines to adopt it.\n        13\n           Both parties cite to ABR\u2019s financial disclosures with the SEC. \u201cIn determining whether\n dismissal is warranted pursuant to [Rule] 12(b)(6), a court may \u2018consider any written instrument\n attached to the complaint, statements or documents incorporated into the complaint by reference,\n legally required public disclosure documents filed with the SEC, and documents possessed by or\n known to the plaintiff and upon which it relied in bringing the suit.\u2019\u201d Arqit, 774 F. Supp. 3d at 521\n (quoting Kleinman, 706 F.3d at 152). The Court therefore considers these financial disclosures as\n incorporated by reference into the Amended Complaint.\n        14\n         Instead of grouping the alleged false statements by type, the Amended Complaint recites\n each one in chronological order across each financial quarter, consuming nearly 130 of the\n Amended Complaint\u2019s 224 pages. Indeed, Defendants aptly describe \u201cPlaintiffs\u2019 224-page\n Amended Complaint [as] a textbook puzzle pleading.\u201d (See Mem. Supp. MTD, Dkt. 32-1, at 8.)\n\n\n\n                                                   11\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 12 of 32 PageID #:\n                                             991\n\n\n\n statements during an earnings call in the first quarter of 2021 (\u201c1Q21\u201d), \u201cthat \u2018one of [ABR\u2019s] key\n\n business strategies is the financing of our high-quality balance sheet portfolio\u2019\u201d and that ABR\u2019s\n\n \u201cbalance sheet loans also create a substantial pipeline of future GSE agency origination\n\n volumes and long-dated servicing revenues, further increasing our future earnings and\n\n dividends,\u201d (\u201cKaufman\u2019s 1Q21 Statements\u201d). (Am. Compl., Dkt. 26, \u00b6 272 (emphasis in original).)\n\n Plaintiffs allege that, in making these statements, \u201cKaufman knew but failed to disclose that [ABR]\n\n had substantially deviated from its underwriting standards and guidelines to drive up loan volume\n\n resulting in an influx of structurally unsound multifamily bridge loans at material risk of non-\n\n performance and/or default from the time of origination, . . . [as] corroborated by the accounts of\n\n [nine former employees (\u2018FEs\u2019)].\u201d (Id. \u00b6 273.) Plaintiffs further allege that, \u201cas corroborated by\n\n FE1, FE2, and FE11, [ABR had] abandoned its stated standards of underwriting its Structured\n\n loans for Agency takeout,\u201d and that, \u201c[a]s a result, . . . [ABR] had not [in fact] maintained a \u2018high-\n\n quality balance sheet portfolio[,]\u2019 and its balance sheet loans no longer supported a \u2018pipeline of\n\n future GSE agency origination volumes and long-dated service revenues.\u2019\u201d (Id. \u00b6\u00b6 272\u201373.)\n\n        These statements do not support a Section 10(b) claim for two reasons: (1) they do not\n\n amount to actionable fraud because they are either puffery or too general; and (2) even if these\n\n statements are actionable, Plaintiffs fail to sufficiently allege the contemporary falsity of these\n\n statements.\n\n                        a)      Puffery or General Statements\n\n        Kaufman\u2019s 1Q21 Statements\u2014touting ABR\u2019s \u201chigh-quality balance sheet portfolio\u201d and\n\n its creation of \u201ca substantial pipeline of future GSE agency origination volumes and long-dated\n\n servicing revenues,\u201d (see id. \u00b6 272)\u2014do not amount to actionable fraud. Rather, these statements\n\n are \u201cno more than \u2018puffery\u2019\u201d and \u201ctoo general to cause a reasonable investor to rely upon them.\u201d\n\n See ECA, 553 F.3d at 206; In re Synchrony Fin. Sec. Litig., 988 F.3d 157, 170 (2d Cir. 2021)\n\n\n                                                  12\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26              Page 13 of 32 PageID #:\n                                             992\n\n\n\n (finding \u201cstatements that the company was \u2018pretty confident\u2019 and \u2018pretty positive\u2019 about the\n\n prospect of renewing partnerships,\u201d as well as language like \u201cstable asset quality\u201d and \u201cpartner-\n\n centric business model [that] has been successful because it aligns [its] interests with those of [its]\n\n partners\u201d inactionable corporate puffery); Police & Fire Ret. Sys. Detroit v. Argo Grp. Int\u2019l\n\n Holdings, Ltd., No. 22-CV-8971 (LAK), 2024 WL 5089970, at *11 (S.D.N.Y. Dec. 12, 2024)\n\n (collecting cases finding similar statements of general corporate optimism to be inactionable\n\n \u201cpuffery\u201d) 15; City of Westland Police & Fire Ret. Sys. v. MetLife, Inc., 129 F. Supp. 3d 48, 77\n\n (S.D.N.Y. 2015) (concluding that characterizations of underwriting as \u201csolid,\u201d as well as other\n\n similar representations, \u201care not actionable under the securities laws\u201d because they are \u201cmerely\n\n generalizations regarding [defendant\u2019s] business practices,\u201d which the Second Circuit\n\n \u201c\u2018consistently [has] held to be inactionable\u2019 puffery\u201d (citations omitted)); In re Wachovia Equity\n\n Sec. Litig., 753 F. Supp. 2d 326, 354 (S.D.N.Y. 2011) (\u201cDefendants\u2019 statements about their\n\n \u2018conservative\u2019 underwriting and risk management constitute corporate puffery rather than\n\n actionable misrepresentations.\u201d).\n\n        Even Defendants\u2019 slightly more specific representations that ABR\u2019s \u201cbusiness model on\n\n every bridge loan . . . is for an Agency takeout . . . . So each and every loan that\u2019s in [ABR\u2019s]\n\n portfolio is underwritten accordingly,\u201d (Am. Compl., Dkt. 26, \u00b6 166), thereby creating a\n\n \u201csubstantial pipeline of future GSE agency origination volumes and long-dated servicing\n\n revenues,\u201d (id. \u00b6 272), are also mere \u201cgeneralizations regarding [ABR\u2019s] business practices,\u201d see\n\n ECA, 553 F.3d at 206. Indeed, \u201cthese statements d[o] not, and could not, amount to a guarantee\n\n\n        15\n           While the instant case discusses real estate-based financials and alleged fraud, the Court\n also draws on securities fraud case law arising in both the banking and insurance contexts, as the\n case law itself cites these interchangeably. See, e.g., Woolgar v. Kingstone Cos., 477 F. Supp. 3d\n 193, 232 (S.D.N.Y. 2020) (citing Waterford Twp. Police & Fire Ret. Sys. v. Reg\u2019l Mgmt. Corp.,\n No. 14-CV-3876 (LTS), 2016 WL 1261135, at *10 (S.D.N.Y. Mar. 30, 2016)).\n\n\n\n                                                   13\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 14 of 32 PageID #:\n                                             993\n\n\n\n that [ABR\u2019s] choices would prevent failures in\u201d its Agency takeout business model. See id. (\u201cThe\n\n Company could not guarantee and did not guarantee . . . that its investment choices would yield\n\n increased future earnings.\u201d (quoting Lasker v. N.Y. State Elec. & Gas Corp., 85 F.3d 55, 59 (2d\n\n Cir. 1996))); cf. Friedman v. Endo Int\u2019l PLC, No. 16-CV-3912 (JMF), 2018 WL 446189, at *7\n\n (S.D.N.Y. Jan. 16, 2018) (rejecting plaintiffs\u2019 allegations that defendant had \u201cengaged in an ill-\n\n advised \u2018acquisition spree\u2019\u201d as unactionable because \u201c[t]he securities laws . . . do not provide\n\n remedies for bad business decisions\u201d). 16\n\n        The closest Plaintiffs come to alleging actionable false statements is their discussion of rate\n\n caps 17 for loans. (See Am. Compl., Dkt. 26, \u00b6\u00b6 329\u201332.) Plaintiffs point to statements Kaufman\n\n made during ABR\u2019s Third Quarter 2021 (\u201c3Q21\u201d) Earnings Call regarding rate caps for various\n\n types of loans. (See id. \u00b6 330 (excerpting Kaufman\u2019s statements where he notes that rate caps have\n\n been mandatory for \u201cfloating rate\u201d loans since the previous week, and that rate caps on portfolio\n\n loans would increase rates, which ABR \u201cwant[s] to protect . . . against\u201d (\u201cKaufman\u2019s 3Q21\n\n Statements\u201d)).) Plaintiffs allege that these statements are false because, according to one ABR FE,\n\n \u201cABR stopped requiring rate caps for \u2018stronger performing deals\u2019 around mid- to late-2021,\u201d and,\n\n according to another FE, \u201cin early-2022, [ABR] no longer required rate caps on any bridge loans.\u201d\n\n\n\n        16\n           Some courts have found such statements inactionable because \u201cthe descriptive terms\n used in these statements, such as \u2018large\u2019 and \u2018growing\u2019 . . . are to a large extent \u2018neither\n quantifiable nor factual, but rather subject to interpretation, within reason.\u2019\u201d See Saskatchewan\n Healthcare Emp.\u2019s Pension Plan v. KE Holdings Inc., 718 F. Supp. 3d 344, 385 (S.D.N.Y. 2024)\n (quoting In re Yunji Inc., Sec. Litig., No. 19-CV-6403 (LDH) (SMG), 2021 WL 1439715, at *8\n (E.D.N.Y. Mar. 31, 2021)).\n        17\n            Rate caps \u201climit[] how high an interest rate can rise over a set period of time,\u201d and thus\n act as insurance for borrowers with floating-rate loans. (See Am. Compl., Dkt. 26, \u00b6 134.) If\n interest rates go above the \u201crate cap,\u201d the \u201cbuyer of the rate cap receives payments\u201d to cover the\n difference. (Id.) \u201c[L]enders typically require borrowers to purchase rate caps before closing on a\n floating-rate loan.\u201d (Id.)\n\n\n\n                                                  14\n\fCase 1:24-cv-05347-PKC-LKE          Document 37 Filed 03/31/26            Page 15 of 32 PageID #:\n                                            994\n\n\n\n (Id. \u00b6 332.) But Kaufman\u2019s statements were on October 29, 2021, (id. \u00b6 317), and thus ABR\u2019s\n\n alleged policy in early 2022 is irrelevant. Nor is ABR\u2019s alleged policy of not requiring rate caps\n\n for \u201cstronger performing deals\u201d incongruous with Kaufman\u2019s statements at the 3Q21 Earnings Call\n\n about \u201cprotecting against\u201d rate caps on non-floating rate deals 18 that might increase rates. Later\n\n discussions of rate caps, (see id. \u00b6\u00b6 422, 518), involve similar nuances regarding the type of loan\n\n and ABR\u2019s business approach. Plaintiffs therefore have not alleged facts showing Kaufman\u2019s\n\n 3Q21 Statements were false.\n\n                       b)      Insufficient Allegations Showing Contemporary Falsity\n\n        Even if these statements were not precluded on the basis of puffery, Plaintiffs have failed\n\n to sufficiently allege facts from which to reasonably infer that Kaufman knew that his 1Q21\n\n Statements were false. See Ray v. StoneCo Ltd., No. 21-CV-9620 (GHW), 2024 WL 4308130,\n\n at *7 (S.D.N.Y. Sep. 25, 2024) (\u201cStatements of optimism and puffery can be actionable where they\n\n contradict facts that are known to a defendant, or where they amount to misrepresentations of\n\n existing facts that were made even though the speaker knew that the contrary was true.\u201d (citation\n\n modified)); Waterford, 2016 WL 1261135, at *10 (\u201cPlaintiffs do not allege facts demonstrating\n\n that [defendants] did not believe the [underwriting] statements were true at the time they were\n\n made.\u201d); Wachovia, 753 F. Supp. 2d at 354 (distinguishing cases where underwriting standards\n\n triggered Section 10(b) liability because, in those cases, defendants had internally approved the\n\n \u201cdebasement\u201d of applicable standards); Lululemon, 14 F. Supp. 3d at 571 (noting that, \u201cwithout\n\n contemporaneous falsity, there can be no fraud\u201d).        Plaintiffs allege that Kaufman\u2019s 1Q21\n\n Statements were false or misleading because \u201cKaufman knew but failed to disclose that [ABR]\n\n\n        18\n           Kaufman discussed loans in ABR\u2019s \u201cfloating rate book\u201d and, separately, \u201cloans in\n [ABR\u2019s] portfolio.\u201d (See id. \u00b6 330.) The Court thus reads Kaufman\u2019s statement about \u201cportfolio\u201d\n to be about non-floating rate loans.\n\n\n\n                                                 15\n\fCase 1:24-cv-05347-PKC-LKE          Document 37 Filed 03/31/26            Page 16 of 32 PageID #:\n                                            995\n\n\n\n had substantially deviated from its underwriting standards and guidelines.\u201d (Id. \u00b6 273.) But the\n\n closest Plaintiffs come to alleging contradicting facts known to Kaufman or Elenio:\n\n        1. \u201cKaufman would approve the bridge loans in like a minute of receiving the\n           proposed deal\u201d and that \u201cno questions [were] asked,\u201d (Am. Compl., Dkt. 26,\n           \u00b6\u00b6 122\u201323);\n\n        2. \u201c[T]here was a push to be aggressive\u201d by approving potential deals, which were\n           submitted to the credit committee on which Kaufman sat, (id. \u00b6 128);\n\n        3. Kaufman \u201cwould end up calling a lot of [struggling loan] owners to do loan\n           workouts,\u201d and \u201cmade it clear to all of [ABR\u2019s] employees that the deals needed\n           to be made current[, including by] pull[ing] from construction reserves, or other\n           reserves to bring [them] current,\u201d (id. \u00b6 155);\n\n        4. Every quarter, \u201cKaufman and Elenio would receive an Excel spreadsheet with\n           proposed ratings and valuations for each of the Structured loans,\u201d (id. \u00b6 185);\n\n        5. There was \u201cconsistent pressure from \u2018the top\u2019\u201d regarding valuations, and the\n           executive team, including Kaufman and Elenio, \u201cwould look for ways to\n           override . . . proposed ratings\u201d that \u201cthey did not like,\u201d (id. \u00b6 186); and\n\n        6. There were \u201cquarterly rating meetings\u201d at which, an FE believed, Kaufman and\n           Elenio \u201cwent through each\u201d of the individual loans\u2019 ratings and valuations and\n           asked the employees in attendance questions, (id. \u00b6 189).\n\n        The Court considers these allegations in \u201cthe context provided by [the totality of ABR\u2019s]\n\n disclosures\u201d and the \u201ctotal mix of information made available\u201d to investors, see Synchrony, 988\n\n F.3d at 170\u201371, which includes ABR\u2019s core market of \u201cborrowers whose options may be limited\n\n by conventional bank financing,\u201d (see Am. Compl., Dkt. 26, \u00b6 74 (listing the \u201cinvestment\n\n strategies\u201d that \u201cABR claimed to deploy\u201d \u201c[t]o achieve its stated business objectives\u201d)), and the\n\n discussed risks of the syndicator market, (see id. \u00b6 334 (excerpting Defendants\u2019 discussion of the\n\n syndicator market with investors).) Plaintiffs\u2019 allegations are consistent with a business model\n\n that \u201ccustomize[s] financing solutions,\u201d e.g. workouts, and \u201cact[s] quickly and decisively on\n\n proposals\u201d\u2014both of which are publicized elements of \u201cABR[\u2019s] investment strategies.\u201d (See id.\n\n\n\n\n                                                16\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26              Page 17 of 32 PageID #:\n                                             996\n\n\n\n \u00b6 74); see also Synchrony, 988 F.3d at 172 (\u201c[I]nvestors were given the warning signs and\n\n numerical metrics they needed to determine whether they agreed and whether that affected\n\n investing decisions.\u201d). There is no doubt ABR had high(er) risk loans in its portfolio, given the\n\n nature of its Structured Business, which originates loans on non-stabilized properties. (See id.\n\n \u00b6\u00b6 63\u201366.) But there are no allegations that this Structured Business\u2014and its concomitant risks\u2014\n\n did not exist before the influx of syndicators and their particularly risky loans. And the Amended\n\n Complaint is devoid of particularized allegations that ABR deviated from or abandoned the\n\n \u201cunderwriting standards and guidelines\u201d that it had always, or at least previously, used for\n\n Structured Business loans.       The allegations in the Amended Complaint, including those\n\n highlighted above, do not set forth specific information contradicting Kaufman\u2019s 1Q21 Statements,\n\n let alone specific information that \u201cDefendants were aware [of].\u201d See Woolgar, 477 F. Supp. 3d\n\n at 232 (collecting cases). Plaintiffs ultimately fail to provide \u201cfacts demonstrating that [Kaufman\n\n or Elenio] believed that [ABR\u2019s] underwriting practices were unsound or inappropriate,\u201d or\n\n \u201cknowingly failed to follow the underwriting practices that [ABR] actually disclosed.\u201d 19 Compare\n\n Waterford, 2016 WL 1261135, at *10 with zCap Equity Fund LLC v. LuxUrban Hotels Inc., 792\n\n F. Supp. 3d 407, 433\u20135 (S.D.N.Y. 2025), recon. denied, 2025 WL 2962772 (S.D.N.Y. Oct. 21,\n\n\n        19\n            Plaintiffs also allege widespread efforts to manipulate property appraisals, (see, e.g., Am.\n Compl., Dkt. 26, \u00b6\u00b6 175\u201377), and failures to verify financials, (see, e.g., id. \u00b6 127). Defendants\n contest this allegation, noting, inter alia, that Plaintiffs\u2019 own FE10 \u201cexplained that [ABR] \u2018worked\n with pretty much all national appraisers,\u2019\u201d (Mem. Supp. MTD, Dkt. 32-1, at 11 n.4 (quoting Am.\n Compl., Dkt. 26, \u00b6 138)), and Defendants argue that it \u201cis implausible that every national third-\n party appraiser would have \u2018put[] whatever number [ABR] wanted,\u2019\u201d as alleged by FE2, (id.\n (quoting Am. Compl., Dkt. 26, \u00b6 136)). But again, even accepting Plaintiffs\u2019 factual allegations\n as true, these do not \u201cdemonstrate[] the contemporaneous falsity of\u201d Kaufman\u2019s 1Q21 Statements.\n See Woolgar, 477 F. Supp. 3d at 231\u201332. The Court also notes the contradiction in Plaintiffs\u2019\n pleadings, where on the one hand they assert that ABR would \u201cwork[] deal[s]\u201d in whatever way\n necessary to get [them] done,\u201d (see Am. Compl., Dkt. 26, \u00b6 144), but on the other hand allege that\n ABR\u2019s Structured Business pipeline \u201cdried up\u201d by the fall of 2022 because \u201cthe deals just would\n not work,\u201d (see id. \u00b6 159).\n\n\n\n                                                   17\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 18 of 32 PageID #:\n                                             997\n\n\n\n 2025) (finding sufficiently pled misstatements where defendants had stated that rental properties\n\n were \u201cunder lease\u201d or \u201cadded\u201d to defendant\u2019s portfolio at a time when the transactions had not\n\n been consummated). 20\n\n        The cases that Plaintiffs rely on are distinguishable. Plaintiffs point to Ray for support that\n\n ABR\u2019s \u201creckless underwriting posed a critical threat to the company\u2019s \u2018agency take-out\u2019 model,\n\n such that the [excerpted] statements made by Kaufman to analysts and investors during earnings\n\n conference calls were materially misleading.\u201d         (Opp\u2019n, Dkt. 33, at 9 (citing Ray, 2024\n\n WL 4308130, at *11).) But the portion of Ray that Plaintiffs cite to discusses the defendants\u2019\n\n active lowering of their borrowing standards at a time when they publicly stated this credit scoring\n\n system was \u201cimproved\u201d or \u201cenhanced.\u201d See Ray, 2024 WL 4308130, at *11. Similarly, much of\n\n Plaintiffs\u2019 other case law involves instances where the defendants knew that the facts on the ground\n\n differed from their public statements. 21 Not so here, where Plaintiffs have failed to allege in\n\n\n        20\n            Plaintiffs also accuse Defendants of omitting the unsustainability of the \u201cpositive\n impact\u201d that rising interest rates were having on ABR\u2019s earnings. (See, e.g., Am Compl., Dkt. 26,\n \u00b6 419 (\u201c[B]ecause Elenio chose to speak about how rising interest rates were having a positive\n impact on [ABR\u2019s] earnings, he had a duty to disclose that [the] described positive impact was\n unsustainable; rising interest rates significantly increased the risk that the vast majority of ABR\u2019s\n floating-rate, structurally unsound loan portfolio would be unable to make their loan payments,\n negatively impacting [ABR\u2019s] net interest income.\u201d).) But this assumes that (1) rising interest\n rates were actually unsustainable for the \u201cvast majority\u201d of ABR\u2019s bridge loans, and (2) Elenio\n knew of the vulnerability of these loans to rate increases at the time he spoke. Plaintiffs have not\n adequately alleged either. And even if Elenio\u2019s positive predictions were wrong, \u201c[e]conomic\n prognostication, though faulty, does not, without more, amount to fraud.\u201d Synchrony, 988 F.3d\n at 172 (quoting Decker v. Massey-Ferguson, Ltd., 681 F.2d 111, 117 (2d Cir. 1982)).\n        21\n           See In re CIT Grp. Inc. Sec. Litig., No. 08-CV-6613 (BSJ), 2010 WL 2365846, at *2\u20133\n (S.D.N.Y. June 10, 2010) (holding that plaintiffs had sufficiently alleged false statements where\n defendants \u201cwere aware of and approved\u201d official changes lowering the company\u2019s lending\n standards but represented, inter alia, that the company had \u201cconservative\u201d lending standards and\n had \u201ctightened\u201d underwriting requirements); In re Ambac Fin. Grp., Inc. Sec. Litig., 693 F. Supp.\n 2d 241, 270\u201371 (S.D.N.Y. 2010) (holding that statements characterizing management practices as\n \u201cadequate,\u201d \u201cconservative,\u201d or similar can implicate securities laws if company \u201cintentionally or\n recklessly omits certain facts contradicting these representations\u201d (quoting Shapiro v. UJB Fin.\n Corp., 964 F.2d 272, 282 (3d Cir. 1992), cert. denied, 506 U.S. 934 (1992))); Freudenberg v.\n\n\n                                                  18\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 19 of 32 PageID #:\n                                             998\n\n\n\n sufficiently particularized fashion facts known to Kaufman or Elenio when they made their\n\n statements that would have made these statements false.\n\n        Plaintiffs\u2019 other case law, which discuss claims brought pursuant to Sections 11, 12, or 15\n\n of the Securities Act, 22 instead of Section 10(b) of the Exchange Act, are thus also distinguishable.\n\n As an initial matter, the pleading standards are different for Section 10(b) claims compared to\n\n Securities Act Sections 11 and 12 claims. Unless explicitly alleging fraud, claims brought pursuant\n\n to Section 11 or 12 are assessed under the more lenient Rule 8 standard rather than Rule 9\u2019s\n\n heightened standard. See Fait v. Regions Fin. Corp., 655 F.3d 105, 113 (2d Cir. 2011) (\u201cIn contrast\n\n to claims brought pursuant to [Section 10(b)], claims under [S]ections 11 and 12 do not require\n\n allegations of scienter, reliance, or loss causation.\u201d), abrogated on other grounds by Omnicare,\n\n Inc. v. Laborers Dist. Council Const. Indus. Pension Fund, 575 U.S. 175 (2015)); Arqit, 774 F.\n\n Supp. 3d at 533\u201334 (applying Rule 8\u2019s requirement that a \u201cpleading must contain \u2018short and plain\n\n statement\u2019 of claim showing pleader\u2019s entitlement to relief\u201d to claims under Sections 11\n\n and 12(a)(2) when plaintiffs expressly disclaimed allegations of fraud).\n\n\n\n E*Trade Fin. Corp., 712 F. Supp. 2d 171, 190 (S.D.N.Y. 2010) (holding that misstatements were\n actionable where the statements were \u201cbelied by conditions internally known by defendants\u201d);\n Novak v. Kasaks, 216 F.3d 300, 315 (2d Cir. 2000) (holding that defendants\u2019 statements were\n actionable where \u201cdefendants stated that the inventory situation was \u2018in good shape\u2019 or \u2018under\n control\u2019 while they allegedly knew that the contrary was true\u201d); Synchrony, 988 F.3d at 169\n (holding that defendants had fraudulently represented that no retail partner had provided any\n negative commentary on the company\u2019s underwriting practices \u201cwhile they allegedly knew that\n the contrary was true\u201d (quoting Novak, 216 F.3d at 315)).\n        22\n             \u201cSections 11, 12(a)(2), and 15 of the Securities Act impose liability on certain\n participants in a registered securities offering when the publicly filed documents used during the\n offering contain material misstatements or omissions.\u201d In re Morgan Stanley Info. Fund Sec.\n Litig., 592 F.3d 347, 358 (2d Cir. 2010). \u201cSection 11 applies to registration statements, and\n section 12(a)(2) applies to prospectuses and oral communications.\u201d Id. (citing 15 U.S.C.\n \u00a7\u00a7 77k(a), 77l(a)(2)). \u201cSection 15, in turn, creates liability for individuals or entities that\n \u2018control[ ] any person liable\u2019 under section 11 or 12.\u201d Id. (citing 15 U.S.C. \u00a7 77o).\n\n\n\n                                                  19\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 20 of 32 PageID #:\n                                             999\n\n\n\n        Unlike cases involving Section 10(b) claims, the courts in the cases cited by Plaintiff\n\n assessed Sections 11 and 12 claims against a \u201cfair inference\u201d instead of \u201cparticularity\u201d standard.\n\n See N.J. Carpenters Health Fund v. Residential Capital, LLC, No. 08-CV-8781 (HB), 2010\n\n WL 1257528, at *6 (S.D.N.Y. Mar. 31, 2010) (finding allegations of \u201caggressive loan\n\n underwriting practices\u201d and \u201cthe loan pools\u2019 near-total credit rating collapse\u201d \u201csufficient to create\n\n a fair inference\u201d of actionable omission under Sections 11 or 12); In re IndyMac Mortg.-Backed\n\n Sec. Litig., 718 F. Supp. 2d 495, 510 (S.D.N.Y. 2010) (holding that plaintiff had adequately pled\n\n Section 11 misstatement regarding underwriting standards where there was \u201csufficient nexus\n\n between the alleged underwriting standard abandonment and the [defaulting] loans\u201d).             The\n\n inferences that sufficed in Carpenters and IndyMac fall short of the particularity requirements for\n\n claims, like Plaintiffs\u2019, alleged pursuant to Section 10(b).\n\n        Thus, Plaintiffs\u2019 underwriting-based allegations fail to adequately plead actionable\n\n misstatements. 23\n\n                2.      Statements Regarding Internal Controls Related to Risk\n\n        Second, Plaintiffs allege that Defendants\u2019 statements regarding ABR\u2019s internal risk\n\n controls were false and misleading. (See Am. Compl., Dkt. 26, \u00b6\u00b6 259\u201361 (copying two paragraphs\n\n\n\n        23\n            Defendants also point out that their public filings included \u201cthree pages of detailed risk\n factors concerning [ABR\u2019s] model, including the risk of failed deliveries (i.e. agency refuses to\n close a loan).\u201d (Reply, Dkt. 34, at 5.) Such risk disclosures have been found to undermine a claim\n of misrepresentation or misleading statements. See id. at 170\u201371 (finding not misleading statement\n that underwriting practices were consistent, despite loosening standards, where accompanied by\n disclosures); In re Hut 8 Corp. Sec. Litig., No. 24-CV-0904 (VM), 2025 WL 2636150, at *12\n (S.D.N.Y. Sep. 12, 2025) (\u201c[F]orward-looking statements accompanied by risk-disclosing\n language are generally not misleading or material.\u201d). Plaintiffs counter that the risks disclosed had\n already occurred, and that \u201cto caution that it is only possible for the unfavorable events to happen\n when they have already occurred is deceit.\u201d (Opp\u2019n, Dkt. 33, at 12 (quoting In re Van der Moolen\n Holding N.V. Sec. Litig., 405 F. Supp. 2d 388, 400 (S.D.N.Y. 2005))). The Court declines to opine\n on this, having found that Plaintiffs have failed to adequately allege contemporary falsity.\n\n\n                                                  20\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 21 of 32 PageID #:\n                                            1000\n\n\n\n from ABR\u2019s 1Q21 10-Q, 24 as well as March 2021 LTV data, that Plaintiffs allege are \u201cfalse and\n\n misleading\u201d).) This category of statements overlaps with the previous category, as both are alleged\n\n to be misleading because of the quality of the underlying loans. However, while the previous\n\n category concerned statements regarding how the loans were underwritten, this category concerns\n\n statements regarding how the loans are performing. According to Plaintiffs, \u201cDefendants knew\n\n but did not disclose the material weaknesses in [ABR\u2019s] internal controls concerning its risk ratings\n\n and LTV ratios, or at minimum, misrepresented ABR\u2019s performance monitoring process.\u201d (Id.\n\n \u00b6 262.) Plaintiffs also allege that these \u201cmaterial[ly] weak[]\u201d internal controls enabled ABR to\n\n \u201ckeep its risk of loss from surfacing throughout the Class Period.\u201d (See id. \u00b6 461.) As best the\n\n Court can determine, 25 Plaintiffs allege these statements\u2019 falsity because Defendants improperly\n\n rated the risk of their loans, based on unsound appraisals and therefore unsupported LTVs, and\n\n then obscured these loans\u2019 spiraling underperformance as market conditions worsened. (See id.\n\n \u00b6\u00b6 186\u2013213.)\n\n        ABR\u2019s statements about their internal controls do not support a Section 10(b) action for\n\n two reasons: (1) Plaintiffs fail to show Defendants\u2019 statements were false or misleading; and\n\n (2) Plaintiffs have not shown that Kaufman or Elenio had any reason to know that their statements\n\n were false or misleading.\n\n\n        24\n           10-Q forms are used for quarterly reports submitted to the SEC. SEC, Form 10-Q\n General Instructions, at 1, https://www.sec.gov/about/forms/form10-q.pdf (last accessed Mar. 10,\n 2026).\n        25\n            Plaintiffs quote two entire paragraphs, (see id. \u00b6 259), without identifying exactly what\n portion Plaintiffs contend to be false and misleading\u2014or whether Plaintiffs allege the entire two\n paragraphs to be false and misleading. Instead, Plaintiffs only offer stock arguments repeated\n across their pleadings. The Court declines to scour the 224-page Amended Complaint for specific\n details regarding falsity. See Krause v. Kelahan, 161 F.4th 66, 87 n.17 (2d Cir. 2025) (\u201cCourts are\n not obligated to invent arguments that parties do not make or to scour the record for support for\n the parties\u2019 claims.\u201d).\n\n\n\n                                                  21\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 22 of 32 PageID #:\n                                            1001\n\n\n\n                        a)      Falsity Not Established\n\n        Plaintiffs fail to adequately \u201cdescribe the internal controls that [the company] had in place[\n\n or] explain how or why they were deficient.\u201d See Arora v. HDFC Bank Ltd., 671 F. Supp. 3d 305,\n\n 315 (E.D.N.Y. 2023) (emphasis added); see also Rex & Roberta Ling Living Tr. u/a Dec. 6, 1990\n\n v. B Commc\u2019ns Ltd., 346 F. Supp. 3d 389, 405 (S.D.N.Y. 2018) (dismissing allegations regarding\n\n misleading nature of sufficiency of internal control statements where plaintiffs failed to \u201cdescribe\n\n [defendant\u2019s] system of internal controls, let alone to identify why that system was inadequate\u201d);\n\n In re Banco Bradesco S.A. Sec. Litig., 277 F. Supp. 3d 600, 648 (S.D.N.Y. 2017) (\u201cPlaintiff alleges\n\n nothing about the design of the [c]ompany\u2019s [internal controls] structure or processes at all, nor\n\n does [p]laintiff allege anything about the management or execution of those processes.\u201d). Instead,\n\n Plaintiffs state in conclusory fashion that ABR\u2019s \u201cpolicies and practices . . . were supposed to\n\n ensure that the assigned ratings and reported LTV were correct and accurate, [such that ABR]\n\n could adequately determine its concentration of risk,\u201d and that \u201cthose very policies and practices\n\n were ripe for manipulation.\u201d (Am. Compl., Dkt. 26, \u00b6 192.) But Plaintiffs never actually identify\n\n the policies and practices that Defendants allegedly manipulated.\n\n        At best, Plaintiffs charge Defendants with failing to strictly adhere to Defendants\u2019 internal\n\n \u201calgorithm.\u201d (See, e.g., id. \u00b6 187.) But according to Plaintiffs\u2019 own allegations, Defendants\u2019\n\n internal risk rating system appears more holistic than a mere algorithm: \u201cABR\u2019s purported internal\n\n controls required that \u2018[a]ll portfolio assets are subject to, at a minimum, a thorough quarterly\n\n financial evaluation in which historical operating performance and forward-looking projections\n\n are reviewed . . . [,]\u2019 and [ABR] would assign ratings based on DSCRs, LTVs, market factors,\n\n sponsor strength, and other items.\u201d (Id. \u00b6 173 (first alteration in original) (emphasis added) (citing\n\n ABR\u2019s \u201cSEC filings\u201d).) Plaintiffs provide no basis for the Court to find that the changes in ABR\u2019s\n\n\n\n\n                                                  22\n\fCase 1:24-cv-05347-PKC-LKE             Document 37 Filed 03/31/26              Page 23 of 32 PageID #:\n                                              1002\n\n\n\n loan ratings detailed in the Amended Complaint are not merely part of Defendants\u2019 typical\n\n \u201cquarterly financial evaluation.\u201d (See id.)\n\n         In fact, the Amended Complaint itself and the record show that an independent audit of\n\n ABR\u2019s internal controls determined that they were effective.             As alleged in the Amended\n\n Complaint, at \u201crisk rating meetings, . . . FE7 would walk through [ABR\u2019s] loan ratings with its\n\n internal auditors, asset management leadership within accounting, third-party auditors, [and]\n\n Elenio.\u201d     (Id. \u00b6 189.)    In ABR\u2019s 2021 10-K, its third-party audit \u201cincluded obtaining an\n\n understanding of internal control over financial reporting, assessing the risk that a material\n\n weakness exists, [and] testing and evaluating the design and operating effectiveness of internal\n\n control based on the assessed risk.\u201d (ABR 2021 Form 10-K, Dkt. 32-4, at ECF 26 38.) The audit\n\n concluded that ABR \u201cmaintained, in all material respects, effective internal control over financial\n\n reporting.\u201d (Id.) ABR\u2019s 2022 10-K reached the same conclusion. (See ABR 2022 Form 10-K,\n\n Dkt. 32-9, at ECF 37.) Thus, Plaintiffs have failed to allege sufficient facts showing that there\n\n were deficiencies in ABR\u2019s internal risk controls and that any statements to the contrary were false.\n\n                         b)      Knowledge of Falsity Not Established\n\n         Here too, assuming the controls were in fact insufficient, Plaintiffs fail to plead \u201ccontrary\n\n facts that were available to Defendants at the time of the alleged misstatements.\u201d See Wachovia,\n\n 753 F. Supp. 2d at 354; Waterford, 2016 WL 1261135, at *11 (\u201c[T]here are no facts pleaded to\n\n support an inference that the [c]ompany knew, at time of the earlier disclosures . . . , that its internal\n\n controls were insufficient.\u201d); see also Woolgar, 477 F. Supp. 3d at 230 (dismissing alleged\n\n misstatements regarding effective internal controls where the complaint lacked \u201cfactual allegations\n\n\n\n         26\n          Citations to \u201cECF\u201d refer to the pagination generated by the Court\u2019s CM/ECF docketing\n system and not the document\u2019s internal pagination.\n\n\n\n                                                    23\n\fCase 1:24-cv-05347-PKC-LKE          Document 37 Filed 03/31/26           Page 24 of 32 PageID #:\n                                           1003\n\n\n\n supporting the inference that [d]efendants knew about any material weakness in the [c]ompany\u2019s\n\n internal controls prior to this disclosure or, more importantly, during the [c]lass [p]eriod\u201d).\n\n Plaintiffs fail to identify any FE with actual knowledge of what Defendants knew or believed at\n\n the time they made the challenged statements. 27 At best, FE7 was a Director of Accounting who\n\n \u201creported to Defendant Elenio,\u201d (Am. Compl., Dkt. 26, \u00b6 44) but FE7 \u201cdid not attend the quarterly\n\n rating[s] meetings with the Structured loan teams\u201d that Kaufman and Elenio attended, (id. \u00b6 189),\n\n and thus cannot speak to what was actually discussed.\n\n        Plaintiffs\u2019 attempt to retroactively infer knowledge through disclosures and statements\n\n made after the statements at issue, (see id. \u00b6\u00b6 206\u201311 (alleging \u201cDefendants knew of the scope of\n\n the problems associated with the failures of [ABR\u2019s] controls for reporting non-performing loans\u201d\n\n based on disclosures made subsequent to a short seller report); see also Opp\u2019n, Dkt. 33, at 15\n\n (\u201c[ABR] only came clean after Viceroy started reporting on its portfolio.\u201d)), rests on a \u201clogical\n\n fallacy,\u201d see Argo, 2024 WL 5089970, at *7 (\u201c[T]he fact that defendants acted to tighten\n\n underwriting guidelines and exposures going forward does not show that their reserves for past\n\n underwritten policies were inadequate, let alone that they knew or believed they were.\u201d). Contrary\n\n to Plaintiffs\u2019 argument, \u201cwhat drives the element of falsity\u201d is not \u201cthe divergence between\n\n Defendants\u2019 public statements and the true state of affairs existing at the time,\u201d (see Opp\u2019n,\n\n\n        27\n             In their Opposition, Plaintiffs argue that \u201cKaufman knew about the appraisal\n manipulation because he was present during calls when it was discussed,\u201d and that \u201cmanagement\n would override the ratings during the quarterly ratings meetings attended by Kaufman and Elenio.\u201d\n (Opp\u2019n, Dkt. 33, at 14.) But Plaintiffs\u2019 cites to their Amended Complaint do not support the\n inference Plaintiffs seek to draw regarding Defendants\u2019 actual knowledge of alleged manipulations\n and failed controls. (See Am. Compl., Dkt. 23, \u00b6\u00b6 179\u201389.) At most, FE12 alleges that Kaufman\n \u201cdiscuss[ed] FE12\u2019s asset portfolio,\u201d including \u201cshar[ing] thoughts on what direction [ABR]\n would want to go in.\u201d (Id. \u00b6 181.) The Amended Complaint is notably silent on whether Kaufman\n discussed or knew of the allegedly manipulated appraisals, despite the Opposition\u2019s\n representations. That Kaufman allegedly \u201coverrode\u201d loan proposals, (see id. \u00b6 186), does not\n establish that appraisals were manipulated.\n\n\n\n                                                24\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 25 of 32 PageID #:\n                                            1004\n\n\n\n Dkt. 33, at 16), but rather the divergence between Defendants\u2019 public statements and the facts\n\n available to Defendants at the time, see Woolgar, 477 F. Supp. 3d at 230. Finally, as discussed\n\n above, the independent audit of ABR\u2019s internal controls showed them to be effective, a fact that\n\n \u201cundermine[s] any inference that Defendants must have been aware of . . . a weakness [in their\n\n internal controls] during the same time period.\u201d Woolgar, 477 F. Supp. 3d at 230 (noting that\n\n defendants\u2019 \u201cindependent auditor reviewed the effectiveness of its internal controls and concluded\n\n that the [c]ompany \u2018maintained effective internal control over financial reporting\u2019\u201d).\n\n        Thus, Plaintiffs\u2019 internal controls-based allegations fail to adequately plead actionable\n\n misstatements.\n\n                  3.    Statements Based on Violations of Generally Accepted Accounting\n                        Principles\n\n        The third category of alleged misstatements consists of financial statements made in ABR\u2019s\n\n public disclosures, which in turn are based on ABR\u2019s allowances for credit losses. (See, e.g., Am.\n\n Compl., Dkt. 26, \u00b6\u00b6 257\u201368.) Allowances for credit losses, or loss reserves, are estimated based\n\n on a current expected credit loss methodology (\u201cCECL\u201d), 28 which incorporates assumptions\n\n\n\n        28\n            The CECL model, introduced by the Financial Accounting Standards Board (\u201cFASB\u201d)\n in 2016, \u201cis an estimate of the expected credit losses on financial assets . . . measured using\n relevant information about past events, including historical credit loss experience on financial\n assets with similar risk characteristics, current conditions, and reasonable and supportable\n forecasts that affect the collectability of the remaining cash flows over the contractual term of the\n financial assets.\u201d Federal Reserve, Allowance For Loan And Lease Losses\u2014Frequently Asked\n Questions        on      the      Current        Expected      Credit      Losses      Methodology,\n https://www.federalreserve.gov/frrs/guidance/frequently-asked-questions-on-the-current-\n expected-credit-losses-methodology.htm [https://perma.cc/XHJ6-W7NX] (last accessed Mar. 10,\n 2026); (see Am. Compl., Dkt. 26, \u00b6 217 (explaining similar)). The CECL was developed to enable\n companies to \u201crecord credit losses that are expected, but that do not yet meet the \u2018probable\u2019\n threshold.\u201d Federal Deposit Insurance Corporation, Frequently Asked Questions on the New\n Accounting Standard on Financial Instruments \u2013 Credit Losses, at 5 (Apr. 3, 2019)\n https://www.fdic.gov/news/financial-institution-letters/2019/fil19020a.pdf\n [https://perma.cc/4JYH-QKUC].\n\n\n\n                                                  25\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 26 of 32 PageID #:\n                                            1005\n\n\n\n regarding future uncollectable interest and principal. (See Am. Compl., Dkt. 26, \u00b6\u00b6 173, 217.)\n\n Here, Plaintiffs allege both that ABR failed to increase its allowance for credit losses to account\n\n for \u201cstructurally unsound high-risk bridge loans . . . that could be expected to default,\u201d (see id.\n\n \u00b6 219), and \u201cmanipulated ABR\u2019s CECL allowance by not recording a sufficient or reasonable\n\n increase of those reserves\u201d to account for these unsound loans, 29 (see id. \u00b6 267). According to\n\n Plaintiffs, ABR\u2019s artificially depressed credit loss allowance led to an artificially inflated net\n\n income, 30 which violated current Generally Accepted Accounting Principles (\u201cGAAP\u201d), 31 tainted\n\n net income-dependent financials, and caused misstatements regarding (1) loss recognition, 32\n\n (2) reported distributable earnings, 33 and (3) ABR\u2019s adjusted book value. (See, e.g., id. \u00b6\u00b6 214,\n\n 219, 257, 266\u201368.)\n\n\n\n        29\n           Once again, Plaintiffs do not specify these \u201cunsound loans,\u201d which could very well be\n the bridge loans that form the crux of ABR\u2019s Structured Business. (See Am. Compl., Dkt. 26,\n \u00b6 142 (discussing \u201cborrowers [who] need . . . non-traditional sources of money\u201d).)\n        30\n            ABR\u2019s net income was required to include \u201cthe amount necessary to adjust the allowance\n for credit losses and liabilities\u201d to account for expected credit losses. (See id. \u00b6 218.)\n        31\n           Plaintiffs explain that \u201cGAAP is recognized by the accounting profession as conventions,\n rules and procedures necessary to define accounting practices at a particular time,\u201d that the SEC\n has the authority to promulgate GAAP for public companies, and that \u201cfinancial statements filed\n with the SEC which are not presented in accordance with GAAP [are] presumed misleading.\u201d (Id.\n \u00b6 215 (citing 17 C.F.R. \u00a7 210.4-01(a)(1)).)\n        32\n           Plaintiffs appear to allege that Defendants\u2019 recognition of losses in the form of disclosed\n \u201cdelinquencies or non-performance\u201d was also fraudulent. (See id. \u00b6 467.) But Plaintiffs do not\n identify any specific loans that ABR should have recognized as \u201cactual\u201d losses but did not, relying\n instead on highly generalized \u201cshifts in economic and market conditions.\u201d (See id. \u00b6 467; see also\n id. \u00b6\u00b6 152\u201362 (alluding to properties \u201cbehind schedule,\u201d \u201cstruggling a lot,\u201d or \u201cdistressed,\u201d without\n identifying any specific property that should have been recognized as delinquent or non-\n performing).) Nor do they identify any misstatements regarding delinquent loans. Instead, the\n misstatements identified are about the risks inherent in estimating \u201cloan loss reserves,\u201d which ABR\n clearly discloses. (See id. \u00b6 466.)\n        33\n         Defendants\u2019 reported distributable earnings are defined as \u201cnet income (loss) attributable\n to common stockholders computed in accordance with GAAP, adjusted for accounting items such\n\n\n                                                  26\n\fCase 1:24-cv-05347-PKC-LKE            Document 37 Filed 03/31/26               Page 27 of 32 PageID #:\n                                             1006\n\n\n\n        Plaintiffs cannot show a Section 10(b) violation based on ABR\u2019s allegedly false or\n\n misleading statements that were, in turn, based on loss reserves estimates or calculations. \u201c[L]oss\n\n reserves are statements of opinion.\u201d See Woolgar, 477 F. Supp. 3d at 222\u201323 (collecting cases);\n\n Burr v. Equity Bancshares, Inc., No. 19-CV-4346 (AJN), 2020 WL 6063558, at *5 (S.D.N.Y.\n\n Oct. 14, 2020) (\u201c[L]oan loss reserves reflect management\u2019s opinion or judgment about what, if\n\n any, portion of amounts due on the loans ultimately might not be collectible.\u201d (quoting Fait, 655\n\n F.3d at 113 34); FASB, Accounting Standards Update, Financial Instruments\u2014Credit Losses, at 2\n\n (June 2016) (\u201cAn entity must use judgment in determining the relevant information and estimation\n\n methods that are appropriate in its circumstances.\u201d).          As such, these determinations \u201care\n\n \u2018inherently subjective\u2019 rather than \u2018matter[s] of objective fact\u2019 because they \u2018depend[ ] on a variety\n\n of predictable and unpredictable circumstances\u2019 and thus \u2018reflect management\u2019s opinion or\n\n judgment.\u2019\u201d See Argo, 2024 WL 5089970, at *6 (alterations in original) (quoting Fait, 655 F.3d\n\n at 113); see also MetLife, 129 F. Supp. 3d at 68 (S.D.N.Y. 2015) (\u201cWhile [reserve] estimates\n\n involve some factual inputs, they necessarily require judgment and thus are statements of opinion\n\n or belief, not of fact.\u201d) (internal citations and quotation marks omitted).\n\n        Plaintiffs have failed to demonstrate that ABR\u2019s credit loss allowance was subjectively or\n\n objectively false, as is required for an opinion to be actionable. See Tongue v. Sanofi, 816\n\n\n\n as . . . CECL provisions for credit losses . . . ,\u201d and are thus linked to allowances for credit losses.\n (Am. Compl., Dkt. 26, \u00b6 257 (alterations in original) (quoting ABR\u2019s 1Q21 10-Q).)\n        34\n           \u201cThough Fait involved claims under Sections 11 and 12 of the [Securities Act], the same\n opinion analysis applies under Sections 10(b) and 20(a) of the [Exchange Act], as these claims all\n share a material misstatement or omission element.\u201d City of Omaha, Neb. Civilian Emps.\u2019 Ret.\n Sys. v. CBS Corp., 679 F.3d 64, 67\u201368 (2d Cir. 2012) (first citing Fait, 655 F.3d at 109; and then\n citing 15 U.S.C. \u00a7\u00a7 77k, 77l). Section 10(b) and 20(a) of the Exchange Act must still be pleaded\n with a heightened particularity compared to non-fraud Sections 11 and 12 claims. See Arqit, 774\n F. Supp. 3d at 532\u201333 (discussing different pleading standards).\n\n\n\n                                                   27\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 28 of 32 PageID #:\n                                            1007\n\n\n\n F.3d 199, 210 (2d Cir. 2016) (\u201cLiability for making a false statement of opinion may lie if either\n\n \u2018the speaker did not hold the belief [he] professed\u2019 [(subjective falsity]) or \u2018the supporting fact[s]\n\n [he] supplied were untrue [(objective falsity)].\u201d (quoting Omnicare, 575 U.S. at 185\u201388)).\n\n Plaintiffs rely on various FEs to plead that Kaufman and Elenio knew the allowance to be\n\n insufficient.   (See Am. Compl., Dkt. 26, \u00b6 258 (\u201cDefendants manipulated ABR\u2019s CECL\n\n allowance . . . , [as] corroborated by the accounts of FE1, FE2, FE3, FE4, FE5, FE8, FE9, FE10,\n\n and FE11.\u201d) But \u201cthe majority of the [FEs] . . . have nothing to do with the adequacy of [the\n\n alleged] defect reserves.\u201d See Argo, 2024 WL 5089970, at *7. Compare id. (noting FEs \u201chad no\n\n actual connection to or engagement with [the company\u2019s] reserves, with those employees working\n\n in underwriting\u201d) with (Am. Compl., Dkt. 26, \u00b6\u00b6 32\u201355 (describing FEs\u2019 relevant duties as\n\n underwriters (FE1, FE2, FE4, and FE9) or loan managers or analysts (FE3, FE5, FE8, FE10, and\n\n FE11).) \u201cMoreover, even to the extent [D]efendants allegedly were attempting to minimize\n\n reserves, such allegations are not inconsistent with a belief that existing reserves were sufficient.\u201d\n\n Argo, 2024 WL 5089970, at *7. Ultimately, the Amended Complaint \u201cis devoid of allegations\n\n demonstrating\u2014or even plausibly suggesting\u2014that Defendants did not honestly believe their\n\n opinions regarding the strength or adequacy of [ABR\u2019s] loss reserves, or that they believed those\n\n estimates to be false.\u201d See Woolgar, 477 F. Supp. 3d at 224\u201325 (collecting cases). 35\n\n         Plaintiffs also do not successfully argue objective falsity. Loan loss reserves eschew\n\n objective standards. See In re Deutsche Bank AG Sec. Litig., No. 09-CV-1714 (DAB), 2016\n\n\n\n         35\n            In 2022\u201324 financial quarters, Plaintiffs also suggest that Defendants failed to disclose\n loss risk due to \u201cshifts in economic and market conditions.\u201d (See, e.g., Am. Compl., Dkt. 26, \u00b6 483\n (\u201c[S]hifts in economic and market conditions . . . result[ed] in delinquencies or non-performance\n and significantly increase[d] ABR\u2019s risk of loss.\u201d).) But Plaintiffs fail to identify exactly what was\n false in, or omitted from, the relevant GAAP and loan loss statements because of these economic\n shifts. (See id. \u00b6\u00b6 480\u201381.)\n\n\n\n                                                  28\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 29 of 32 PageID #:\n                                            1008\n\n\n\n WL 4083429, at *16 (S.D.N.Y. July 25, 2016) (noting that there is \u201cno objective standard for\n\n measuring . . . loan loss reserves, and thus any estimate would be inherently subjective and reflect\n\n management\u2019s determination of the \u2018fair value\u2019 of the assets or a judgment or opinion regarding\n\n which loans may not be collectible\u201d (citing Fait)); see also Argo, 2024 WL 5089970, at *8\n\n (recognizing the \u201c\u2018extremely conjectural\u2019 nature of estimating loss reserves,\u201d which are \u201c\u2018set aside\n\n to cover losses for which claims have not been reported but must be estimated,\u2019 and require\n\n \u2018underwrit[ing] casualty risks with long discovery or reporting delays\u2019\u201d (alteration in original)\n\n (first quoting Stephens v. Nat\u2019l Distillers & Chem. Corp., 6 F.3d 63, 65 (2d Cir. 1993); and then\n\n quoting Delta Holdings, Inc. v. Nat\u2019l Distillers & Chem. Corp., 945 F.2d 1226, 1229 (2d Cir.\n\n 1991))); (ABR 2023 Form 10-K, Dkt. 32-3, at ECF 31\u201332 (including \u201callowance for credit loss\u201d\n\n as a \u201ccritical audit matter\u201d for ABR\u2019s independent auditor, because it \u201cinvolved a high degree of\n\n subjectivity due to the significant uncertainty associated with the assumptions used in the\n\n estimation\u201d)). And indeed, Plaintiffs here cannot seem to \u201cidentify \u2018an objective standard for\n\n setting loan loss reserves.\u2019\u201d In re MF Glob. Holdings Ltd. Sec. Litig., 982 F. Supp. 2d 277, 312\n\n (S.D.N.Y. 2013) (quoting Fait, 655 F.3d at 113). Instead, Plaintiffs merely argue that Defendants\n\n failed to \u201crecord[] a sufficient or reasonable increase of [the loss] reserves.\u201d (Am. Compl., Dkt. 26,\n\n \u00b6 258 (emphasis added).) Such allegations \u201cmimic the typical type of \u2018fraud by hindsight\u2019 theory\n\n that courts have been unwilling to entertain.\u201d Woolgar, 477 F. Supp. 3d at 225\u201326 (citation\n\n modified) (collecting cases).\n\n        This Court declines to entertain them, as well, and holds that Plaintiffs\u2019 GAAP-based\n\n allegations fail to adequately plead actionable misstatements.\n\n                                           *       *       *\n\n\n\n\n                                                  29\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 30 of 32 PageID #:\n                                            1009\n\n\n\n        Because Plaintiffs have failed to adequately allege material misstatements or omissions,\n\n the Court need not assess the other elements of a Section 10(b) claim. See Saskatchewan, 718 F.\n\n Supp. 3d at 390 (\u201cBecause the failure to establish any element is fatal to a section 10(b)/Rule 10b-5\n\n claim, the Court need not address [d]efendants\u2019 other arguments for the dismissal of\n\n the . . . Exchange Act claims.\u201d (citations and internal quotation marks omitted)); Lipow v. Net1\n\n UEPS Techs., Inc., 131 F. Supp. 3d 144, 172 (S.D.N.Y. 2015) (holding that plaintiff\u2019s failure to\n\n adequately plead either scienter or a misstatement or omission is dispositive, such that the court\n\n need not reach the remaining Section 10(b) factors).\n\n        C.      Scheme Liability\n\n        Plaintiffs also allege that \u201cDefendants engaged in a fraudulent scheme to artificially inflate\n\n the Company\u2019s loan volume and reported earnings by abandoning or, at minimum, recklessly\n\n disregarding, ABR\u2019s underwriting standards to complete high-risk bridge loans borrowed most\n\n often by syndication groups managed by sponsors who otherwise would not qualify for such loans\n\n in the conventional market because of poor creditworthiness, low debt service coverage ratios,\n\n high [LTV] ratios, and/or other risk factors.\u201d (Am. Compl., Dkt. 26, \u00b6 10.) Scheme liability under\n\n Rule 10b-5 must be premised on \u201cdeceptive conduct apart from misstatements and omissions.\u201d In\n\n re AT&T DirecTV Now Sec. Litig., 480 F. Supp. 3d 507, 522 (S.D.N.Y. 2020) (citing 17 C.F.R.\n\n \u00a7 240.10b-5(a), (c)). As Defendants point out, Plaintiffs fail to allege any scheme-specific conduct\n\n \u201capart from misstatements and omissions.\u201d (Mem. Supp. MTD, Dkt. 32-1, at 24 (citing AT&T\n\n DirecTV Now, 480 F. Supp. 3d at 522).) And, short of a few references to a \u201cscheme\u201d in Plaintiffs\u2019\n\n Opposition that echo their haphazard references in the Amended Complaint, Plaintiffs fail to\n\n contest Defendants\u2019 argument on this point and have thus waived any scheme liability claim. See\n\n Laface v. E. Suffolk BOCES, No. 18-CV-1314 (ADS) (AKT), 2019 WL 1959489, at *8 (E.D.N.Y.\n\n\n\n\n                                                  30\n\fCase 1:24-cv-05347-PKC-LKE           Document 37 Filed 03/31/26             Page 31 of 32 PageID #:\n                                            1010\n\n\n\n May 2, 2019) (\u201cIn the Second Circuit, \u2018[a] plaintiff\u2019s failure to respond to contentions raised in a\n\n motion to dismiss claims constitute[s] an abandonment of those claims.\u2019\u201d (collecting cases)).\n\n II.    Section 20(a) of the Exchange Act\n\n        Section 20(a) claims rise and fall with Section 10(b) claims. See Gluck v. Hecla Mining\n\n Co., No. 19-CV-4883 (ALC), 2024 WL 4362730, at *9 (S.D.N.Y. Sep. 30, 2024) (\u201cAs Plaintiffs\n\n have failed to adequately allege their [Section] 10(b) claim, the claims under [Section] 20(a) also\n\n fail as a matter of law.\u201d (citing SEC v. First Jersey Sec., Inc., 101 F.3d 1450, 1472 (2d Cir. 1996),\n\n cert. denied, 522 U.S. 812 (1997))), aff\u2019d, No. 24-2947-CV, 2025 WL 1983204 (2d Cir. July 17,\n\n 2025) (summary order); Gimpel, 156 F.4th at 136 (\u201cPlaintiffs also bring Section 20(a) control-\n\n person liability claims against the [i]ndividual [d]efendants, which require an adequately pleaded\n\n Rule 10b-5(b) claim as a predicate.\u201d (citing ECA, 553 F.3d at 207)); Equity Bancshares, 2020\n\n WL 6063558, at *8 (similar). Because they have failed to adequately plead a Section 10(b) claim,\n\n Plaintiffs also fail to plead a Section 20(a) claim against Kaufman and Elenio.\n\n\n\n\n                                                  31\n\fCase 1:24-cv-05347-PKC-LKE          Document 37 Filed 03/31/26             Page 32 of 32 PageID #:\n                                           1011\n\n\n\n                                          CONCLUSION\n\n        For the reasons set forth herein, Defendants\u2019 Motion to Dismiss is granted in its entirety,\n\n and Plaintiffs\u2019 Amended Complaint is dismissed. Plaintiffs are granted leave to amend their\n\n Amended Complaint within thirty (30) days of this Order to plead, with the requisite specificity,\n\n the falsity of the alleged misstatements and Defendants\u2019 knowledge of that falsity. If Plaintiffs\n\n choose to amend their Amended Complaint, Plaintiffs shall also submit a redline demonstrating\n\n changes between the current complaint and the new complaint. Absent amendment within 30\n\n days, the Clerk of Court will be directed to enter judgment and close this case.\n\n                                                      SO ORDERED.\n\n\n                                                      /s/ Pamela K. Chen\n                                                      Pamela K. Chen\n                                                      United States District Judge\n Dated: March 31, 2026\n        Brooklyn, New York\n\n\n\n\n                                                 32\n\f","ocr_status":2,"date_upload":"2026-04-09T18:37:39.585862-07:00","document_number":"37","attachment_number":null,"pacer_doc_id":"123023582808","is_available":true,"is_free_on_pacer":true,"is_sealed":null,"document_type":1,"description":"Memorandum & Opinion AND Order on Motion to Dismiss","acms_document_guid":""}],"date_created":"2026-03-31T09:03:18.083961-07:00","date_modified":"2026-07-02T20:00:40.034996-07:00","date_filed":"2026-03-31","time_filed":"11:59:07","entry_number":37,"recap_sequence_number":"2026-03-31.001","pacer_sequence_number":146,"description":" MEMORANDUM AND ORDER: For the reasons set forth in the attached, Defendants' Motion to Dismiss is granted in its entirety, and Plaintiffs' Amended Complaint is dismissed. Plaintiffs are granted leave to amend their Amended Complaint within  thirty (30) days of this Order to plead, with the requisite specificity, the falsity of the alleged misstatements and Defendants' knowledge of that falsity. If Plaintiffs choose to amend their Amended Complaint, Plaintiffs shall also submit a redline demonstrating changes between the current complaint and the new complaint. Absent amendment within 30 days, the Clerk of Court will be directed to enter judgment and close this case.  Ordered by Judge Pamela K. Chen on 3/31/2026.   (FA)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/441045095/","id":441045095,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/455616518/","id":455616518,"tags":[],"absolute_url":"","date_created":"2025-10-15T18:43:31.326774-07:00","date_modified":"2026-04-09T18:35:52.783879-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-10-15T18:43:31.306647-07:00","date_modified":"2026-04-09T18:35:52.757876-07:00","date_filed":"2025-03-03","time_filed":null,"entry_number":null,"recap_sequence_number":"2025-03-03.002","pacer_sequence_number":null,"description":"ORDER: The parties' 29 proposed briefing schedule is So Ordered. Defendants shall serve their motion to dismiss by April 10, 2025; Plaintiffs shall serve their opposition on or before May 16, 2025; and Defendants shall serve their reply, if any, by June 16, 2025. As a courtesy to the Court, the parties are encouraged not to file their motion papers on ECF until the motion is fully briefed. If the parties follow this practice, the motion (or opposition) and all supporting papers are to be served on the other parties along with a cover letter setting forth whom the filer represents and the papers being served. At that time, only a copy of the cover letter should be filed electronically on ECF, as a letter, not as a motion. On the day the motion is fully briefed, each party shall electronically file its own moving papers. Ordered by Judge Pamela K. Chen on 3/3/2025. (MLB)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/441045094/","id":441045094,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/455616517/","id":455616517,"tags":[],"absolute_url":"","date_created":"2025-10-15T18:43:31.208433-07:00","date_modified":"2026-04-09T18:35:52.690400-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-10-15T18:43:31.189401-07:00","date_modified":"2026-04-09T18:35:52.663042-07:00","date_filed":"2025-02-28","time_filed":null,"entry_number":null,"recap_sequence_number":"2025-02-28.001","pacer_sequence_number":null,"description":"ORDER: The Court is in receipt of 27 Defendants' pre-motion conference (\"PMC\") request, and 28 Plaintiffs' response. Having reviewed the PMC request and Plaintiffs' response, the Court denies Defendants' PMC request as unnecessary. By March 7, 2025, the parties will submit a proposed joint briefing schedule for Defendants' motion to dismiss. The Court also notes that it cannot, as Plaintiffs request, deny \"Defendants leave to file a motion to dismiss\" and require them instead \"to answer and proceed into the next phase of this litigation.\" (Dkt. 28 at 1.) See Eisemann v. Greene, 204 F.3d 393, 397 (2d Cir. 2000) (\"Absent extraordinary circumstances,... a court has no power to prevent a party from filing pleadings, motions or appeals authorized by the Federal Rules of Civil Procedure.\" (quoting Richardson Greenshields Sec., Inc. v. Lau, 825 F.2d 647, 652 (2d Cir. 1987)). Ordered by Judge Pamela K. Chen on 2/28/2025. (MLB)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/433868706/","id":433868706,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/448236797/","id":448236797,"tags":[],"absolute_url":"/docket/68999532/36/martin-v-arbor-realty-trust-inc/","date_created":"2025-08-06T09:31:50.265943-07:00","date_modified":"2026-04-09T18:35:53.174613-07:00","sha1":"85a7c593dd924aa1d00954b266f38e718fe133b1","page_count":1,"file_size":81840,"filepath_local":"recap/gov.uscourts.nyed.518627/gov.uscourts.nyed.518627.36.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nyed.518627/gov.uscourts.nyed.518627.36.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:24-cv-05347-PKC-LKE       Document 36         Filed 08/06/25      Page 1 of 1 PageID #:\n                                        979\n\n\n\n\n                                United States District Court\n                               Eastern District of New York\n\n\n\n                                       NOTICE OF\n                                     RELATED CASE\n\n\n\n\n                        The Civil Cover Sheet filed in civil action\n\n                                2:25-CV-4373(SJB)(AYS)\n\n               1) indicated that this case is related to the following case(s):\n\n                                 1:24-cv-05347(PKC)(LKE)\n                                 1:25-cv-04180(RER)(TAM)\n                                 1:25-cv-02176(RPK)(JAM)\n\f","ocr_status":2,"date_upload":"2025-10-15T18:44:13.714737-07:00","document_number":"36","attachment_number":null,"pacer_doc_id":"123022792241","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Notice of Related Case Assignment/Designation","acms_document_guid":""}],"date_created":"2025-08-06T09:31:50.183260-07:00","date_modified":"2026-04-09T18:35:53.148182-07:00","date_filed":"2025-08-06","time_filed":"12:11:26","entry_number":36,"recap_sequence_number":"2025-08-06.001","pacer_sequence_number":144,"description":"Notice of Related Case: The Civil Cover Sheet filed in civil action 2:25cv4373(SJB)(AYS) indicates this is a related case. (LJ) (Entered: 08/06/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/428646088/","id":428646088,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/442876247/","id":442876247,"tags":[],"absolute_url":"/docket/68999532/35/martin-v-arbor-realty-trust-inc/","date_created":"2025-06-16T13:22:59.410388-07:00","date_modified":"2026-04-09T18:35:53.125039-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"35","attachment_number":null,"pacer_doc_id":"123022626138","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Letter","acms_document_guid":""}],"date_created":"2025-06-16T13:22:59.329957-07:00","date_modified":"2026-04-09T18:35:53.101821-07:00","date_filed":"2025-06-16","time_filed":"16:10:43","entry_number":35,"recap_sequence_number":"2025-06-16.004","pacer_sequence_number":142,"description":"Letter to the Hon. Pamela K. Chen from Andrew J. Levander dated June 16, 2025 re: Oral Argument on Motion to Dismiss Plaintiffs' Amended Class Action Complaint by Arbor Realty Trust, Inc., Paul Elenio, Ivan Kaufman (Levander, Andrew) (Entered: 06/16/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/428643037/","id":428643037,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/442873147/","id":442873147,"tags":[],"absolute_url":"/docket/68999532/34/martin-v-arbor-realty-trust-inc/","date_created":"2025-06-16T13:12:47.784144-07:00","date_modified":"2026-04-09T18:35:53.062064-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"34","attachment_number":null,"pacer_doc_id":"123022626059","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Reply in Support","acms_document_guid":""}],"date_created":"2025-06-16T13:12:47.767943-07:00","date_modified":"2026-04-09T18:35:53.029502-07:00","date_filed":"2025-06-16","time_filed":"16:00:06","entry_number":34,"recap_sequence_number":"2025-06-16.003","pacer_sequence_number":139,"description":"REPLY in Support re 32 MOTION to Dismiss Plaintiffs' Amended Class Action Complaint filed by Arbor Realty Trust, Inc., Paul Elenio, Ivan Kaufman. (Attachments: # 1 Declaration (Supplemental) of Angela M. Liu in Support, # 2 Exhibit 14., # 3 Exhibit 15.) (Levander, Andrew) (Entered: 06/16/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/428633656/","id":428633656,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/442863575/","id":442863575,"tags":[],"absolute_url":"/docket/68999532/33/martin-v-arbor-realty-trust-inc/","date_created":"2025-06-16T12:22:05.441762-07:00","date_modified":"2026-04-09T18:35:52.997186-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"33","attachment_number":null,"pacer_doc_id":"123022625734","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Memorandum in Opposition","acms_document_guid":""}],"date_created":"2025-06-16T12:22:05.423330-07:00","date_modified":"2026-04-09T18:35:52.971257-07:00","date_filed":"2025-06-16","time_filed":"15:17:48","entry_number":33,"recap_sequence_number":"2025-06-16.002","pacer_sequence_number":136,"description":"MEMORANDUM in Opposition re 32 MOTION to Dismiss Plaintiffs' Amended Class Action Complaint filed by David Hawkins, Lois Martin. (Apton, Adam) (Entered: 06/16/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/428586835/","id":428586835,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/442815254/","id":442815254,"tags":[],"absolute_url":"/docket/68999532/32/martin-v-arbor-realty-trust-inc/","date_created":"2025-06-16T08:21:30.888686-07:00","date_modified":"2026-04-10T02:26:06.286171-07:00","sha1":"03c5de6ffc5c7c91bd816ce7d983d088ab9ae7e7","page_count":3,"file_size":28656,"filepath_local":"recap/gov.uscourts.nyed.518627/gov.uscourts.nyed.518627.32.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nyed.518627/gov.uscourts.nyed.518627.32.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:24-cv-05347-PKC-LKE            Document 32        Filed 06/16/25     Page 1 of 3 PageID #:\n                                             638\n\n\n\n                            UNITED STATES DISTRICT COURT\n                            EASTERN DISTRICT OF NEW YORK\n\n LOIS MARTIN, individually\n and on behalf of all others similarly situated,\n                                                       NOTICE OF DEFENDANTS\u2019 MOTION\n                        Plaintiffs,                    TO DISMISS PLAINTIFFS\u2019 AMENDED\n                                                       CLASS ACTION COMPLAINT\n v.\n                                                                Oral Argument Requested\n ARBOR REALTY TRUST, INC., IVAN\n KAUFMAN, and PAUL ELENIO,                                      1:24-cv-05347-PKC-LKE\n\n\n                        Defendants.\n\n\n          PLEASE TAKE NOTICE that Defendants Arbor Realty Trust, Inc., Ivan Kaufman, and\n\nPaul Elenio (collectively, \u201cDefendants\u201d), by and through their respective counsel, shall move before\n\nthe Honorable Pamela K. Chen, United States District Judge for the Eastern District of New York,\n\nat a date and time to be set by the Court, in Courtroom 4F of the United States District Courthouse\n\nat 225 Cadman Plaza East, Brooklyn, NY 11201 for an Order dismissing Plaintiffs\u2019 Amended Class\n\nAction Complaint dated January 21, 2025, with prejudice pursuant to Federal Rules of Civil\n\nProcedure 9(b) and 12(b)(6) and the Private Securities Litigation Reform Act of 1995, 15 U.S.C. \u00a7\n\n78u-4 et seq., and granting Defendants such other and further relief as the Court may deem just and\n\nproper.\n\n          PLEASE TAKE FURTHER NOTICE that in support of the Motion to Dismiss, Defendants\n\nwill rely upon the accompanying Memorandum of Law in Support of Their Motion to Dismiss the\n\nAmended Class Action Complaint, the Declaration of Angela M. Liu, dated April 10, 2025, with\n\nattached exhibits, and all pleadings filed with the Court in this matter.\n\fCase 1:24-cv-05347-PKC-LKE   Document 32     Filed 06/16/25    Page 2 of 3 PageID #:\n                                    639\n\n\n\nDated: April 10, 2025                      Respectfully submitted,\n\n\n\n                                           By: /s/Andrew J. Levander\n                                           Andrew J. Levander\n                                           Neil A. Steiner\n                                           Angela M. Liu\n                                           DECHERT LLP\n                                           Three Bryant Park\n                                           1095 Sixth Avenue\n                                           New York, NY 10036\n                                           Tel: (212) 698-3500\n                                           andrew.levander@dechert.com\n                                           neil.steiner@dechert.com\n                                           angela.liu@dechert.com\n\n\n                                       Attorneys for Defendants\n\fCase 1:24-cv-05347-PKC-LKE           Document 32        Filed 06/16/25      Page 3 of 3 PageID #:\n                                            640\n\n\n\n                                CERTIFICATE OF SERVICE\n\n       I, the undersigned, hereby certify that on this 10th day of April 2025, I caused a copy of the\n\nforegoing document to be transmitted by email and First-Class mail to all counsel of record. In\n\naccordance with Rule 3.D. of the Honorable Judge Pamela K. Chen\u2019s Individual Practices and\n\nRules, on the day the motion is fully briefed, I shall direct that a copy of all motion papers be\n\nelectronically filed with the Court, which will automatically send notice and a copy of the filings\n\nto all counsel of record.\n\n                                                          /s/Andrew J. Levander\n                                                          Andrew J. Levander\n\f","ocr_status":2,"date_upload":"2026-04-09T18:39:48.293651-07:00","document_number":"32","attachment_number":null,"pacer_doc_id":"123022623732","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Dismiss","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369442/","id":475369442,"tags":[],"absolute_url":"/docket/68999532/32/1/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.646694-07:00","date_modified":"2026-04-09T18:37:06.646707-07:00","sha1":"","page_count":32,"file_size":122441,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":1,"pacer_doc_id":"123022623733","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Memorandum in Support of Motion to Dismiss Plaintiffs' Amended Class Action","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369443/","id":475369443,"tags":[],"absolute_url":"/docket/68999532/32/2/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.712313-07:00","date_modified":"2026-04-09T18:37:06.712326-07:00","sha1":"","page_count":2,"file_size":85144,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":2,"pacer_doc_id":"123022623734","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Declaration of Angela M. Liu in Support of Defendants' Motion to Dismiss th","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369444/","id":475369444,"tags":[],"absolute_url":"/docket/68999532/32/3/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.730063-07:00","date_modified":"2026-04-09T18:37:06.730073-07:00","sha1":"","page_count":41,"file_size":472973,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":3,"pacer_doc_id":"123022623735","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 1.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369445/","id":475369445,"tags":[],"absolute_url":"/docket/68999532/32/4/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.744635-07:00","date_modified":"2026-04-09T18:37:06.744644-07:00","sha1":"","page_count":39,"file_size":529142,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":4,"pacer_doc_id":"123022623736","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 2.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369446/","id":475369446,"tags":[],"absolute_url":"/docket/68999532/32/5/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.760242-07:00","date_modified":"2026-04-09T18:37:06.760251-07:00","sha1":"","page_count":10,"file_size":342266,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":5,"pacer_doc_id":"123022623737","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 3.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369447/","id":475369447,"tags":[],"absolute_url":"/docket/68999532/32/6/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.775567-07:00","date_modified":"2026-04-09T18:37:06.775575-07:00","sha1":"","page_count":10,"file_size":364826,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":6,"pacer_doc_id":"123022623738","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 4.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369448/","id":475369448,"tags":[],"absolute_url":"/docket/68999532/32/7/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.790290-07:00","date_modified":"2026-04-09T18:37:06.790298-07:00","sha1":"","page_count":11,"file_size":342516,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":7,"pacer_doc_id":"123022623739","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 5.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369449/","id":475369449,"tags":[],"absolute_url":"/docket/68999532/32/8/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.804842-07:00","date_modified":"2026-04-09T18:37:06.804850-07:00","sha1":"","page_count":11,"file_size":358837,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":8,"pacer_doc_id":"123022623740","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 6.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369450/","id":475369450,"tags":[],"absolute_url":"/docket/68999532/32/9/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.819696-07:00","date_modified":"2026-04-09T18:37:06.819707-07:00","sha1":"","page_count":38,"file_size":488805,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":9,"pacer_doc_id":"123022623741","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 7.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369451/","id":475369451,"tags":[],"absolute_url":"/docket/68999532/32/10/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.835921-07:00","date_modified":"2026-04-09T18:37:06.835931-07:00","sha1":"","page_count":30,"file_size":1290957,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":10,"pacer_doc_id":"123022623742","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 8.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369452/","id":475369452,"tags":[],"absolute_url":"/docket/68999532/32/11/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.855199-07:00","date_modified":"2026-04-09T18:37:06.855208-07:00","sha1":"","page_count":6,"file_size":351833,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":11,"pacer_doc_id":"123022623743","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 9.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369453/","id":475369453,"tags":[],"absolute_url":"/docket/68999532/32/12/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.870160-07:00","date_modified":"2026-04-09T18:37:06.870169-07:00","sha1":"","page_count":38,"file_size":5651557,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":12,"pacer_doc_id":"123022623744","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 10.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369454/","id":475369454,"tags":[],"absolute_url":"/docket/68999532/32/13/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.885092-07:00","date_modified":"2026-04-09T18:37:06.885100-07:00","sha1":"","page_count":2,"file_size":209349,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":13,"pacer_doc_id":"123022623745","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 11.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369455/","id":475369455,"tags":[],"absolute_url":"/docket/68999532/32/14/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.899891-07:00","date_modified":"2026-04-09T18:37:06.899899-07:00","sha1":"","page_count":2,"file_size":210058,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":14,"pacer_doc_id":"123022623746","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 12.","acms_document_guid":""},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/475369456/","id":475369456,"tags":[],"absolute_url":"/docket/68999532/32/15/martin-v-arbor-realty-trust-inc/","date_created":"2026-04-09T18:37:06.913970-07:00","date_modified":"2026-04-09T18:37:06.913979-07:00","sha1":"","page_count":3,"file_size":271250,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"32","attachment_number":15,"pacer_doc_id":"123022623747","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":2,"description":"Exhibit 13.","acms_document_guid":""}],"date_created":"2025-06-16T08:21:30.864825-07:00","date_modified":"2026-04-09T18:35:52.917713-07:00","date_filed":"2025-06-16","time_filed":"11:16:58","entry_number":32,"recap_sequence_number":"2025-06-16.001","pacer_sequence_number":134,"description":"MOTION to Dismiss Plaintiffs' Amended Class Action Complaint by Arbor Realty Trust, Inc., Paul Elenio, Ivan Kaufman. (Attachments: # 1 Memorandum in Support of Motion to Dismiss Plaintiffs' Amended Class Action Complaint, # 2 Declaration of Angela M. Liu in Support of Defendants' Motion to Dismiss the Amended Class Action Complaint, # 3 Exhibit 1., # 4 Exhibit 2., # 5 Exhibit 3., # 6 Exhibit 4., # 7 Exhibit 5., # 8 Exhibit 6., # 9 Exhibit 7., # 10 Exhibit 8., # 11 Exhibit 9., # 12 Exhibit 10., # 13 Exhibit 11., # 14 Exhibit 12., # 15 Exhibit 13.) (Levander, Andrew) (Entered: 06/16/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/425688744/","id":425688744,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/439835542/","id":439835542,"tags":[],"absolute_url":"/docket/68999532/31/martin-v-arbor-realty-trust-inc/","date_created":"2025-05-16T13:23:41.415592-07:00","date_modified":"2026-04-09T18:35:52.891456-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"31","attachment_number":null,"pacer_doc_id":"123022529949","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Letter","acms_document_guid":""}],"date_created":"2025-05-16T13:23:41.402766-07:00","date_modified":"2026-04-09T18:35:52.864816-07:00","date_filed":"2025-05-16","time_filed":"16:14:44","entry_number":31,"recap_sequence_number":"2025-05-16.001","pacer_sequence_number":132,"description":"Letter re Service of Opposition Brief by David Hawkins, Lois Martin (Apton, Adam) (Entered: 05/16/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/422022266/","id":422022266,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/436038922/","id":436038922,"tags":[],"absolute_url":"/docket/68999532/30/martin-v-arbor-realty-trust-inc/","date_created":"2025-04-10T13:11:04.212249-07:00","date_modified":"2026-04-09T18:35:52.831216-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"30","attachment_number":null,"pacer_doc_id":"123022403204","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Letter","acms_document_guid":""}],"date_created":"2025-04-10T13:11:04.128544-07:00","date_modified":"2026-04-09T18:35:52.804773-07:00","date_filed":"2025-04-10","time_filed":"16:02:36","entry_number":30,"recap_sequence_number":"2025-04-10.001","pacer_sequence_number":130,"description":"Letter re: service of Motion to Dismiss Plaintiffs' Amended Complaint, Accompanying Memorandum of Law, Declaration of Angela M. Liu, and supporting Exhibits by Arbor Realty Trust, Inc., Paul Elenio, Ivan Kaufman (Levander, Andrew) (Entered: 04/10/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/418119348/","id":418119348,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/431908396/","id":431908396,"tags":[],"absolute_url":"","date_created":"2025-03-03T13:50:08.739793-08:00","date_modified":"2025-03-03T13:50:08.742198-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order(Other)","acms_document_guid":""}],"date_created":"2025-03-03T13:50:08.733718-08:00","date_modified":"2025-03-03T13:50:08.733726-08:00","date_filed":"2025-03-03","time_filed":"16:45:14","entry_number":null,"recap_sequence_number":"2025-03-03.001","pacer_sequence_number":null,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/418118735/","id":418118735,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/431907754/","id":431907754,"tags":[],"absolute_url":"/docket/68999532/29/martin-v-arbor-realty-trust-inc/","date_created":"2025-03-03T13:35:06.725536-08:00","date_modified":"2026-04-09T18:35:52.740533-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"29","attachment_number":null,"pacer_doc_id":"123022267036","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Stipulation","acms_document_guid":""}],"date_created":"2025-03-03T13:35:06.714599-08:00","date_modified":"2026-04-09T18:35:52.716239-07:00","date_filed":"2025-03-03","time_filed":"16:24:47","entry_number":29,"recap_sequence_number":"2025-03-03.001","pacer_sequence_number":126,"description":"STIPULATION and Proposed Order Regarding Briefing Schedule (Jointly) by Arbor Realty Trust, Inc., Paul Elenio, Ivan Kaufman (Levander, Andrew) (Entered: 03/03/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/417851492/","id":417851492,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/431631979/","id":431631979,"tags":[],"absolute_url":"","date_created":"2025-02-28T05:22:15.306911-08:00","date_modified":"2025-02-28T05:22:15.309891-08:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Order on Motion for Pre Motion Conference","acms_document_guid":""}],"date_created":"2025-02-28T05:22:15.300095-08:00","date_modified":"2025-02-28T05:22:15.300106-08:00","date_filed":"2025-02-28","time_filed":"08:12:22","entry_number":null,"recap_sequence_number":"2025-02-28.001","pacer_sequence_number":null,"description":"","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/417765402/","id":417765402,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/431538352/","id":431538352,"tags":[],"absolute_url":"/docket/68999532/28/martin-v-arbor-realty-trust-inc/","date_created":"2025-02-27T11:30:57.356378-08:00","date_modified":"2026-04-09T18:35:52.637063-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"28","attachment_number":null,"pacer_doc_id":"123022255197","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Letter","acms_document_guid":""}],"date_created":"2025-02-27T11:30:57.344739-08:00","date_modified":"2026-04-09T18:35:52.611518-07:00","date_filed":"2025-02-27","time_filed":"14:23:49","entry_number":28,"recap_sequence_number":"2025-02-27.001","pacer_sequence_number":122,"description":"Letter Response to Defendants' Request for Pre-Motion Conference 27 by David Hawkins, Lois Martin (Apton, Adam) (Entered: 02/27/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/417085864/","id":417085864,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/430838392/","id":430838392,"tags":[],"absolute_url":"/docket/68999532/27/martin-v-arbor-realty-trust-inc/","date_created":"2025-02-20T12:33:39.257518-08:00","date_modified":"2026-05-22T08:59:26.305183-07:00","sha1":"51926055f8b8cd2e94516d168f997d60847e93ac","page_count":3,"file_size":147881,"filepath_local":"recap/gov.uscourts.nyed.518627/gov.uscourts.nyed.518627.27.0.pdf","filepath_ia":"https://archive.org/download/gov.uscourts.nyed.518627/gov.uscourts.nyed.518627.27.0.pdf","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"Case 1:24-cv-05347-PKC-LKE                    Document 27            Filed 02/20/25         Page 1 of 3 PageID #:\n                                                     625\n                                                                                      Three Bryant Park\n                                                                                      1095 Avenue of the Americas\n                                                                                      New York, NY 10036-6797\n                                                                                      +1 212 698 3500 Main\n                                                                                      +1 212 698 3599 Fax\n                                                                                      www.dechert.com\nFebruary 20, 2025\nVIA ECF                                                                               ANDREW J. LEVANDER\n\nHon. Pamela K. Chen, U.S.D.J.                                                         Andrew.Levander@dechert.com\nUnited States District Court for the Eastern District of New York                     +1 212 698 3683\n225 Cadman Plaza East\nBrooklyn, New York 11201\nRe: Martin et al. v. Arbor Realty Trust, Inc. et al., Case No. 1:24-cv-05347-PKC-LKE (E.D.N.Y.)\nDear Judge Chen:\nWe represent Defendants Arbor Realty Trust, Inc. (\u201cArbor\u201d), its chief executive officer, Ivan Kaufman,\nand its chief financial officer, Paul Elenio, (collectively \u201cDefendants\u201d) in the above-captioned matter. We\nrespectfully submit this letter pursuant to Rule 3A of Your Honor\u2019s Individual Practices and Rules to\nrequest a pre-motion conference to move to dismiss Plaintiffs\u2019 Amended Class Action Complaint (the\n\u201cAmended Complaint\u201d) under Rule 12(b)(6) and the Private Securities Litigation Reform Act of 1995, 15\nU.S.C. \u00a7 78u-4 (the \u201cPSLRA\u201d).1\nArbor is headquartered in Uniondale, New York, and has been a premier provider of commercial and\nmultifamily real estate loans for over twenty years. The Amended Complaint alleges that Arbor, along\nwith Messrs. Kaufman and Elenio, misled investors by portraying that Arbor had prudent underwriting\npractices and internal controls, when the Company was supposedly engaged in \u201ca fraudulent scheme to\nartificially inflate the Company\u2019s loan volume and reported earnings by abandoning or, at minimum,\nrecklessly disregarding, [Arbor\u2019s] underwriting standards to complete high-risk bridge loans[.]\u201d AC \u00b6 10.\nBut the sheer volume of block quotes and conclusory allegations spanning 224 pages does not withstand\nthe rigorous pleading standards required under the PSLRA. See In re Barrick Gold Corp. Sec. Litig., 341\nF. Supp. 3d 358, 374 (S.D.N.Y. 2018) (\u201czero plus zero is zero\u201d) (internal quotation marks omitted). As\npreviewed below and to be addressed in Defendants\u2019 motion, Plaintiffs\u2019 pleading is based on nothing more\nthan the self-serving stories concocted by short sellers and speculative allegations attributed to unidentified\nrank-and-file former employees. The Amended Complaint ignores the disclosed risks of investing in a\ncompany involved in the CLO business; that Arbor\u2019s independent auditor, Ernst & Young (\u201cE&Y\u201d),\nreviewed and approved Arbor\u2019s financial statements, risk-management practices, and internal controls and\nhas never withdrawn its unqualified opinion on those financial statements; and that Arbor has never issued\na purported corrective disclosure or restatement of its historical financial statements. Plaintiffs fail to plead\n(i) a false or misleading statement or omission, (ii) scienter, and (iii) loss causation\u2014elements of a Section\n10(b) or 20(a) Exchange Act claim. The Amended Complaint should be dismissed with prejudice.\nI.         Plaintiffs Fail To Plead Adequately A False Or Misleading Statement Or Omission\nThe Amended Complaint alleges that more than 100 statements in Arbor\u2019s securities filings and earnings\ncalls from 2021 to 2024 were false and misleading because Defendants supposedly (1) made false or\nmisleading statements regarding Arbor\u2019s loss reserves due to its alleged violation of its underwriting\npolicies and practices, (2) misrepresented Arbor\u2019s performance by failing to disclose internal control\nweaknesses, and (3) violated GAAP by reporting a net income that was artificially inflated by understating\nits allowance for credit loss reserves. See AC \u00b6\u00b6 252\u2013612. Plaintiffs rely almost entirely on self-serving\nshort seller reports and allegations from anonymous former employees. But such reports must be read\ncautiously given their self-serving nature, see In re DraftKings Inc. Sec. Litig., 650 F. Supp. 3d 120, 154\n(S.D.N.Y. 2023) (recognizing short sellers\u2019 \u201cobvious motive to exaggerate the infirmities of the securities\nin which they speculate,\u201d and that factual allegations in short reports \u201cmust be considered with caution,\u201d\n\n1\n    Defendants expressly reserve the right to raise additional arguments in their motion to dismiss.\n\fCase 1:24-cv-05347-PKC-LKE               Document 27         Filed 02/20/25        Page 2 of 3 PageID #:\n                                                626\n\n                                                                 Hon. Pamela K. Chen, U.S.D.J.\n                                                                 February 20, 2025\n                                                                 Page 2\n\n\n\nand be \u201ccritically analyze[d].\u201d) Doing so reveals that the reports in this case consist of mere opinions based\non publicly available information and do not address, much less establish, the core conduct about which\nPlaintiffs complain. This alone justifies dismissal of the Amended Complaint. See Harris v. AmTrust Fin.\nServs., Inc., 135 F. Supp. 3d 155, 159\u201360 (S.D.N.Y. 2015) (dismissing complaint based almost exclusively\non short seller report). Indeed, when allegations in short seller reports cannot be independently\ncorroborated, \u201cthe risk of motivated reporting by the author of the short-seller report is twinned with the\nreliability concerns presented by anonymous sourcing.\u201d Long Miao v. Fanhua, Inc., 442 F. Supp. 3d 774,\n801 (S.D.N.Y. 2020). Moreover, Plaintiffs\u2019 reliance on allegations from confidential former employees\u2014\nmany of whom worked at Arbor for a short time during the putative class period, were not employed in the\nunderwriting department, and did not have direct interactions with either individual defendant\u2014are\ninsufficient to establish that Defendants made false statements or omitted material information. See\nWoolgar v. Kingstone Cos., Inc., 477 F. Supp. 3d 193, 224, 231\u201332 (S.D.N.Y. 2020) (dismissing claims\nrelying upon confidential witnesses that did not establish \u201chow and why\u201d statements were false or omitted).\nLikewise, Plaintiffs\u2019 allegations regarding loss reserves, internal controls, and GAAP violations are\ninsufficient to plead an actionable statement of fact. Statements regarding loss reserves are inactionable\nopinions because the adequacy of the loss reserves \u201creflect[s] management\u2019s opinion or judgment about\nwhat, if any, portion of amounts due on the loans ultimately might not be collectible.\u201d Woolgar, 477 F.\nSupp. 3d at 223 (internal quotation marks omitted). Moreover, here Plaintiffs\u2019 arguments are essentially\nthat Defendants\u2019 statements regarding internal controls \u201cmust have been deficient because they may have\nfailed to detect some weaknesses in its financial reports or disclosures.\u201d Arora v. HDFC Bank Ltd., 671 F.\nSupp. 3d 305, 315 (E.D.N.Y. 2023) (emphasis added). Such conclusory and vague allegations are\ninsufficient to withstand dismissal where Plaintiffs \u201cneither describe the internal controls that [the\ncompany] had in place, nor explain how or why they were deficient in a way that enabled the [harm] to\noccur.\u201d Id. at 315. Further, statements regarding general internal controls are mere puffery and therefore\nnot actionable. In re Liberty Tax, Inc. Sec. Litig., 435 F. Supp. 3d 457, 467 (E.D.N.Y. 2020). And Plaintiffs\u2019\nallegations regarding Defendants\u2019 supposed GAAP violations are insufficient because \u201c[a]ccounting or\nbusiness judgments, even negligent ones, are not actionable.\u201d In re Fannie Mae 2008 Sec. Litig., 742 F.\nSupp. 2d 382, 408 (S.D.N.Y. 2010). In any event, Defendants expressly disclosed that Arbor is involved in\nthe CLO business and the extensive inherent risks of that business. See, e.g., 2021 10-K at 15\u201318; 2022 10-\nK at 15\u201318. And their financial reporting and internal controls were reviewed and approved by an\nindependent auditor and have never been restated. See, e.g., 2021 10-K at 118; 2022 10-K at 119.\nII.     Plaintiffs\u2019 Allegations Fail To Give Rise To A Strong Inference Of Scienter\nThe Amended Complaint also fails to allege that Defendants acted with scienter. To plead scienter, \u201ca\nmental state embracing intent to deceive, manipulate, or defraud,\u201d Plaintiffs must plead particularized facts\n\u201cthat give rise to a \u2018strong\u2019\u2014i.e., a powerful or cogent\u2014inference\u201d that is \u201cat least as compelling as any\nopposing inference.\u201d Tellabs Inc. v. Makor Issues & Rts. Ltd., 551 U.S. 308, 319, 323\u201324 (2007). Plaintiffs\ncan do this through allegations of motive and opportunity to commit fraud or by alleging facts providing\n\u201cstrong circumstantial evidence of conscious misbehavior or recklessness.\u201d Kalnit v. Eichler, 264 F. 3d\n131, 138 (2d Cir. 2001). The Amended Complaint does neither.\nPlaintiffs\u2019 argument that the Individual Defendants were motivated \u201cby a desire to maintain or increase\nexecutive compensation\u201d is foreclosed by Second Circuit precedent. Id. at 139. Plaintiffs\u2019 alternative\nrecklessness theory is equally untenable. As explained above, Plaintiffs parrot conclusory allegations from\nlow-level former employees, but they fail to allege facts demonstrating that Defendants knew about\n\u201cspecific, contradictory information at the time they made the allegedly false and misleading statements.\u201d\nWoolgar, 477 F. Supp. 3d at 237. Plaintiffs\u2019 allegations involving GAAP and SOX certifications are nothing\n\fCase 1:24-cv-05347-PKC-LKE                  Document 27           Filed 02/20/25         Page 3 of 3 PageID #:\n                                                   627\n\n                                                                     Hon. Pamela K. Chen, U.S.D.J.\n                                                                     February 20, 2025\n                                                                     Page 3\n\n\n\nmore than \u201cnaked assertion[s] devoid of further factual enhancement.\u201d Harris, 135 F. Supp. 3d at 172. And\ncourts in the Second Circuit reject Plaintiffs\u2019 core operations or corporate positions theory. Zhong Zheng v.\nPingtan Marine Enter. Ltd., 379 F. Supp. 3d 164, 181 (E.D.N.Y. 2019) (\u201cmajority rule\u201d is \u201ccore operations\nallegations\u201d are not \u201can independent means to plead scienter.\u201d). Any recklessness theory is further\nundermined because Arbor\u2019s \u201cindependent auditor . . . [was] unable to identify any material inaccuracies\nor weaknesses\u201d in Arbor\u2019s financials. Woolgar, 477 F. Supp. 3d at 238. The more plausible, nonculpable\ninference is that Defendants made good-faith judgments regarding their business practices and internal\ncontrols that were audited by their longstanding auditor quarter after quarter, but short sellers motivated to\nshort the stock one day launched a fanciful attack on Arbor\u2019s internal controls and financials. Id. at 240.\nIII.     Plaintiffs Fail To Allege Facts Supporting Loss Causation\nFurthermore, Plaintiffs fail to allege facts showing that the purported fraud caused their alleged losses. To\nestablish loss causation, Plaintiffs claim that the three short seller reports and a Bloomberg news article\nannouncing the commencement of a government investigation qualify as corrective disclosures that\nrevealed the fraud to the market. To be a corrective disclosure, a report generally must contain new facts\nthat were not previously known to the market. Zhong Zheng, 379 F. Supp. 3d at 177\u201378.\nHere, in addition to Plaintiffs\u2019 failure to plead a corrective disclosure,2 all three short seller reports\nacknowledge that they are merely \u201cthe authors\u2019 opinions, which have been based upon publicly available\nfacts.\u201d Viceroy Research, 11/16/23 Report at 5; 12/05/23 Report at 5; and 05/09/24 Report at 14. By their\nown admission, these reports merely \u201cexpress negative opinions . . . based on information that was already\npublicly available,\u201d so they cannot be \u201c\u2018corrective\u2019 for the purpose of pleading loss causation.\u201d Cent. States,\nSe. and Sw. Areas Pension Fund v. Fed Home Loan Mortg. Corp., 543 F. App\u2019x 72, 75 (2d Cir. 2013). And\nthe July 12, 2024, Bloomberg article simply announces the commencement of a government investigation\nwithout providing details or any new information, which is \u201cinsufficient to constitute a corrective disclosure\nfor purposes of \u00a7 10(b).\u201d Meyer v. Greene, 710 F.3d 1189, 1201 (11th Cir. 2013).\nIV.      Plaintiffs Fail To Allege Scheme Liability\nTo the extent that Plaintiffs attempt to allege scheme liability, they fail. Courts do not allow plaintiffs to\n\u201cbypass the elements necessary to impose misstatement liability under subsection (b) by labeling the alleged\nmisconduct a scheme rather than a misstatement.\u201d In re AT&T DirecTV Now Sec. Litig., 480 F. Supp. 3d\n507, 534 (S.D.N.Y. 2020) (internal quotation marks omitted).\n                                          *        *        *\nFor at least these reasons, the Amended Complaint fails to state a claim on which relief may be granted.\nAccordingly, Defendants respectfully request a pre-motion conference and permission to file a motion to\ndismiss the Amended Complaint with prejudice.\nSincerely,\n\n/s/ Andrew J. Levander\nAndrew J. Levander\n\n\ncc:      All Counsel of Record (via ECF)\n\n2\n  Arbor has not issued a restatement and continues to stand by its financials and public disclosures. If the stock was\ninflated as Plaintiffs claim, it would still be so today. See Dura Pharm., Inc. v. Broudo, 544 U.S. 342\u201348 (2005).\n\f","ocr_status":1,"date_upload":"2026-05-20T04:33:26.270275-07:00","document_number":"27","attachment_number":null,"pacer_doc_id":"123022231709","is_available":true,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Pre Motion Conference","acms_document_guid":""}],"date_created":"2025-02-20T12:33:39.239913-08:00","date_modified":"2026-04-09T18:35:52.550280-07:00","date_filed":"2025-02-20","time_filed":"15:26:07","entry_number":27,"recap_sequence_number":"2025-02-20.001","pacer_sequence_number":120,"description":"Letter MOTION for pre motion conference by Arbor Realty Trust, Inc., Paul Elenio, Ivan Kaufman. (Levander, Andrew) (Entered: 02/20/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/414142574/","id":414142574,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/427770410/","id":427770410,"tags":[],"absolute_url":"/docket/68999532/26/martin-v-arbor-realty-trust-inc/","date_created":"2025-01-21T14:44:02.254360-08:00","date_modified":"2026-04-09T18:35:52.517071-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"26","attachment_number":null,"pacer_doc_id":"123022120140","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"Amended Complaint","acms_document_guid":""}],"date_created":"2025-01-21T14:44:02.234482-08:00","date_modified":"2026-04-09T18:35:52.493650-07:00","date_filed":"2025-01-21","time_filed":"16:53:49","entry_number":26,"recap_sequence_number":"2025-01-21.001","pacer_sequence_number":116,"description":"AMENDED COMPLAINT against Arbor Realty Trust, Inc., Paul Elenio, Ivan Kaufman, filed by David Hawkins, Lois Martin. (Apton, Adam) (Entered: 01/21/2025)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/413029588/","id":413029588,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/426587120/","id":426587120,"tags":[],"absolute_url":"","date_created":"2025-01-09T02:11:20.962425-08:00","date_modified":"2026-04-09T18:35:52.471365-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-01-09T02:11:20.953888-08:00","date_modified":"2026-04-09T18:35:52.445921-07:00","date_filed":"2024-12-18","time_filed":null,"entry_number":null,"recap_sequence_number":"2024-12-18.002","pacer_sequence_number":null,"description":"ORDER: The Court is in receipt of Lead Plaintiff Hawkins' 25 motion for an extension of time to file his amended complaint. That motion is granted with a slight modification. The amended complaint shall be due January 21, 2025 (as opposed to Lead Plaintiff Hawkins' proposed January 20, 2025 deadline, since the Court will be closed on that day in observance of Martin Luther King Jr. Day). Defendants' answer or pre-motion conference request shall be due February 20, 2025. The parties are reminded that pursuant to this Court's Individual Rule 1(F), all submissions must be filed by 5:00 p.m. (ET) on the day of the filing deadline to be considered timely. Ordered by Judge Pamela K. Chen on 12/18/2024. (MLB)","tags":[]},{"resource_uri":"https://www.courtlistener.com/api/rest/v4/docket-entries/413029587/","id":413029587,"docket":"https://www.courtlistener.com/api/rest/v4/dockets/68999532/","recap_documents":[{"resource_uri":"https://www.courtlistener.com/api/rest/v4/recap-documents/426587119/","id":426587119,"tags":[],"absolute_url":"","date_created":"2025-01-09T02:11:20.901832-08:00","date_modified":"2026-04-09T18:35:52.345944-07:00","sha1":"","page_count":null,"file_size":null,"filepath_local":null,"filepath_ia":"","ia_upload_failure_count":null,"thumbnail":null,"thumbnail_status":0,"plain_text":"","ocr_status":null,"date_upload":null,"document_number":"","attachment_number":null,"pacer_doc_id":"","is_available":false,"is_free_on_pacer":null,"is_sealed":null,"document_type":1,"description":"","acms_document_guid":""}],"date_created":"2025-01-09T02:11:20.893712-08:00","date_modified":"2026-04-09T18:35:52.322313-07:00","date_filed":"2024-11-07","time_filed":null,"entry_number":null,"recap_sequence_number":"2024-11-07.001","pacer_sequence_number":null,"description":"ORDER: The Court is in receipt of 24 the parties' joint stipulation and proposed briefing schedule. The Court grants the parties' request for the amended complaint to be due January 6, 2025. The Court denies the parties' request to dispense with this Court's pre-motion conference requirement in favor of setting a briefing schedule for the motion to dismiss. (Dkt. 24 \u00b6\u00b6 2-5); see also Judge Pamela K. Chen Individual Practice & Rules 3(A). Defendants' answer or pre-motion conference request shall be due February 5, 2025. If Defendants elect to file a pre-motion conference request, Plaintiffs' response shall be due February 19, 2025. The Court notes that pursuant to this Court's Individual Rule 1(F), all submissions must be filed by 5:00 p.m. (ET) on the day of the filing deadline to be considered timely. Ordered by Judge Pamela K. Chen on 11/7/2024. (MLB)","tags":[]}],"entries_total":"https://www.courtlistener.com/api/rest/v4/docket-entries/?count=on&docket=68999532&page_size=40"}