Court Opinion

ID: 9382635
Source: CourtListenerOpinion
Date Created: 2023-03-28 15:00:40.435557+00
Date Added: 2024-06-11T17:17:40.635012
License: Public Domain

Appellate Case: 21-3035    Document: 010110833726   Date Filed: 03/28/2023   Page: 1
                                                                            FILED
                                                                United States Court of Appeals
                                                                        Tenth Circuit
                                     PUBLISH
                                                                       March 28, 2023
                   UNITED STATES COURT OF APPEALS
                                                                    Christopher M. Wolpert
                            FOR THE TENTH CIRCUIT                       Clerk of Court
                          _________________________________

  ELLA CLINTON; WILLIAM
  CARRICK; TERRI L. STAUFFER-
  SCHMIDT; JEAN P. WRIGHT;
  MICHAEL A. WEBBER; DONALD P.
  COX; HOWARD ROSEN; WAI HEE
  YUEN; MARTHA MILLER COX,

        Plaintiffs - Appellants,

  v.                                                    No. 21-3035

  SECURITY BENEFIT LIFE
  INSURANCE COMPANY,

        Defendant - Appellee.
                     _________________________________

               Appeal from the United States District Court
                        for the District of Kansas
                   (D.C. No. 5:20-CV-04038-HLT-KGG)
                    _________________________________

 Andrew S. Friedman of Bonnett Fairbourn Friedman & Balint PC (Francis J.
 Balint, Jr. of Bonnett Fairbourn Friedman & Balint PC, Phoenix, Arizona;
 Adam M. Moskowitz and Howard H. Bushman of The Moskowitz Law Firm,
 PLLC, Coral Gables, Florida; and Eric D. Barton of Wagstaff & Cartmell, LLP,
 Kansas City, Missouri, with him on the briefs), for Plaintiffs-Appellants.

 Robert D. Phillips, Jr. of Alston & Bird LLP (Samuel J. Park and Gillian H.
 Clow of Alston & Bird LLP, Los Angeles, California; Michael A. Valerio of
 Alston & Bird LLP, Washington, District of Columbia; and James D. Oliver,
 Anthony F. Rupp, and Holly Dyer of Foulston Siefkin LLP, Overland Park,
 Kansas, with him on the brief), for Defendant-Appellee.
                      _________________________________
Appellate Case: 21-3035   Document: 010110833726     Date Filed: 03/28/2023     Page: 2

 Before HARTZ, BACHARACH, and ROSSMAN, Circuit Judges.
                  _________________________________

 ROSSMAN, Circuit Judge.
                  _________________________________

       Plaintiffs are consumers who sued Defendant Security Benefit Life

 Insurance    Company      under   the   Racketeer    Influenced    and       Corrupt

 Organizations Act (“RICO”), 18 U.S.C. § 1962, and state law, alleging Security

 Benefit developed a fraudulent scheme to design and market certain annuity

 products. This appeal requires us to determine whether the district court

 properly dismissed Plaintiffs’ first amended complaint without prejudice for

 lack of particularity and plausibility in pleading fraud. Because we conclude

 Plaintiffs have alleged facially plausible fraud claims with the particularity

 required under Federal Rule of Civil Procedure 9(b), the district court erred in

 granting Security Benefit’s motion to dismiss under Federal Rule of Civil

 Procedure 12(b)(6). Exercising jurisdiction under 28 U.S.C. § 1291, we reverse

 and remand for further proceedings.

                                         I

                                   Background1

       This case involves equity-indexed deferred annuities, a type of insurance

 product marketed and sold to Plaintiffs by Security Benefit. Before turning to

       We rely on the complaint’s allegations for our account of this appeal’s
       1

 background.

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 our analysis, we will explain the technical features of this annuity. As we

 discuss later, the complaint’s principal fraud claims concern these features and

 the alleged undisclosed effects of their collective operation on Plaintiffs’

 investments.

                    A. Equity-Indexed Deferred Annuities

                                1. Basic Features

       A deferred annuity is a contract between a consumer and an insurance

 company. A consumer purchases the deferred annuity with a single “up-front

 payment”—an initial premium—deposited into the consumer’s account for a

 deferral period. Aplt. App. vol. 1 at 161 ¶ 23. The deferral period is a term of

 years specified in the annuity contract. The insurance company invests the

 consumer’s initial premium over the deferral period. A deferred annuity is a

 long-term investment because an annuity owner often cannot access their

 initial premium during the deferral period without incurring a financial

 penalty. An annuity owner may receive a lump sum payment at the end of their

 deferral period, or a stream of periodic payments.

       An equity-indexed deferred annuity—at issue here—gives consumers

 the choice to allocate their initial premium among several crediting options.

 Consumers may allocate their initial premium to a crediting option that

 provides a fixed interest rate “not less than a modest minimum guaranteed

 rate,” or to a crediting option linked to designated stock indices. Id. at 161-62

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 ¶ 24.2 Equity-indexed deferred annuities are usually linked to third-party

 stock indices like the Standard & Poor’s 500. One key feature of an

 equity-indexed deferred annuity is its performance is tied to the success of the

 linked financial market.

                          2. Participation Rates & “Caps”

       The index-linked return credited to the investor can vary not only based

 on the performance of the stock index, but also based on the particular terms

 of the annuity contract. Participation rates and “caps” are common features of

 annuity products. A cap is a limit—usually a fixed percentage—on the amount

 an annuity owner earns from the underlying stock index’s gains. A

 participation rate is the percentage of the underlying stock index’s

 performance that the insurance company agrees to pass along to the investor.3

       2An equity-indexed deferred annuity “guarantees a minimum return
 to the contract owner if the contract is held to maturity.” Equity Index
 Insurance Products, Securities Act Release No. 7438, Fed. Sec. L. Rep.
 (CCH) ¶ 85,957 (Aug. 20, 1997). In this way equity-indexed deferred
 annuities “combine features of traditional insurance products (guaranteed
 minimum return) and traditional securities (return linked to equity
 markets).” Id.

       3 The district court provides an example: if an annuity’s participation
 rate is 70% and the underlying index increases by 10%, then the annuity
 account is credited with 70% of the index’s increase, or 7%. Aplt. App. vol. 8
 at 1951.

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       Higher participation rates and higher caps yield a higher rate of interest

 credited to the annuity holder’s account. Many equity-indexed deferred

 annuities impose both caps and participation rates.

    B. Security Benefit’s Equity-Indexed Deferred Annuity Products

       Shortly after being acquired by a private equity firm in 2010, Security

 Benefit developed and marketed equity-indexed deferred annuity products. It

 sold two annuities: the “Secure Income Annuity” and the “Total Value Annuity”

 (collectively, the “annuity products”). Aplt. App. vol. 1 at 157 ¶ 3. Investors

 paid fees and charges associated with the annuity products. Plaintiffs allege

 these annuity products share several features relevant to their fraud claims.

                              1. Proprietary Indices

       Equity-indexed deferred annuities typically tie their performance to

 established financial markets like the Standard & Poor’s 500. The annuity

 products at issue here were associated with proprietary stock indices used by

 Security Benefit.

       From 2012 to 2015, Security Benefit used three proprietary indices. Two

 were linked to the Total Value Annuity product. One was linked to the Secure

 Income Annuity product.4 Once a consumer bought one of these annuity

       4The proprietary indices are called the “5-Year Annuity Linked TV
 Index,” the “Morgan Stanley Dynamic Allocation Index Account,” and the
 “BNP Paribas High Dividend Plus Annual Point to Point Index Account –
 Year 2.” Aplt. App. vol. 1 at 158 ¶ 5. We discuss the individual proprietary

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 products, Security Benefit allowed the consumer to allocate some or all their

 initial premium to the corresponding proprietary index.

         According to Plaintiffs, Security Benefit’s annuities linked to the

 proprietary indices “would—by design—produce near-zero returns due to

 misrepresented and undisclosed features, risks, charges and attributes.” Aplt.

 App. vol. 1 at 156-57 ¶ 2. Security Benefit misleadingly marketed the annuity

 products as attractive investment opportunities—uncapped and with 100%

 participation rates in the proprietary indices. But Plaintiffs allege the annuity

 products were, in practice, actually capped, and had less than 100%

 participation rates. The only information “reasonably available” to consumers

 about Security Benefit’s proprietary indices, Plaintiffs allege, was in the

 documents created and provided to them by Security Benefit. Id. at 183-84

 ¶ 84.

                2. “Backcasting” Proprietary Indices’ Performance

         “Backcasting” is a methodology used to assess annuity performance by

 looking at a selective period of an asset’s past performance to project its future

 returns. The proprietary indices used by Security Benefit were relatively new,

 but Security Benefit used backcasted past performance data for periods

 predating their creation. Security Benefit’s backcasted data allegedly relied on

 indices as they become relevant in our analysis of Plaintiffs’ allegations and
 the district court’s dismissal order.

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 “cherry-picked” periods when the proprietary indices’ assets showed

 uncommonly high gains. See Aplt. App. vol. 1 at 174 ¶ 62. According to

 Plaintiffs, this representation of the proprietary indices’ backcasted

 performance was misleading, inaccurately representing outsized future

 returns. Security Benefit also assumed a 100% participation rate over the

 backcasted period. This assumption was false, Plaintiffs allege, because

 “hedging costs associated with . . . market conditions would preclude” full

 participation in the proprietary indices. Id. at 174 ¶ 64. According to the

 complaint, Security Benefit thus misleadingly suggested Plaintiffs would

 receive future returns that could not actually be achieved. See id. at 174-75

 ¶ 65.

                           3. Volatility Control Overlay

         A volatility control overlay is a feature designed to prevent price

 variation in “assets encompassed by [an] index.” Aplt. App. vol. 1 at 168 ¶ 46.

 For example, high volatility means a stock’s price moves up and down in wide

 ranges within a short period of time. Lower volatility means the price changes

 at a slower, more gradual pace. In preventing price variation, the volatility

 control overlay is designed to protect investors from losses caused by asset

 volatility.

         Plaintiffs claim Security Benefit made misrepresentations and omitted

 material information about the volatility control overlay feature of its annuity

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 products and how it affected their investments. For example, Security Benefit

 allegedly misrepresented that the volatility control overlay benefited Plaintiffs

 and other consumers who purchased the annuity products. However, Security

 Benefit’s volatility control overlay offered Plaintiffs no benefit because the

 annuity products actually had a 0% interest floor. This means the owner never

 lost his initial investment. Security Benefit also failed to disclose that the

 volatility control overlay actually reduced Plaintiffs’ investment returns. And

 the volatility control overlay increased a fee, called an “index cost spread,” that

 Plaintiffs had to pay Security Benefit. Id. at 186 ¶ 91. According to Plaintiffs,

 Security Benefit made these misrepresentations and omissions in various

 documents described in the complaint.

          C. Security Benefit’s Misrepresentations & Omissions
                       About the Annuity Products

       Plaintiffs claim Security Benefit fraudulently induced them to purchase

 their annuity products using two types of documents. These materials

 allegedly misrepresented that the annuity products would yield favorable

 investment returns. What these documents said—or failed to say—about the

 annuity products is central to Plaintiffs’ claims.

                             1. Marketing Materials

       Security Benefit allegedly induced Plaintiffs to purchase annuity

 products by using misleading marketing materials. According to Plaintiffs,

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 Security Benefit created backcasted performance data, then used it to

 hypothetically illustrate the proprietary indices’ performance, and included

 those hypothetical illustrations, derived from backcasted data, in its

 marketing materials to represent favorable future returns.

       The marketing materials also compared the proprietary indices’

 performance to lower-performing, non-proprietary indices like the Standard &

 Poor’s 500 and Russell 1000. These comparisons allegedly created a false

 choice, incentivizing consumers to allocate their premiums to Security

 Benefit’s proprietary indices. Plaintiffs claim Security Benefit’s misleading

 representation that the proprietary indices were uncapped and had a 100%

 participation rate further heightened the contrast between the proprietary and

 non-proprietary indices’ performance.

                          2. Statements of Understanding

       A Statement of Understanding is a document Security Benefit provided

 to the consumer at the time of sale that describes the annuity product and its

 features. Security Benefit required the purchaser of an annuity product to sign

 a Statement of Understanding; these documents were also available to

 consumers online. According to Plaintiffs, the Statements of Understanding

 made material misrepresentations and omitted material facts about the

 proprietary indices.

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        For example, the Statement of Understanding about the “5-Year Annuity

  Linked TV Index” (“ALTV Index”) did not disclose how various features of the

  Total Value Annuity offset the ALTV Index’s below-market returns and

  negatively affected the ALTV Index’s performance. The ALTV Index Statement

  of Understanding also did not disclose that the Index was designed using a

  selective, backcasted performance period. Along with these omissions, the

  ALTV Index Statement of Understanding allegedly misrepresented the

  benefits of the volatility control overlay. According to Plaintiffs, the volatility

  control overlay actually worked to reduce the proprietary indices’ participation

  rates. Security Benefit further misrepresented investors would benefit from

  allocating their premiums to the ALTV Index because it was not tied to equity

  and bond markets—but this actually reduced investors’ returns.5

                              D. Procedural History

        In November 2019, Plaintiff Clinton sued Security Benefit on behalf of

  herself and others similarly situated in federal district court in the Southern

  District of Florida. Plaintiff Clinton alleged Security Benefit devised a

  fraudulent scheme to develop and sell equity-indexed deferred annuities that

  it knew would produce near-zero returns for consumers and relied on allegedly

        The complaint makes similar allegations about other Statements of
        5

  Understanding    provided    to   Plaintiffs,  which     also  contained
  misrepresentations or omissions about the proprietary indices.

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  deceptive marketing practices to induce consumers to purchase these annuity

  products. See generally Class Action Complaint, Clinton v. Sec. Benefit Life Ins.

  Co., 519 F. Supp. 3d 943 (D. Kan. 2021) (Case No. 5:20-cv-0438-HLT-KGG),

  ECF No. 1. The company linked the annuities’ performance to recently created,

  synthetic proprietary indices instead of to traditional markets like the

  Standard & Poor’s 500. To fraudulently induce consumers’ purchase of the

  annuity products, Security Benefit used marketing materials and the

  Statements of Understanding that contained misrepresentations and

  omissions about how the proprietary indices operated and were expected to

  perform. Security Benefit’s alleged conduct, Plaintiff Clinton claimed, violated

  RICO, 18 U.S.C. § 1962(c) and (d). Plaintiff Clinton alleged the annuity

  products’ costs, fees, and “performance dampening features” operated

  collectively to offset the proprietary indices’ returns, and that Security Benefit

  did not disclose the “collective impact” of these features on consumers’

  investments. Class Action Complaint, Clinton, 519 F. Supp. 3d 943, ECF No. 1

  at 23 ¶ 81.

        In January 2020, Plaintiffs amended their complaint to add additional

  plaintiffs and claims under RICO, 18 U.S.C. § 1962(c) and (d), along with

  consumer protection, unfair competition, and common law fraud claims under

  California, Illinois, Arizona, and Nevada state law. See Aplt. App. vol. 1 at 155.

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        Security Benefit moved to dismiss, contending the complaint failed to

  plead plausible fraud claims with particularity.6 Aplt. App. vol. 7 at 1870-78.

  This action was then transferred to the District of Kansas under 28 U.S.C.

  § 1404.7 In February 2021, the district court dismissed the complaint without

  prejudice.8 Aplt. App. vol. 8 at 1972-73. This timely appeal followed.

        6 Security Benefit also argued in its motion to dismiss that the
  McCarran-Ferguson Act barred Plaintiffs’ RICO claims. The district court
  concluded the McCarran-Ferguson Act did not reverse-preempt Plaintiffs’
  RICO claims. The district court’s ruling on this issue is not before us on
  appeal.

        7 Security Benefit asked to transfer the case to federal district court
  in Kansas, contending that was a more convenient forum. The district court
  granted the motion because the lawsuit could originally have been brought
  in the District of Kansas, for the “convenience of the parties and witnesses”
  and “in the interest of justice.” R. & R. on Def.’s Mot. to Transfer, Clinton,
  519 F. Supp. 3d 943 (Case No. 5:20-cv-0438-HLT-KGG), ECF No. 73 at 3
  (citing 28 U.S.C. § 1404(a)); Order, ECF No. 75 (adopting magistrate judge’s
  report and recommendation to transfer).

        8 In 2019, the district court dismissed an action by a different named
  plaintiff alleging RICO claims against Security Benefit. See Ogles v. Sec.
  Benefit Life Ins. Co., 401 F. Supp. 3d 1210 (D. Kan. 2019). There, the district
  court concluded the plaintiff’s “RICO theory alleging the fraudulent design
  of the [Total Value Annuity] is dismissed for failure to state a claim under
  Rule 12(b)(6),” id. at 1213, because the plaintiff had “not pleaded mail and
  wire fraud with sufficient particularity to state a valid RICO claim,” id.
  at 1228 n.21. The plaintiff in Ogles did not appeal the dismissal order.

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                                         II

                                    Discussion

                           A. Appellate Jurisdiction

        We must first determine whether the dismissal of the complaint

  without prejudice was a “final decision” over which we have appellate

  jurisdiction. See 28 U.S.C. § 1291. “Although neither party challenges our

  appellate jurisdiction, we have an independent duty to examine our own

  jurisdiction.” Amazon, Inc. v. Dirt Camp, Inc., 273 F.3d 1271, 1274 (10th

  Cir. 2001) (citation omitted).

        “A dismissal of the complaint is ordinarily a non-final, nonappealable

  order (since amendment would generally be available), while a dismissal of

  the entire action is ordinarily final.” Moya v. Schollenbarger, 465 F.3d 444,

  449 (10th Cir. 2006) (citation omitted). We scrutinize complaint dismissals

  “to pinpoint those situations wherein, in a practical sense, the district court

  by its order has dismissed a plaintiff’s action as well.” Id. (citation omitted).

  In doing so, we “look to the substance and objective intent of the district

  court’s order, not just its terminology.” Id. (emphasis omitted).

        The district court did “not grant leave to amend” and dismissed the

  complaint “without prejudice.” Aplt. App. vol. 8 at 1972 n.14. It then entered

  judgment and “closed” the case. Id. at 1974. A dismissal without prejudice

  is “usually not a final decision.” Amazon, 273 F.3d at 1275. But as Plaintiffs

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  correctly contend, a dismissal without prejudice may be a final decision

  where the district court dismisses the action as well. See Moya, 465 F.3d

  at 449. Here, the district court denied leave to amend, entered judgment for

  Security Benefit, and closed the case. Under the circumstances, this

  indicates the district court’s objective intent to dismiss the entire action.

  See id. at 448-49; accord Lewis v. Clark, 577 F. App’x 786, 792 (10th Cir.

  2014) (unpublished) (holding that order dismissing a complaint without

  prejudice for failure to state a claim was a final dismissal of the action

  because the court did not grant leave to amend and declared “this case is

  closed”). We thus conclude the order dismissing the complaint without

  prejudice disposed of the entire action and rendered the decision final under

  § 1291. We have jurisdiction and proceed to the merits.

         B. The district court erred in dismissing the complaint.

        The district court dismissed Plaintiffs’ complaint on two grounds; both

  are challenged in this appeal. First, we consider the district court’s

  conclusion that the complaint did not satisfy Federal Rule of Civil

  Procedure 9(b)’s particularity standard. We next consider the district

  court’s conclusion that Plaintiffs’ claims were implausible under Federal

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  Rule of Civil Procedure 12(b)(6).9 As we explain, we agree with Plaintiffs

  that the district court committed reversible error.

                               1. Standard of Review

        We review de novo the dismissal of a complaint under Rule 12(b)(6).

  Childs v. Miller, 713 F.3d 1262, 1264 (10th Cir. 2013). “The dismissal of a

  complaint . . . for failing to satisfy the requirements of Rule 9(b) is treated

  as a dismissal for failure to state a claim” under Rule 12(b)(6). Seattle-First

  Nat’l Bank v. Carlstedt, 800 F.2d 1008, 1011 (10th Cir. 1986) (citation

  omitted).

        To survive a Rule 12(b)(6) motion to dismiss, a complaint must allege

  facts that, if true, “state a claim to relief that is plausible on its face.”

  Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

  Twombly, 550 U.S. 544, 570 (2007)). We have explained that, when Iqbal

  speaks of a claim’s facial plausibility, the complaint must plead “factual

  content that allows the court to draw the reasonable inference that the

        9We have never prescribed an order-of-operations for the analysis of
  fraud-based claims under Rules 9(b) and 12(b)(6), nor would it be prudent
  to do so. But here, where a plaintiff must plead “with particularity the
  circumstances constituting” the predicate acts of mail and wire fraud, see
  Fed. R. Civ. P. 9(b), we first determine if the complaint has satisfied
  Rule 9(b), and if so satisfied, we next consider, on the basis of the
  particularized allegations, whether the complaint alleges a facially
  plausible claim for relief, see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

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  defendant is liable for the misconduct alleged.” Hogan v. Winder, 762 F.3d

  1096, 1104 (10th Cir. 2014) (quoting Iqbal, 556 U.S. at 678).

        In reviewing an order granting a motion to dismiss, our role is like

  the district court’s: we accept the well-pleaded facts alleged as true and view

  them in the light most favorable to the plaintiff, see Mayfield v. Bethards,

  826 F.3d 1252, 1255 (10th Cir. 2016), but need not accept “[t]hreadbare

  recitals of the elements of a cause of action [that are] supported by mere

  conclusory statements,” Iqbal, 556 U.S. at 678 (citation omitted), or

  allegations plainly contradicted by properly considered documents or

  exhibits, Farrell-Cooper Mining Co. v. U.S. Dep’t of the Interior, 728 F.3d

  1229, 1237 n.6 (10th Cir. 2013).10 “An allegation is conclusory where it

  states an inference without stating underlying facts or is devoid of any

        10  The dissent appears convinced this case can be decided by
  identifying what it believes to be contradictions between “the contents of
  the sales documents” and the “specific allegations of the complaint.” Dissent
  at 2. We reiterate our agreement, as a general matter, that courts need not
  accept “allegations that contradict a properly considered document.”
  Farrell-Cooper, 728 F.3d at 1237 n.6 (citation omitted). We disagree,
  however, with the dissent’s suggestion this principle is dispositive in this
  case. This is not, for example, Kramer v. Time Warner Inc., 937 F.2d 767
  (2d Cir. 1991), cited as analogous by the dissent at 2. There, the complaint
  alleged that the proposed merger consideration was said to “consist of cash,
  at least in part.” 937 F.2d at 775. However, when reviewing the actual offer
  to purchase, the Second Circuit found the document “stated that the
  consideration would consist of ‘cash or debt or equity securities.’” Id.
  (emphases added). There was thus a plain contradiction between what the
  complaint alleged and what the document said—one we cannot discern in
  this case, as we will explain.

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  factual enhancement.” Brooks v. Mentor Worldwide LLC, 985 F.3d 1272,

  1281 (10th Cir. 2021) (citation omitted). “The nature and specificity of the

  allegations required to state a plausible claim will vary based on context.”

  Kan. Penn Gaming, LLC v. Collins, 656 F.3d 1210, 1215 (10th Cir. 2011)

  (citation omitted). Our task is to consider the complaint’s allegations “taken

  as a whole.” U.S. ex rel. Lemmon v. Envirocare of Utah, Inc., 614 F.3d 1163,

  1173 (10th Cir. 2010) (citation omitted); see also Twombly, 550 U.S. at 569

  n.14; George v. Urb. Settlement Servs., 833 F.3d 1242, 1257 (10th Cir. 2016);

  cf. In re Hain Celestial Group, Inc. Securities Litigation, 20 F.4th 131, 137-

  38 (2d Cir. 2021) (directing district court to “consider cumulative effect of

  the circumstantial allegations” when weighing scienter in securities fraud

  case).

           And like the district court, we may consider certain documents outside

  the four corners of the complaint. See, e.g., Smith v. United States, 561 F.3d

  1090, 1098 (10th Cir. 2009) (citation omitted). “Generally, a court considers

  only the contents of the complaint when ruling on a 12(b)(6) motion,” but

  “[e]xceptions to this general rule include the following: documents

  incorporated by reference in the complaint; documents referred to in and

  central to the complaint, when no party disputes its authenticity; and

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  ‘matters of which a court may take judicial notice.’” Berneike v.

  CitiMortgage, Inc., 708 F.3d 1141, 1146 (10th Cir. 2013) (citation omitted).11

        “[G]ranting [a] motion to dismiss is a harsh remedy which must be

  cautiously studied, not only to effectuate the spirit of the liberal rules of

  pleading but also to protect the interests of justice.” Dias v. City & Cnty. of

  Denver, 567 F.3d 1169, 1178 (10th Cir. 2009) (second alteration in original)

  (citation omitted). There is a “low bar for surviving a motion to dismiss,”

  Quintana v. Santa Fe Cnty. Bd. of Comm’rs, 973 F.3d 1022, 1034 (10th Cir.

  2020), and “a well-pleaded complaint may proceed even if it strikes a savvy

  judge that actual proof of those facts is improbable, and ‘that a recovery is

  very remote and unlikely,’” Dias, 567 F.3d at 1178 (quoting Twombly, 550

  U.S. at 556); see also Woods v. City of Greensboro, 855 F.3d 639, 652

  (4th Cir. 2017) (“Whether [a plaintiff] will have a difficult time establishing

  the merits of its claim is of little import now.”).12

        11At the request of the parties, the district court took judicial notice
  of certain documents under Federal Rule of Evidence 201 that were
  referenced in the complaint or publicly accessible and of undisputed
  authenticity. We conclude all of the judicially noticed documents considered
  by the district court fall appropriately within the four “exceptions”
  contemplated by Berneike, 708 F.3d at 1146, and the parties have never
  argued otherwise. Accordingly, we will consider the judicially noticed
  materials in our review of the dismissal order.

         Besides acknowledging “the long-established proposition that on a
        12

  motion to dismiss a complaint the court should accept as true all well-
  pleaded factual allegations in the complaint,” the dissent does not engage

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       2. The district court erred in dismissing the complaint for failing to
                      satisfy Rule 9(b)’s particularity standard.

        Plaintiffs allege Security Benefit violated the federal RICO statute,

  which makes it “unlawful for any person employed by or associated with

  any enterprise engaged in, or the activities of which affect, interstate or

  foreign commerce, to conduct or participate, directly or indirectly, in the

  with the standards on a motion to dismiss. Dissent at 1. Perhaps this leads
  the dissent to a misimpression about the court’s opinion. For example:

      We do not “accept specific allegations of the complaint as
       gospel.” Dissent at 2. In reviewing the motion to dismiss, we do
       accept well-pled allegations as true and draw reasonable
       inferences in favor of the Plaintiffs, as the Federal Rules and
       our precedents command.

      We do not accept “Plaintiffs’ allegations . . . that Security
       Benefit’s backcasting was deceptive.” Dissent at 4. We do
       conclude these arguments were advanced with legal sufficiency
       while declining “to weigh potential evidence that the parties
       might present at trial.” Peterson v. Grisham, 594 F.3d 723, 727
       (10th Cir. 2010).

      And we do not “endorse[] the complaint’s allegation that
       Security Benefit was deceptive in stating that its investment
       products are not capped.” Dissent at 6. We do find Plaintiffs’
       complaint advanced sufficient “[f]actual allegations . . . to raise
       the right to relief above the speculative level.” Twombly, 550
       U.S. at 555.

  The dissent’s disagreement with the disposition appears to rest in good
  measure on conjecture that Plaintiffs will be unable to prove their claims.
  But the ultimate merits of Plaintiffs’ case is not the question before us.
  Rule 9(b) demands “particularity,” not proof. Fed. R. Civ. P. 9(b). And at the
  motion to dismiss stage, we are assessing the complaint only for legal
  sufficiency to state a claim, which means we do not “weigh potential
  evidence that the parties might present at trial.” Smith, 561 F.3d at 1098.

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  conduct of such enterprise’s affairs through a pattern of racketeering

  activity or collection of unlawful debt.” 18 U.S.C. § 1962(c).

        According to Plaintiffs, Security Benefit committed mail fraud in

  violation of 18 U.S.C. § 1341 and wire fraud in violation of 18 U.S.C. § 1343.

  There is no dispute both mail and wire fraud are racketeering activities

  under RICO. See 18 U.S.C. § 1961(1)(B) (defining “racketeering activity” to

  include violations of 18 U.S.C. §§ 1341 and 1343). Rule 9(b) states: “In

  alleging fraud or mistake, a party must state with particularity the

  circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). “The

  particularity requirement of Rule 9(b) . . . applies to claims of mail and wire

  fraud.” Tal v. Hogan, 453 F.3d 1244, 1263 (10th Cir. 2006); accord George,

  833 F.3d at 1254. Therefore, as the district court correctly determined,

  Plaintiffs must plead “with particularity the circumstances constituting”

  Security Benefit’s alleged mail and wire fraud. Fed. R. Civ. P. 9(b).

        “Rule 9(b)’s purpose is ‘to afford [a] defendant fair notice’ of a

  plaintiff’s claims and the factual grounds supporting those claims.” George,

  833 F.3d at 1255 (alteration in original) (citation omitted). “[T]he most basic

  consideration for a federal court in making a judgment as to the sufficiency

  of a pleading for purposes of Rule 9(b) . . . is the determination of how much

  detail is necessary to give adequate notice to an adverse party and enable

  that party to prepare a responsive pleading.” Lemmon, 614 F.3d at 1172

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  (second alteration in original) (quoting 5A Charles Alan Wright & Arthur

  R. Miller, Federal Practice and Procedure § 1298 (4th ed. 2022)).13

        We have held that, to adequately plead mail and wire fraud under

  Rule 9(b), Plaintiffs must allege “the time, place and contents of the false

  representations, the identity of the party making the false statements, and

  the consequences” of the false representations. George, 833 F.3d at 1254

  (quoting Koch v. Koch Indus., 203 F.3d 1202, 1236 (10th Cir. 2000)); accord

  Tal, 453 F.3d at 1265 (complaint satisfied Rule 9(b) when it “identified the

  parties, the dates, the content of the communications, [and] how they were

  allegedly fraudulent”). Put differently, a complaint stating the “who, what,

  where, when, and how” of the alleged fraud gives a defendant the requisite

  level of notice required under Rule 9(b).

        The district court determined Plaintiffs’ fraud allegations were not

  sufficiently particularized, concluding, “[a]lthough the first amended

  complaint expounds at length on Plaintiffs’ theory that [Security Benefit]

  fraudulently developed and marketed the equity-indexed annuities while

  using the mail and wires, less prevalent are any specific details of the ‘time,

        13Security Benefit claims Lemmon is inapposite because it involves
  the “unique” setting of the False Claims Act (“FCA”). We are not persuaded.
  While Lemmon applied Rule 9(b) in the context of FCA claims, our Rule 9(b)
  analysis was not limited to a specific statutory context and applies with
  equal force here. See Lemmon, 614 F.3d at 1171-72.

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  place and contents of the false representation[s].’” Aplt. App. vol. 8 at 1964

  (alteration in original) (quoting George, 833 F.3d at 1254). On appeal,

  Plaintiffs contend the district court erred because the complaint states

  sufficient factual content to satisfy Rule 9(b)’s pleading standard.

  Reviewing de novo, we agree.14

        Plaintiffs allege Security Benefit fraudulently misrepresented the

  attributes and performance of its proprietary indices using the marketing

  materials and Statements of Understanding.15 Regarding the “who” and

        14Security Benefit insists Plaintiffs seek the application of a relaxed
  particularity standard. Aplee. Br. at 46. That is not how we read the
  arguments on appeal. In any event, our law concerning Rule 9(b)’s pleading
  standard is settled, and we apply it here. See George, 833 F.3d at 1254.

        15Plaintiffs contend for the first time on appeal that Security Benefit’s
  policy contracts are themselves misleading. Aplt. Br. at 18. The record
  confirms Plaintiffs never alleged Security Benefit made misrepresentations
  in the policy contracts, in addition to in their marketing materials and
  Statements of Understanding. See Aplt. App. vol. 7 at 1892 n.2. For
  example, in opposing Security Benefit’s motion to dismiss in the district
  court, Plaintiffs said “[we] do not challenge the validity of or
  representations in the policy contracts themselves. Instead, Plaintiffs allege
  that the . . . marketing materials, sales illustrations and [Statements of
  Understanding] are false and misleading because they contain half-truths
  and omit material facts.” Id. at 1892 n.2. By asking this court to proceed in
  the face of such inconsistency, Plaintiffs seem to invite error. See John Zink
  Co. v. Zink, 241 F.3d 1256, 1259 (10th Cir. 2001) (concluding the invited
  error doctrine applied where appellants’ argument was “a complete reversal
  from the position they asserted” below, and therefore appellants could not
  seek “reversal on the ground that the requested action was error” (citation
  omitted)). Under these circumstances, we do not reach Plaintiffs’ first-
  instance appellate argument concerning the policy contracts.

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  “when” of the alleged fraud, the complaint states Security Benefit delivered

  the Statements of Understanding to purchasers of the annuity products and

  required purchasers to sign the Statements with the insurance agent who

  made the sale. Documents central to Plaintiffs’ claims, incorporated by

  reference in the complaint, are fully consistent with this allegation. These

  documents show the specific date when each Plaintiff signed their

  Statement of Understanding, along with the signatures of the individual

  agents who secured the annuity products’ sale.

        The    district   court   concluded   Plaintiffs   failed   to   set   forth

  particularized details of when Security Benefit made the allegedly false

  representations. But the district court did not account for the specific dates

  in the Statements of Understanding—documents it had judicially noticed

  because Plaintiffs “explicitly reference[d]” the Statements throughout their

  complaint, and because the Statements are central to Plaintiffs’ claims.

  Aplt. App. vol. 1 at 252, vol. 8 at 1950. The dates in the Statements of

  Understanding are consistent with the allegations in the complaint

  concerning when Security Benefit allegedly induced each Plaintiff to

  purchase the annuity products. The complaint also details that Security

  Benefit created the allegedly misleading Statements of Understanding, and

  the marketing materials, and controlled the dissemination of these

  documents. See Schwartz v. Celestial Seasonings, Inc., 124 F.3d 1246, 1253

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  (10th Cir. 1997) (“Rule 9(b) requires that a complaint set forth the identity

  of the party making the false statements” and “give notice to the defendants

  of the fraudulent statements for which they are alleged to be responsible.”

  (citations omitted)).

        As to “where” Security Benefit’s allegedly false representations were

  made, Plaintiffs allege Security Benefit induced them to purchase its

  annuity products using its allegedly misleading sales documents and

  Statements of Understanding at the point of sale in specific locations—

  namely, Florida, California, Illinois, Arizona, and Nevada. And the

  complaint alleges Security Benefit’s misrepresentations were found in its

  marketing materials and the Statements of Understanding that Plaintiffs

  signed. See id. at 1252 (concluding a complaint “adequately identifie[d] the

  time, place, and contents” of allegedly fraudulent statements by identifying

  “the documents, press releases, and other communications which

  contain[ed] the statements”); see also Cooper v. Pickett, 137 F.3d 616, 627

  (9th Cir. 1997) (determining plaintiffs’ complaint identified the “where” for

  Rule 9(b) by alleging fraudulent statements were made in quarterly

  financial statements). At Security Benefit’s request, the district court

  properly took judicial notice of the marketing brochures because those

  brochures were referenced in the complaint. See Aplt. App. vol. 1 at 252-53

  (stating in request for judicial notice that “Plaintiffs’ [complaint] also

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  references and cites directly to the marketing brochures for each of the

  three indices” and that the “TVBI Brochure . . . was a marketing brochure

  allegedly presented at the point of sale to [one plaintiff] . . . and it is

  referenced in the [complaint]”).

        The complaint also sufficiently identifies the “what” and the “how”—

  the content of Security Benefit’s Statements of Understanding and

  marketing materials and in what way they were allegedly fraudulent.16 See,

  e.g., Tal, 453 F.3d at 1265 (finding complaint which “identified the parties,

  the dates, the content of the communications, how they were allegedly

  fraudulent and how they furthered the fraudulent enterprise” satisfied

  Rule 9(b)). For instance, the complaint alleges Security Benefit represented

  the proprietary indices were uncapped and had a 100% participation rate.

        16 The dissent has concluded Plaintiffs’ allegations lack merit and
  finds “there is nothing false or misleading about the . . . sales documents.”
  Dissent at 3. But the “bedrock principle” at this stage is “that a judge ruling
  on a motion to dismiss must accept all allegations as true and may not
  dismiss on the ground that it appears unlikely the allegations can be
  proven.” Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008).
  Indeed, where, as here, the plausibility and particularity pleading
  standards are satisfied, “[a] Rule 12(b)(6) motion to dismiss is not a suitable
  procedure for determining that these documents could not possibly have
  been misleading.” Bible v. United Student Aid Funds, Inc., 799 F.3d 633,
  658 (7th Cir. 2015) (emphasis added) (holding plaintiff in civil RICO case
  plausibly alleged mail and wire fraud for purposes of Rule 12(b)(6); though
  company’s written communications might be literally true, they could be
  misleading where additional information was concealed or where the
  language in the written materials “could reasonably be understood as
  implying” something other than the disclosed information itself).

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  But this is misleading, Plaintiffs have pleaded, because Security Benefit

  failed to disclose the cumulatively negative effect—the “collective impact”—

  of the annuity products’ so-called “performance dampening features.” See

  Aplt. App. vol. 1 at 185 ¶ 89. The complaint also alleges Security Benefit

  failed to disclose how the volatility control overlay worked in practice to

  reduce participation rates. Plaintiffs detail how Security Benefit used

  backcasted historical data to create hypothetical illustrations projecting the

  proprietary indices’ future gains. However, this data—and the future

  returns the data projected—were misleading because, as Plaintiffs allege,

  Security Benefit used “cherry-picked” performance periods that exhibited

  non-representative gains for the proprietary indices. Id. at 174 ¶ 64.

  According to Plaintiffs, Security Benefit also assumed a 100% participation

  rate over the backcasted period, which was misleading because it was

  impossible for 100% of the gain in the index to be credited to the annuity

  during that period.

        Plaintiffs also have alleged, as they must, the “injuries they suffered

  as a result” of Security Benefit’s fraudulent misrepresentations. George, 833

  F.3d at 1256. For instance, Plaintiff Clinton purchased five Total Value

  Annuities for $100,000 each, then allocated all $500,000 of her investment

  to Security Benefit’s proprietary “BNP Paribas High Dividend Plus Annual

  Point to Point Index Account – Year 2” (“BNP Index”). She was credited at

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  the end of a two-year annuity period with 0.00% interest. She also lost the

  use of her $500,000 investment allocated to the BNP Index. Plaintiff Clinton

  suffered additional harm because her annuities were allegedly worth less

  than what she paid for them on the day they were issued to her. The

  complaint contains similar allegations about the harm sustained by the

  remaining Plaintiffs. Except for Plaintiff Rosen, who received 1.68%

  interest on his investment from the “Morgan Stanley Dynamic Allocation

  Index Account” (“Morgan Stanley Index”), all Plaintiffs received 0.00%

  interest at the end of their annuity periods for the investments they made

  in annuity products linked to the proprietary indices used by Security

  Benefit.

        Not all Plaintiffs’ allegations satisfy Rule 9(b), however. While the

  complaint specified with particularity when Security Benefit allegedly

  made misrepresentations in the Statements of Understanding, the same

  cannot be said of misrepresentations made in the marketing materials,

  except for one allegation regarding a sales illustration prepared for Plaintiff

  Webber on April 22, 2014. See Koch, 203 F.3d at 1237 (determining alleged

  misrepresentations made “during 1982 and continuing to the present time”

  did not “alert the [d]efendants to a sufficiently precise time frame to satisfy

  Rule 9(b)”).

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        But, as we have previously recognized, not every allegation of

  fraudulent misconduct must be pleaded with particularity for a complaint

  to survive at the motion to dismiss stage. See George, 833 F.3d at 1257. In

  George, some allegations only “generally allege[d]” that one plaintiff

  “sometimes on specific dates, made phone calls to [a defendant], [and] spoke

  with unidentified [defendant] employees who made false representations to

  him via phone” and “through the mail.” Id. at 1255. We concluded these

  “general allegations” did not suffice under Rule 9(b). Id. at 1256. However,

  other allegations were sufficiently particular because, for instance, they

  identified a defendant’s employees “by name,” specified “the dates when

  those employees made allegedly false statements, identif[ied] the actions

  the plaintiffs took in reliance on those misrepresentations, [and] detail[ed]

  the injuries they suffered as a result.” Id.

        Under those circumstances, we concluded that even where “not all of

  the plaintiffs’ allegations” are pleaded with particularity, id. at 1255

  (emphasis added), a complaint may nonetheless satisfy Rule 9(b)’s

  requirements when its allegations are sufficiently particularized when

  “taken as a whole,” id. at 1257 (emphasis added) (citation omitted). So too

  here. George teaches that, in evaluating the particularity of fraud

  allegations under Rule 9(b), we must ask whether the complaint, taken as

  a whole, “sufficiently apprise[s]” the defendant of its involvement in the

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  alleged fraudulent conduct. Id. (citation omitted); see also U.S. ex rel. Heath

  v. AT & T, Inc., 791 F.3d 112, 125 (D.C. Cir. 2015) (“Rule 9(b) does not

  inflexibly dictate adherence to a preordained checklist of ‘must have’

  allegations.”). Here, reviewing de novo, and reading the complaint in its

  entirety, we conclude that it does. Plaintiffs have satisfied Rule 9(b)’s

  requirements, and the district court erred in concluding otherwise.

   3. The district court also erred in dismissing the complaint for failing to
                     allege facially plausible claims for relief.
        We next consider whether Plaintiffs have stated facially plausible

  fraud claims. See Iqbal, 556 U.S. at 678. Rule 9(b) needs to be read

  harmoniously with the rules of notice pleading. Although Plaintiffs’

  allegations are sufficiently particularized under Rule 9(b), the complaint

  must also include “factual content that allows the court to draw the

  reasonable inference that the defendant is liable for the misconduct

  alleged.” Id. (citation omitted); see also Wright & Miller, supra (“[O]ne

  cannot focus exclusively on the fact that Rule 9(b) requires particularity in

  pleading the circumstances of fraud without taking account . . . the

  strictures of plausibility pleading.”) (footnote omitted). Facial plausibility

  means the complaint must offer sufficient factual allegations “to raise a

  right to relief above the speculative level.” Twombly, 550 U.S. at 555; see

  also Llacua v. W. Range Ass’n, 930 F.3d 1161, 1177 (10th Cir. 2019) (“The

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  question is whether, if the allegations are true, it is plausible and not

  merely possible that the plaintiff may obtain relief.” (citation omitted)).

        The district court determined the complaint “lack[ed] plausibility”

  because Plaintiffs failed to set forth “sufficient facts from which an

  inference of fraud can be drawn.” Aplt. App. vol. 8 at 1965. In making its

  determination, the district court focused primarily on four alleged

  misrepresentations and omissions:

            “[T]he annuities were ‘uncapped’ and had 100% participation”
             rates, id. at 1966;

            Security Benefit used “backcasting” to create “hypothetical
             illustrations projecting the performance” of the proprietary
             indices, id. at 1967;

            “[T]hat [Security Benefit] . . . ‘misleadingly suggest[ed] that the
             volatility control overlay ha[d] a symmetrical impact on
             performance’” of the proprietary indices “when it did not,” id.
             at 1969 (quoting Aplt. App. vol. 1 at 186 ¶ 92);

            Security Benefit failed “to disclose the composition of assets in
             the ALTV Index and BPHD [BNP] Index.” Id. at 1970.

        Plaintiffs argue the district court erred in its ultimate conclusion and

  engaged in a flawed analysis by considering only a handful of allegations in

  isolation, failing to account for—or understand—the gist of the alleged

  fraudulent scheme. Security Benefit insists the district court “thoroughly

  examined” the complaint and addressed in “painstaking detail” the four

  alleged misrepresentations and omissions “at the heart of the alleged

  fraudulent scheme.” Aplee. Br. at 27. Guided by a methodical application of

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  the standard of review, we agree with Plaintiffs. Accepting the well-pleaded

  facts alleged as true and viewing them in the light most favorable to

  Plaintiffs, we conclude the complaint’s particularized allegations plausibly

  allege Security Benefit engaged in a fraudulent scheme.

        “In order to bring a [civil] RICO claim, a plaintiff must allege a

  violation of 18 U.S.C. § 1962, which consists of four elements: ‘(1) conduct

  (2) of an enterprise (3) through a pattern (4) of racketeering activity.’”

  Gillmor v. Thomas, 490 F.3d 791, 797 (10th Cir. 2007) (quoting Sedima,

  S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985)). “To establish a pattern of

  racketeering activity, [Plaintiffs] must allege at least two predicate acts.”

  George, 833 F.3d at 1254; accord Deck v. Engineered Laminates, 349 F.3d

  1253, 1257 (10th Cir. 2003) (“A pattern of racketeering activity must include

  commission of at least two predicate acts.” (citation omitted)); see also Safe

  Streets All. v. Hickenlooper, 859 F.3d 865, 882 (10th Cir. 2017) (“The [civil

  RICO] statute defines ‘racketeering activity’ to encompass dozens of state

  and federal offenses, known in RICO parlance as predicates.” (citation

  omitted)). Recall that mail and wire fraud—the claims alleged here—are

  predicate racketeering activities under RICO. See 18 U.S.C. § 1961(1)(B);

  see also George, 833 F.3d at 1254 (“As defined in 18 U.S.C. § 1961(1)(B),

  ‘racketeering activity’ includes indictable acts of mail and wire fraud as

  prohibited under 18 U.S.C. §§ 1341 and 1343, respectively.”); Bridge v.

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  Phoenix Bond & Indem. Co., 553 U.S. 639, 647 (2008) (“The term

  ‘racketeering activity’ is defined to include a host of so-called predicate acts,

  including ‘any act which is indictable under . . . section 1341 (relating to

  mail fraud).’” (alteration in original) (quoting § 1961(1)(B))); CGC Holding

  Co. v. Broad & Cassel, 773 F.3d 1076, 1088 (10th Cir. 2014) (“Section

  1961(1)(B) describes the qualifying ‘racketeering activities,’ or ‘predicate

  acts,’ which include wire fraud.”).

        To state a claim for mail and wire fraud, Plaintiffs must “plausibly

  allege ‘the existence of a scheme or artifice to defraud or obtain money or

  property by false pretenses, representations or promises.’” George, 833 F.3d

  at 1254 (citation omitted); see also United States v. Zar, 790 F.3d 1036, 1050

  (10th Cir. 2015) (“[T]his court has recognized that the first two elements of

  the mail fraud statute and the wire fraud statute [a scheme and intent to

  defraud], §§ 1341 and 1343, are identical.” (citation omitted)).17

        17Here, Plaintiffs allege Security Benefit violated the federal mail and
  wire fraud statutes to “effectuate their scheme.” Aplt. App. vol. 1 at 208
  ¶ 163. In assessing Security Benefit’s alleged mail and wire fraud in the
  civil RICO context, we look to criminal law for general guidance in
  interpreting the elements of these predicate offenses. See, e.g., Bridge, 553
  U.S. at 647 (“The term ‘racketeering activity’ [in § 1962(c)] is defined to
  include a host of so-called predicate acts, including [mail fraud]. . . . The
  gravamen of the offense is the scheme to defraud, and any ‘mailing that is
  incident to an essential part of the scheme satisfies the mailing element.’”)
  (quoting Schmuck v. United States, 489 U.S. 705, 712 (1989)); see also
  Sorensen v. Polukoff, 784 F. App’x 572, 577 (10th Cir. 2019) (unpublished)
  (stating that in review of the dismissal of a civil RICO action “[t]he elements

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        “[T]he central focus of the first element [of mail and wire fraud] is the

  existence of a scheme.” United States v. Kennedy, 64 F.3d 1465, 1475 (10th

  Cir. 1995) (citation omitted); see also United States v. Welch, 327 F.3d 1081,

  1104 (10th Cir. 2003) (“The gist of [mail and wire fraud] is a scheme to

  defraud and the use of interstate communications to further that scheme.”

  (citation omitted)). “A ‘scheme or artifice to defraud’ ‘connotes a plan or

  pattern of conduct which is intended to or is reasonably calculated to

  deceive persons of ordinary prudence and comprehension.’” United States v.

  Hanson, 41 F.3d 580, 583 (10th Cir. 1994) (citation omitted); accord Welch,

  327 F.3d at 1106; see also Zar, 790 F.3d at 1050 (“[T]he first element of wire

  [and mail] fraud is a scheme to defraud and that element includes a scheme

  to   obtain   property    by   means      of   false   or   fraudulent    pretenses,

  representations, or promises . . . .”).

        “[I]ntent to defraud” under §§ 1341 and 1343, the second element of a

  mail and wire fraud scheme, may be established “by various means.” Welch,

  327 F.3d at 1106; see also Carpenter v. United States, 484 U.S. 19, 27 (1987)

  (“Sections 1341 and 1343 reach any scheme to deprive another of money or

  of mail fraud under 18 U.S.C. § 1341 are ‘(1) a scheme or artifice to defraud
  or obtain property by means of false or fraudulent pretenses,
  representations, or promises, (2) an intent to defraud, and (3) use of the
  mails to execute the scheme.’” (footnotes omitted) (quoting United States v.
  Zander, 794 F.3d 1220, 1226 (10th Cir. 2015))).

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  property by means of false or fraudulent pretenses, representations, or

  promises.”). For instance, we have held that a scheme to defraud may

  involve the use of “material misrepresentations,” United States v. Schuler,

  458 F.3d 1148, 1153 (10th Cir. 2006), or “knowledge of a false statement,”

  United States v. Bailey, 327 F.3d 1131, 1140 (10th Cir. 2003); accord United

  States v. Kalu, 791 F.3d 1194, 1205 (10th Cir. 2015) (determining that

  “[i]ntent to defraud” under § 1341 “may be inferred from the defendant’s

  misrepresentations [or] knowledge of a false statement” (citations omitted)).

  Not every scheme to defraud will involve an affirmative falsehood. See

  United States v. Gallant, 537 F.3d 1202, 1228 (10th Cir. 2008) (“A scheme

  to   defraud   focuses    on   the   intended   end   result   and   affirmative

  misrepresentations are not essential . . . .” (citation omitted)); Kemp v. Am.

  Tel. & Tel. Co., 393 F.3d 1354, 1359 (11th Cir. 2004) (“[I]t is not necessary

  for a plaintiff to point to affirmative misstatements in order to establish the

  requisite fraudulent intent of a defendant under the mail and wire fraud

  statutes.” (citation omitted)); Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d

  1406, 1415 (3d Cir. 1991) (“The [mail fraud] scheme need not involve

  affirmative misrepresentation . . . .” (citation omitted)).

        “[A] misleading omission” also may establish the intent to defraud

  under the mail and wire fraud statutes. United States v. Cochran, 109 F.3d

  660, 665 (10th Cir. 1997) (citation omitted); see also Gallant, 537 F.3d

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  at 1228 (“Fraudulent intent is required under the statute, and ‘deceitful

  concealment of material facts may constitute actual fraud.’” (citation

  omitted)). A fiduciary relationship between parties “can trigger a duty of

  disclosure as can some other relationship of trust and confidence between

  the parties,” and when such a relationship exists “certain people must

  always disclose facts where nondisclosure could result in harm.” Cochran,

  109 F.3d at 665 (citations omitted). But “[e]ven apart from a fiduciary

  duty . . . ‘a misleading omission[] is actionable as fraud’” under the mail and

  wire fraud statutes “if it is intended to induce a false belief and resulting

  action to the advantage of the misleader and the disadvantage of the

  misled.” Id. (second alteration in original) (citation omitted); see also United

  States v. Allen, 554 F.2d 398, 410 (10th Cir. 1977) (“While the existence of

  a fiduciary duty is relevant and an ingredient in some mail fraud

  prosecutions, it is not an essential in all such cases. . . . [F]raudulent

  representations . . . may be effected by deceitful statements of half-truths

  or the concealment of material facts . . . .” (footnote omitted) (citations

  omitted)).18

        18The dissent claims the majority “adopts unprecedented notions of
  fraud.” Dissent at 1. We see nothing threateningly novel about Plaintiffs’
  allegations.

       Plaintiffs claim Security Benefit committed both mail and wire fraud,
  which are predicate racketeering activities under RICO. “RICO is to be read

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        Here, Plaintiffs claim reversal is required because the district court

  misconstrued the four misrepresentations and omissions it specifically

  analyzed and ignored other related allegations. See, e.g., Aplt. Br. at 46.

  Plaintiffs contend the complaint sufficiently pleads Security Benefit

  broadly. This is the lesson not only of Congress’ self-consciously expansive
  language and overall approach, but also of its express admonition that
  RICO is to ‘be liberally construed to effectuate its remedial purposes.’ The
  statute’s ‘remedial purposes’ are nowhere more evident than in the
  provision of a private action for those injured by racketeering activity.”
  Sedima, 473 U.S. at 497-98 (quoting Pub. L. 91-452, § 904(a), 84 Stat. 947);
  see also Safe Streets All., 859 F.3d at 881, 885 (discussing RICO’s civil
  remedies and rejecting the notion of any “hidden . . . pleading
  requirement”).

        Plaintiffs allege Security Benefit, in its marketing materials and
  Statements of Understanding, materially misrepresented the “performance
  dampening features” of its annuity products and failed to disclose the
  collective impact of these features on Plaintiffs’ investments. A fraud claim
  is plausible under these circumstances. See Restatement (Second) of Torts
  § 529 (“A representation stating the truth so far as it goes but which the
  maker knows or believes to be materially misleading because of his failure
  to state additional or qualifying matter is a fraudulent representation.”);
  see also id. cmt. b (“Whether or not a partial disclosure of the facts is a
  fraudulent misrepresentation depends upon whether the person making the
  statement knows or believes that the undisclosed facts might affect the
  recipient’s conduct in the transaction at hand. It is immaterial that the
  defendant believes that the undisclosed facts would not affect the value of
  the bargain which he is offering.”); cf. Miller v. Thane Intern., Inc., 519 F.3d
  879, 886 (9th Cir. 2008) (holding, in the securities fraud context of § 12(a)(2)
  of the Securities Act of 1933, that “statements literally true on their face
  may nonetheless be misleading when considered in context”); McMahan &
  Co. v. Wherehouse Ent., Inc., 900 F.2d 576, 579 (2d Cir. 1990) (recognizing,
  for purposes of disclosure requirements under the federal securities laws,
  “[s]ome statements, although literally accurate, can become, through their
  context and manner of presentation, devices which mislead investors”).

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  induced Plaintiffs to purchase the annuity products through “materially

  false and misleading representations and half-truths.” Aplt. App. vol. 1

  at 159 ¶ 9. According to Plaintiffs, the complaint, when taken as a whole,

  plausibly alleges Security Benefit engaged in a scheme to defraud by

  materially misrepresenting the “performance dampening features” of its

  annuity products and failing to disclose the collective impact of these

  features on Plaintiffs’ investments. Id. at 185 ¶ 89. We agree. The district

  court failed to consider the complaint as a whole, see Lemmon, 614 F.3d

  at 1173, and its analysis of the four misrepresentations and omissions in

  isolation   reveals     it    did   not   fully   account   for   Security   Benefit’s

  misrepresentations about the discrete features of the annuity products that,

  together, operated to reduce the proprietary indices’ performance. We now

  turn to the district court’s analysis of each allegation it considered and

  explain why the court erred.

         a. “Uncapped” Annuity Products & 100% Participation Rates

        The district court focused first on the alleged misrepresentations

  made by Security Benefit about the “uncapped” annuity products with 100%

  participation rates in the proprietary indices. Plaintiffs failed to allege the

  annuities were “capped,” the district court reasoned, so the complaint was

  “not clear on how” statements about the caps and 100% participation rates

  “are misleading.” Aplt. App. vol. 8 at 1966. But Plaintiffs never alleged that

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  Security Benefit actually capped its annuity products because that was not

  the problem. Aplt. Br. at 49. Rather, it was Security Benefit’s use of

  “uncapped”     terminology      without    additional    disclosures    that    was

  misleading.

        Advertised claims that an annuity offers “uncapped” rates of return

  could falsely create inflated consumer expectations of future performance.

  Here, the complaint alleged that, when marketing the annuity products to

  Plaintiffs, Security Benefit never disclosed how the annuity products’

  features, such as the excess return reductions and annual spreads,

  functioned collectively in practice to reduce the proprietary indices’

  performance and limit returns. Security Benefit’s misrepresentations and

  omissions about the collective effect of the annuity products’ features—

  which operated in practice as caps and reduced the annuity products’

  participation rates—were “critical components” of Security Benefit’s

  fraudulent scheme. Id. at 45.

        For example, while Security Benefit noted that the ALTV Index was

  based on the Trader Vic Excess Return Index and included a single sentence

  in the BNP Index brochure explaining the BNP Index was an excess return

  index, Plaintiffs allege Security Benefit never explained what an

  excess-return index is (i.e., that it subtracts the risk-free rate of return from

  the   index   returns).    Therefore,     the   excess-return   deductions     were

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  undisclosed deductions from the index returns. Any undisclosed deduction

  from index returns would render misleading a representation that the

  annuities were uncapped and had 100% participation rates. What the

  district court found lacking about Plaintiffs’ allegations reflected a

  misunderstanding of this aspect of Plaintiffs’ fraud claim.19

        The district court also determined judicially noticed documents

  contradicted the allegation that Security Benefit misrepresented the

  annuity products had a 100% participation rate. According to the district

        19The dissent seems to labor under a similar misunderstanding. At
  one point, the dissent poses several hypotheticals. One analogizes Security
  Benefit’s alleged activity to credit card marketing: “Is it fraudulent to tout
  a credit card as offering no monthly fee,” the dissent asks, “when the
  disclosed interest rate is higher than ordinary unless the credit-card
  company says that there is effectively a monthly fee because the higher
  interest rate similarly hurts the cardholder financially?” Dissent at 9.

        Respectfully, the dissent’s hypothetical is not this case. Perhaps
  somewhat more apposite would be the credit card company that “tout[s] a
  credit card as offering no monthly fee,” but fails to disclose what it might
  call a “maintenance fee” that will just so happen to be withdrawn from
  customer accounts twelve times each year.

        The dissent also asks whether a car seller is “liable for fraud for
  failing to say that [a car engine] effectively has [fuel-efficiency reducing]
  feature A because features B and C reduce the efficiency.” Dissent at 9.

        Again, we disagree that is the scenario here. More relevant might be
  the case of a car seller who provides the buyer certain favorable fuel
  economy numbers on the Monroney label but declines to mention those
  numbers might be inflated based on its own testing conditions and unlikely
  to be reproduced in the course of normal driving. Cf. In re Hyundai & Kia
  Fuel Econ. Litig., 926 F.3d 539 (9th Cir. 2019) (en banc).

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  court, a hypothetical sales illustration prepared for Plaintiff Webber and a

  Total Value Annuity Statement of Understanding expressly stated the

  annuity products were guaranteed never to go below a 50% participation

  rate and thus “belied” Plaintiffs’ allegations. Aplt. App. vol. 8 at 1966.20

        We discern no contradiction between the documents and the

  allegations.21 The complaint alleges Security Benefit marketed the annuity

  products as having a 100% participation rate in the proprietary indices.

  Plaintiffs further allege that Security Benefit did not disclose how effects of

  the annuity products’ features operated collectively to reduce the

  participation rate. This means that, notwithstanding what Security Benefit

  represented to Plaintiffs, the participation rate, in reality, could never be

  as high as 100%. That the judicially noticed documents promised the

  participation rate never would go below 50% is not inconsistent with

  Plaintiffs’ allegations that it was misleading for Security Benefit to suggest

  the participation rate ever could reach 100%. Accordingly, Plaintiffs have

  pleaded factual content to support the plausibility of the alleged fraudulent

        20 Security Benefit identifies similar language in other documents. For
  example, one Secure Income Annuity Statement of Understanding states
  “[t]he Current Participation Rate” for the Morgan Stanley Index “is 100%”
  but that Security Benefit may change the participation rate later. Aplt. App.
  vol. 7 at 1692.

         Nor, therefore, are we persuaded by the dissent’s treatment of the
        21

  same. See Dissent at 6.

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  scheme,     including        that     Security       Benefit      made       “material

  misrepresentations,” Schuler, 458 F.3d at 1153, and concealed material

  facts, see Gallant, 537 F.3d at 1228, about the “uncapped” annuity products

  and their advertised 100% participation rate.

                   b. Hypothetical Illustrations & Backcasting

        The district court next analyzed the allegations that Security Benefit

  misled Plaintiffs by using the hypothetical illustrations to project the

  proprietary indices’ potential performance. The complaint alleged these

  illustrations relied on backcasted performance data, enabling Security

  Benefit to project misleadingly high future investment returns. The district

  court concluded Plaintiffs’ allegations about backcasted data were

  implausible. This conclusion was erroneous, as we explain.

        First, the district court committed a legal error to the extent it faulted

  Plaintiffs for failing to identify a false statement in the hypothetical

  illustrations.   Recall,    a   fraudulent       scheme    requires      a   material

  misrepresentation, see Schuler, 458 F.3d at 1153, or the concealment of

  material   facts,   see    Gallant,   537     F.3d   at   1228,   but    “affirmative

  misrepresentations are not essential,” id. (citation omitted). Here, the

  complaint alleges the hypothetical illustrations created a false impression

  because they were based on backcasted data that selected the proprietary

  indices’ performance periods “to correspond with years when the ind[ices’]

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  asset components exhibited non-representative gains.” Aplt. App. vol. 1

  at 174 ¶ 64. The backcasted data did not derive from the assets’ entire

  performance period but was based only on select periods when the assets

  performed    particularly   well.   Plaintiffs   claim   depictions   of    future

  performance based on “imaginary,” backcasted performance data are

  misleading. Aplt. Br. at 51. The district court concluded Plaintiffs have done

  nothing more than simply assert the failure of the hypothetical

  illustrations’ projections to “materialize into actual returns” or “actually

  come to fruition.” Aplt. App. vol. 8 at 1968.22 We disagree. Plaintiffs have

  plausibly alleged Security Benefit’s hypothetical illustrations were based

        22The district court determined that market conditions could explain
  why the ALTV Index performed poorly. Plaintiffs argue that, in so
  concluding, the district court impermissibly drew an inference in favor of
  Security Benefit. Aplt. Br. at 56. We agree. Even if market conditions
  ultimately prove explanatory, inference drawing in favor of the defendant
  is not appropriate at the motion to dismiss stage. The complaint contains
  allegations explaining why and how Security Benefit designed its
  proprietary indices to produce near-zero returns. The district court should
  have accepted the truth of these facts, see Mayfield, 826 F.3d at 1255, rather
  than explained them away in Security Benefit’s favor. On appeal, Security
  Benefit again maintains that market conditions during the relevant period,
  not any fraudulent scheme, obviously explain why its proprietary indices
  performed poorly. See Aplee. Br. at 33-36. While courts may infer from a
  complaint’s factual content “obvious alternative explanation[s]” for the
  alleged misconduct, Iqbal, 556 U.S. at 682, we do not conclude, under the
  circumstances here, that generalized “market conditions” are such an
  obvious alternative explanation for the proprietary indices’ poor
  performance that Plaintiffs’ claims are implausible.

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  on backcasted data that misled investors and induced the purchase of the

  annuity products.

        Notwithstanding the dissent’s contrary view, a non-representative

  backcasting period can be misleading. Recall, a new proprietary index, like

  those used by Security Benefit, will lack any historical performance. If the

  index’s creator and marketers want to advertise historical performance,

  they must work backward and calculate what the index’s hypothetical value

  would have been in the past—this is what Plaintiffs call backcasting. So an

  index will have a launch date, which is the date the index was actually

  created, but it may also have a backcast period of simulated historical

  performance before that launch date. An unscrupulous company that wants

  a lackluster index to have impressive simulated historical performance

  might choose a backcast period where the index performed particularly

  well. That the company might include the worst-performing years in such a

  backcast period does not remedy the problem that the backcast period as

  selected is unrepresentative.

        The ten worst-performing years of a period in which the index would

  have performed very well could still be better than the ten best-performing

  years of a period in which the index would have performed poorly. In other

  words, the company’s selection of a start and end point is responsible for

  the relative success of the index presented. An investor looking at these

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  marketing materials would not know that the backcast period was

  unrepresentative because it is the only performance data available for the

  newly created index. When a newly created index is marketed based on a

  historically unrepresentative, cherry-picked period of performance, that

  marketing is misleading.

        Plaintiffs have plausibly alleged Security Benefit did just that. They

  alleged one of the proprietary indices had poor performance immediately

  after exiting the backcast period, which is a characteristic of backcast

  periods chosen to show abnormally high performance. Aplt. App. vol. 1

  at 176 ¶ 67 (ALTV Index declined in five years after plaintiff purchased it);

  id. at 181 ¶ 78) (post-backcast performance of the synthetic indices was near

  zero); see also Aplt. Br. at 22-23 (Citi Equities presentation used ALTV

  Index as an example of an index that underperformed immediately after

  exiting backcast period). And the Plaintiffs cited statistical analysis of the

  assets underlying the indices, which showed their expected returns were

  near zero and thus, the indices’ exceptional performance during the

  backcast period was unrepresentative. At trial, Plaintiff would need to

  present evidence to prove these claims—such as expert testimony or

  documentation     about   Security   Benefit’s   decisionmaking—but       these

  allegations will survive a motion to dismiss.

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        Second, the district court concluded the complaint lacked “factual

  support” for Plaintiffs’ allegation that the hypothetical illustrations were

  based on time periods whose performance could not be reproduced. Aplt.

  App. vol. 8 at 1968. This is incorrect. The complaint contains multiple

  allegations describing Security Benefit’s “manipulative” backcasting

  practice. No more factual detail is needed at the motion to dismiss stage to

  conclude Plaintiffs have plausibly alleged facts supporting an inference of

  fraud.

        Third, the district court determined Plaintiffs’ allegations about

  Security Benefit’s misleading backcasted data were “at odds with the

  underlying theme of Plaintiffs’ case—that [Security Benefit] knew the

  [proprietary indices] would generate ‘near-zero returns.’” Id. at 1968

  (emphasis omitted). Again, we disagree. The complaint sufficiently alleges

  Security   Benefit      sold   annuity   products   based   on   the   misleading

  hypothetical illustrations, which induced consumers to buy products and

  allocate their premiums to the proprietary indices, even though Security

  Benefit knew their indices would produce near-zero returns.

        Finally, the district court concluded Plaintiff Webber’s Total Value

  Annuity sales illustration contradicted Plaintiffs’ allegations that investors

  were “given only projections of non-attainable gains” and that the

  hypothetical illustrations were based on “cherry-picked” time periods. Id.

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  at 1969. For instance, the district court observed that Plaintiff Webber’s

  illustration is labeled “hypothetical,” id. (quoting Aplt. App. vol. 7 at 1745),

  and states “[t]he values in this illustration are not guarantees or even

  estimates of the amounts you can expect from your annuity,” id. (quoting

  Aplt. App. vol. 7 at 1747).

        Plaintiffs correctly contend the disclaimer in the hypothetical

  illustrations does not undermine the allegations that Security Benefit

  committed fraud.23 At the motion to dismiss stage, the disclaimers do not

  render implausible Plaintiffs’ claim that Security Benefit used misleading

  backcasted data to induce their purchase of the annuity products. See In re

  Flint Water Cases, 960 F.3d 303, 329 (6th Cir. 2020) (“For a document to

  contradict the complaint, it must ‘utterly discredit’ the allegations.”

  (citation omitted)).

        The district court also cited an excerpt from the sales illustration that

  used various ten-year periods to simulate investment changes in the ALTV

  Index. According to the district court, these simulations contradicted the

  complaint’s allegations that the hypothetical illustrations were based on

        23  Security Benefit identifies additional excerpts from Plaintiffs’
  signed Statements of Understanding—separate documents from the sales
  illustration the district court discussed—detailing Plaintiffs understood
  “that any [index] values shown are for explanatory purposes only and are
  not guaranteed.” E.g., Aplt. App. vol. 6 at 1473. These excerpts do not
  contradict the complaint’s allegations either.

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  backcasted performance periods. Again, we disagree. The ten-year periods

  Security Benefit used to simulate changes in the ALTV Index occurred

  within the alleged backcast period. It is a reasonable inference that the

  simulations themselves are based on the allegedly misleading backcasted

  performance data. Under these circumstances, the district court erred in

  concluding the simulations contradicted Plaintiffs’ allegations that Security

  Benefit used selective historical periods in its marketing materials to

  misleadingly illustrate the proprietary indices’ unachievable future

  performance.

        The district court also pointed to the “Guaranteed Illustrated Values”

  chart in the marketing materials, which depicted a potential 0% interest

  rate for the ALTV Index. The district court concluded the chart in this

  hypothetical illustration contradicted Plaintiffs’ allegations, because the

  chart “represent[ed] . . . exactly what [Plaintiff Webber] claims to have

  earned.” Aplt. App. vol. 8 at 1969. The district court correctly described the

  content of the chart but erred in concluding it fails to support an inference

  of fraud. The “Guaranteed Illustrated Values” chart represents the

  Standard & Poor’s 500 would perform poorly relative to Security Benefit’s

  proprietary index. Plaintiffs allege Security Benefit induced consumers to

  “purchase the [annuity products] and direct their premium dollars to the

  [proprietary indices]” by using marketing materials that depicted the

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  proprietary indices would generate returns “far exceeding the comparative

  performance of crediting options based on . . . indices like the [Standard &

  Poor’s] 500.” Aplt. App. vol. 1 at 173 ¶ 59. The “Guaranteed Illustrated

  Values” chart, therefore, does not contradict Plaintiffs’ allegations about

  Security Benefit’s use of misleading performance data to induce their

  purchase of the annuity products.24

        We conclude Plaintiffs have plausibly alleged Security Benefit

  engaged in a scheme to defraud by using misleading backcasted

  performance data in its marketing materials to induce the purchase of its

  annuity products.

                           c. Volatility Control Overlay

        The district court next analyzed a single allegation about Plaintiffs’

  claim that Security Benefit misled investors by falsely suggesting the

  volatility control overlay had a “symmetrical impact” on an index’s

  increases and decreases in price. Aplt. App. vol. 8 at 1969. Plaintiffs

  challenge the district court’s singular focus, contending the court ignored

        24On appeal, Security Benefit identifies other disclosures in Plaintiff
  Webber’s hypothetical illustration that arguably contradict Plaintiffs’
  allegations—for example, the illustration’s mention of its current
  participation rate and annual spread. However, these are summaries of the
  ALTV Index’s current and guaranteed features at the time they were
  prepared for Plaintiff Webber. They do not contradict Plaintiffs’ allegations
  that Security Benefit used misleading backcasted data to depict
  unattainable future returns for the proprietary indices.

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  other allegations about Security Benefit’s failure to disclose the cumulative,

  negative effects the volatility control overlay had on their investments.

  Plaintiffs’ argument is well taken.

        The first “problem” with Plaintiffs’ allegation, the district court

  concluded, was the ALTV Index Statement of Understanding “[did] not

  actually say that the volatility overlays have a ‘symmetrical impact.’” Aplt.

  App. vol. 8 at 1970 (emphasis added). But, as we have explained, what

  Plaintiffs must plead is a material misrepresentation, not a false statement.

  Plaintiffs have alleged the excerpt from the ALTV Index Statement of

  Understanding in the complaint “misleadingly suggests” the volatility

  control overlay had a symmetrical impact. Aplt. App. vol. 1 at 186 ¶ 92. The

  excerpt allegedly creates a false impression because the volatility control

  overlay actually adversely impacted positive gains and offered Plaintiffs no

  benefits when the index decreased in price. That the ALTV Index’s

  Statement of Understanding did not affirmatively state the volatility

  control overlay had a symmetrical impact is not a reason to conclude

  Plaintiffs’ fraud claim is implausible.

        The district court also determined the complaint “pleaded [no] facts

  to show that the volatility overlay did not operate as stated.” Aplt. App.

  vol. 8 at 1970. That is incorrect. The complaint sufficiently alleges Security

  Benefit failed to disclose the “operation, impact or import” of the volatility

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  control overlay. Aplt. App. vol. 1 at 186 ¶ 90. Plaintiffs also alleged Security

  Benefit never disclosed the volatility control overlay effectively reduced the

  ALTV Index’s participation rate. The volatility control overlay also

  allegedly had a negative impact on the index cost spreads that Plaintiffs

  paid to Security Benefit.

        In support of affirmance, Security Benefit identifies an excerpt from

  the Statements of Understanding it contends “accurately disclosed” the

  volatility control overlay’s operation, impact, and import:

        The [ALTV Index] has a volatility control overlay that is
        adjusted daily based on recent historical volatility, so that more
        volatility generally leads to a reduced exposure to the TVI and
        less volatility generally leads to more exposure. The overlay
        may thus reduce or increase the potential positive change in the
        [ALTV Index] relative to the TVI and thus may lessen or
        increase the interest that will be credited to a fixed index
        annuity allocated to the [ALTV Index] relative to one allocated
        to the TVI (which is not available). The overlay also reduces the
        cost to hedge the interest crediting risk to [Security Benefit].

  Aplee Br. at 41 (quoting, e.g., Aplt. App. vol. 6 at 1475).

        This excerpt does not contradict the allegations that Security Benefit

  failed to disclose the “operation, impact or import” of the volatility control

  overlay on their investments. It simply states the volatility control overlay

  is adjusted daily and offers comparisons between two indices. As Plaintiffs

  reasonably argue, this disclosure does not address how the volatility control

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  overlay affects the proprietary indices’ participation rates or costs

  associated with the annuity products.

        We conclude Plaintiffs have adequately alleged that Security Benefit

  made fraudulent misrepresentations regarding its volatility control overlay

  and this further supports the plausibility of the alleged fraudulent scheme.

                          d. Disclosure of Asset Allocations

        The last “allegation of fraud” the district court considered was

  Security Benefit’s failure to “disclose the composition of assets” in the

  proprietary indices. Aplt. App. vol. 8 at 1970. Plaintiffs insist Security

  Benefit did not disclose the proprietary indices’ assets or the rules it used

  to change the assets over time. According to Plaintiffs, therefore, no

  consumer could understand the proprietary indices’ risks or potential

  returns. Plaintiffs acknowledge, however, that brochures provided to them

  about two proprietary indices actually disclosed their general categories of

  assets.

        The district court found that brochures for the proprietary indices

  explained the components of each index, and Security Benefit had no duty

  to disclose additional information about the asset allocations. At bottom,

  the district court saw no “misleading impressions or half-truths . . . that

  required additional disclosures about asset allocations.” Id. at 1971. As to

  this allegation, we conclude the district court did not err.

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        Security Benefit had no duty to disclose additional information about

  the asset allocations. Plaintiffs claim Security Benefit made two

  representations that give rise to a duty to disclose additional information.

  First, the proprietary indices allowed Plaintiffs to make money when other

  indices would not. Second, the volatility control overlay affected the

  proprietary indices. They argue these representations created a duty to

  disclose “all related material facts undermining the accuracy of its

  representations.” Aplt. Br. at 70. And that failing to do so made Security

  Benefit’s representations “partial . . . half-truths.” Id.

        But Plaintiffs have not shown how the two alleged representations

  establish an intent to defraud regarding the asset allocations. Recall an

  omission may be fraudulent where a fiduciary relationship exists between

  parties, see Cochran, 109 F.3d at 665, but that “[e]ven apart from a fiduciary

  duty” a misleading omission is only actionable as fraud where “it is intended

  to induce a false belief and resulting action to the advantage of the

  misleader and the disadvantage of the misled,” id. (citation omitted).

        Here, Plaintiffs have not shown how the two alleged representations

  they identify give rise to a duty to disclose additional information. Plaintiffs

  make no argument that their relationship with Security Benefit creates a

  duty to disclose. See id. (“While a fiduciary relationship is not an essential

  element of a wire fraud [claim], it can trigger a duty of disclosure as can

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  some other relationship of trust and confidence between the parties.”

  (citations omitted)). Moreover, Plaintiffs identify nothing about the two

  representations intended to induce a “false belief” about the proprietary

  indices’ asset allocations. Gallant, 537 F.3d at 1228. As the district court

  correctly determined, Plaintiffs have not shown Security Benefit had a duty

  to disclose more information about the asset classes.

        But we must examine the whole complaint, see Lemmon, 614 F.3d

  at 1173, and determine if Plaintiffs have plausibly alleged the “central

  focus,” Kennedy, 64 F.3d at 1475, of their wire and mail fraud claims: “[A]

  scheme or artifice to defraud or obtain money or property by false pretenses,

  representations or promises.” George, 833 F.3d at 1254 (citation omitted).

  Plaintiffs have done so, and our conclusion is not disturbed because

  Plaintiffs’ allegations regarding asset composition are implausible. See also

  Kan. Penn Gaming, 656 F.3d at 1214 (“[T]o withstand a motion to dismiss,

  a complaint must have enough allegations of fact, taken as true, ‘to state a

  claim to relief that is plausible on its face.’” (emphasis added) (quoting

  Twombly, 550 U.S. at 570)). Under the applicable standard of review, the

  complaint contains enough factual content to support Plaintiffs’ claim that

  Security Benefit made material misrepresentations and omissions about

  the collective operation of the annuity products’ features—including the

  proprietary indices’ participation rates, caps, volatility control overlays,

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  and the hypothetical illustrations’ use of backcasted data—and their

  negative impact on Plaintiffs’ investments. Therefore, we conclude

  Plaintiffs have plausibly alleged “a plan or pattern of conduct which is

  intended to or is reasonably calculated to deceive,” Hanson, 41 F.3d at 583,

  using material misrepresentations, Schuler, 458 F.3d at 1153, and the

  concealment of material facts, Gallant, 537 F.3d at 1228.

        Finally, Security Benefit recites a list of “common sense” explanations

  to undermine the plausibility of Plaintiffs’ fraud allegations; for example,

  that Security Benefit would have no reason to harm its reputation in the

  marketplace by designing and selling poorly performing annuity products.

  See Aplee. Br. at 30-33. We reject Security Benefit’s invitation, at this stage,

  to draw inferences in its favor.25

        25 We note that, like the district court, the dissent at times also relies
  on impermissible defense-favorable inferences or ventures beyond the
  record before us. Information not alleged in the complaint, presented to the
  district court, or argued on appeal is simply not fair game in our review
  under Rule 12(b)(6). For example, the dissent claims we misconceive of the
  function and mechanics of the volatility overlay and explains that, in
  certain hypothetical circumstances, the volatility overlay may in fact work
  as Security Benefit alleges. Dissent at 11-13. This is precisely the sort of
  information that is not before us at this stage but that might be revealed
  during discovery. Plaintiffs, not Security Benefit, “receive[] the benefit of
  imagination” at this stage. Twombly, 550 U.S. at 563 (quoting Sanjuan v.
  Am. Bd. of Psychiatry & Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994)).

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        According to the dissent, our decision today “may stifle security

  markets,” Dissent at 1, and means “no marketer of investment products is

  safe,” Dissent at 5. The dissent sounds a false alarm. Well-settled pleading

  rules and precedents will block frivolous suits and weed out claims with no

  facial merit. Twombly, 550 U.S. at 570; cf. Tellabs, Inc. v. Makor Issues &

  Rights, Ltd., 551 U.S. 308, 322 (2007) (describing the PSLRA’s “twin goals”

  to “curb frivolous, lawyer-driven litigation, while preserving investors’

  ability to recover on meritorious claims”). Were immunity from suit our

  priority, it might require closing the courthouse doors entirely.26 But our

  law does no such thing. Cf. Krupski v. Costa Crociere S.p.A., 560 U.S. 538,

  550 (2010) (referring to the “preference expressed in the Federal Rules of

  Civil Procedure . . . for resolving disputes on their merits”); see also Woods,

  855 F.3d at 652 (“Manifestly, the rule of Iqbal/Twombly was not intended

  to serve as a federal court door-closing mechanism for arguably weak cases,

  even assuming this case fits the description of ‘arguably weak.’”).

        When reviewing the district court’s decision to dismiss a complaint,

  we make no determination of the merits of Plaintiffs’ claims. See Twombly,

  550 U.S. at 556. “Rule 12(b)(6) motions to dismiss are not designed to weigh

        26 We must disagree with the dissent that Plaintiffs’ particularized,
  facially plausible complaint presents any “abuse of the courts.” Dissent at 3.
  And we certainly cannot endorse the dissent’s suggestion that the claims
  may be “fraudulent.” Id.

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  evidence or consider the truth or falsity of an adequately pled complaint.”

  Tal, 453 F.3d at 1266. We thus decline to join the dissent in conducting an

  inquiry beyond that allowed by the current procedural stage. According to

  the dissent, “[S]uch are the vagaries of the market that [the Plaintiffs]

  probably would not be complaining if they had acquired the ALTVI-linked

  investment to begin last year.” Dissent at 15. Unlike the dissent, we will

  not speculate about the parties’ litigation motives in reviewing the district

  court’s order on appeal. Rather, we must accept the well-pleaded facts

  alleged as true, viewing them in the light most favorable to Plaintiffs.

  Having done so, we hold that Plaintiffs’ complaint survives Security

  Benefit’s Rule 12(b)(6) motion to dismiss.

                                       III

                                   Conclusion

        The district court erred in dismissing Plaintiffs’ RICO claim and their

  state-law claims for lack of particularity and plausibility. We reverse and

  remand for further proceedings consistent with this opinion.

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  21-3035, Clinton v. Security Benefit

  HARTZ, J., dissenting.

         I respectfully dissent. The majority opinion errs factually and legally. It improperly

  accepts the truth of allegations in the complaint that are contradicted by the sales

  documents on which the complaint is founded. And it adopts unprecedented notions of

  fraud that may stifle securities markets.

         Regarding the factual error, I am well aware of the long-established proposition that

  on a motion to dismiss a complaint the court should accept as true all well-pleaded factual

  allegations in the complaint. But when the complaint describes the contents of a document,

  a court must reject an allegation that misstates the contents. As this court stated not long

  ago, “[A]lthough we accept all well-pleaded allegations as true and draw all reasonable

  inferences in favor of the plaintiff, if there is a conflict between the allegations in the

  complaint and the content of the attached exhibit, the exhibit controls.” Brokers’ Choice of

  Am., Inc. v. NBC Universal, Inc., 861 F.3d 1081, 1105 (10th Cir. 2017); see Farrell-Cooper

  Mining Co. v. U.S. Dep’t of Interior, 728 F.3d 1229, 1237 n.6 (10th Cir. 2013) (“Factual

  allegations that contradict a properly considered document are not well-pleaded facts that

  the court must accept as true.” (brackets, ellipsis, and internal quotation marks omitted));

  Jackson v. Alexander, 465 F.2d 1389, 1390 (10th Cir. 1972) (“[W]e need not accept as true

  . . . allegations of fact that are at variance with the express terms of an instrument attached

  to the complaint as an exhibit and made a part thereof.”); Droppleman v. Horsley, 372 F.2d

  249, 250 (10th Cir. 1967) (When a complaint includes an attached exhibit, “[the exhibit’s]

  legal effect is to be determined by its terms rather than by the allegations of the pleader.”
Appellate Case: 21-3035      Document: 010110833726           Date Filed: 03/28/2023      Page: 58

  (internal quotation marks omitted)); 5A Charles Alan Wright, Arthur R. Miller & A.

  Benjamin Spencer, Federal Practice and Procedure § 1327, at 300–01 (4th ed. 2018)

  (“[W]hen a disparity exists between the written instrument annexed to the pleadings and

  the allegations in the pleadings, the terms of the written instrument will control, particularly

  when it is the instrument being relied upon by the party who made it an exhibit.”).

         In this case Plaintiffs alleged they were defrauded by the sales documents provided

  by Security Benefit. Rather than accept specific allegations of the complaint as gospel,

  which appears to be the approach of the majority opinion, we can compare them to the

  contents of the sales documents and reject those that misstate the contents. Other courts of

  appeals have done so in similar contexts, affirming dismissals of complaints alleging fraud

  by examining the purportedly fraudulent documents. See, e.g., Paradise Wire & Cable

  Defined Benefit Pension Plan v. Weil, 918 F.3d 312, 318–19 (4th Cir. 2019) (in considering

  allegedly false and misleading merger proxy statement, the court “turn[ed] to the language

  of the Proxy [statement] which the [plaintiffs] incorporated into the amended complaint by

  reference” and determined that plaintiffs’ allegations of fraud were unfounded); City of

  Edinburgh Council v. Pfizer, Inc., 754 F.3d 159, 168–69 (3d Cir. 2014) (court’s “full

  reading” of the allegedly false or misleading press release revealed that plaintiffs’ account

  was “based on a selective reading of that document” and in fact “bolstered the District

  Court’s conclusion that it contained no false statements”); Kramer v. Time Warner Inc.,

  937 F.2d 767, 775 (2d Cir. 1991) (the offer to purchase, which was subject to judicial

  notice, “misrepresented neither the form nor the value of the Merger Consideration actually

  received,” contrary to the complaint’s characterization of the document); cf. Hampton v.

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  root9B Techs., Inc., 897 F.3d 1291, 1303 (10th Cir. 2018) (where third-party document

  relied upon to show that defendant’s statement was false did not say what plaintiffs’

  complaint alleged it did, “the district court was not obliged” to adopt plaintiffs’ allegation);

  Emps.’ Ret. Sys. of R.I. v. Williams Cos., Inc., 889 F.3d 1153, 1163 (10th Cir. 2018) (court

  rejected plaintiff’s characterization, which relied on “misleadingly extract[ing]” a single

  comment from the broader context in which the remark was made). To do so is not, in the

  words of the majority opinion, to “conjecture that Plaintiffs will be unable to prove their

  claims.” Maj. Op. at 19 n.12. It is to preclude the further abuse of the courts to pursue

  undisputably baseless (fraudulent?) claims. To use twenty-first century parlance governing

  review of motions to dismiss, allegations that contradict the documents on which they are

  based are not “plausible.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation

  marks omitted).

         As for the legal error, the traditional test for whether a statement is fraudulent is

  whether the statement is false or omits matters that must be disclosed to avoid leaving a

  misleading impression. Under the majority opinion, however, even if there is nothing false

  or misleading about the descriptions in the sales documents of each restriction on the

  earnings paid to investors, the seller may be liable for the failure to disclose the cumulative

  impact of the restrictions. From this time forward, I presume, the portion of each prospectus

  that sets forth the risks of an investment will need to include an additional (and extensive)

  discussion of how bad things can be if all the risks materialize. It will not be enough to

  give an accurate description of the investment; the seller will need to include an analysis

  of whether, given the disclosed facts, the investment is a good one.

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         But this introduction is perhaps too abstract. I now turn to an analysis of the majority

  opinion’s specific rulings on the allegations of fraud in this case.

         I.      BACKCASTING

         One of Plaintiffs’ allegations accepted by the majority opinion is that Security

  Benefit’s backcasting was deceptive because the backcast period was cherry-picked. But

  the allegation is contradicted by the sales documents. To make this clear, some background

  is in order.

         Some of the investment products offered by Security Benefit used proprietary

  indices that had been recently created by other entities (such as Morgan Stanley, BNP

  Paribas, and the Royal Bank of Scotland) independent of Security Benefit. Security Benefit

  then created an investment product based on the index. Each index uses a proprietary

  formula to determine what particular mix of specific investments will be valued on any

  particular day. For example, a precious-metals index might be based on a mixture of the

  prices of gold and silver, with the ratio of the two metals determined by, say, that day’s

  15-year mortgage rate.

         Before putting money into an investment based on the index, an investor might well

  want to know how well that index has performed in the past, and for how long. One may,

  or may not, want to jump into an investment based on the price of gold if that price has

  gone steadily higher over the past year, or invest only if the price has performed well over

  five or 10 years. Apparently, for a newly created index one can apply the proprietary

  formula to determine how it would have performed in the past. For example, the sales

  documents indicate that Bloomberg made those computations for the prior 20 years for the

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  ALTVI, on which one of the Security Benefit products was based. This “backcasting” of

  the index was used in the sales materials of Security Benefit.

         The sales materials included spreadsheets showing how well the purchaser’s

  investment would perform in the next 20 years based on the backcast performance of the

  investment. Plaintiffs’ complaint alleges that Security Benefit cherry-picked the

  backcasting to encourage investment in an index by illustrating above-market gains by the

  index for a particular backcast period. If that were the only period used in the Security

  Benefit materials, the complaint would have a point. But what Security Benefit actually

  did was look at the backcast results for the prior 20 years and then provide four projections

  of how the buyer’s investment in the associated Security Benefit product would fare over

  the next 20 years. One projection, the one about which Plaintiffs complain, is based on the

  backcast results for the best performing 10-year period within the prior 20 years (the sales

  materials state that this period for the ALTVI index was from March 1994 to March 2004).

  But the sales materials also include illustrations based on the backcast results for the worst

  performing 10-year period, the median performing 10-year period, and the most recent 10-

  year period (December 2003 to December 2013). If that is improper cherry-picking, then

  no marketer of investment products is safe. The cherry-picking allegation in the complaint

  is utterly discredited by the documents underlying the complaint.

         One may question the value of backcasting. As investors are told in every

  prospectus, past performance is no guarantee of future results. If, as some theorists propose,

  markets perform randomly, so stock picking (and therefore index picking) is a waste of

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  time and effort, then perhaps one should pay no attention to backcast performance. But that

  is a distinct issue from whether particular backcasting is fraudulent.

         II.    PARTICIPATION RATES AND CAPS

         The majority opinion also endorses the complaint’s allegation that Security Benefit

  was deceptive in stating that its investment products are not capped and have a 100%

  participation rate. There are at least two significant problems with this allegation. First,

  Plaintiffs have not, and could not, point to anywhere in the sales documents provided to

  them before they invested where Security Benefit makes the alleged claims. The sales

  documents do not describe any investment product as uncapped, having no cap, or the like.

  Nor do they promise that the investment product will always have a 100% participation

  rate. On the contrary, the illustrations provided by Security Benefit described 100% as the

  “current” participation rate, a number which could be “change[d]. . . at any time” before

  the signing of the contract, but which once set at the beginning of an Index Term (the period

  during which the investor cannot transfer out of the index account and at the end of which

  the value is computed and credited to the investor), would be the same for the entirety of

  that term. Aplts. App., Vol. VII at 1746. The only guarantee for future Index Terms was

  that the rate would not go below 50%. And if the participation rate was set to drop during

  the next Index Term, the investor could switch to a different investment product. In any

  event, it was 100% during the entire period of the alleged fraud.

         To circumvent this factual problem, Plaintiffs create another—by changing the

  definitions of cap and participation rate. Each term is a term of art related to how the

  performance of the selected index is translated into the performance of the associated

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  Security Benefit investment product. If there is a cap on the investment product, then no

  matter how well the index performs, the earnings of the investment product will not exceed

  the cap. If there is a 7% cap on the product and the index increases in value by 10%, the

  product will increase in value by only 7%. If the product has a participation rate, say 90%,

  then the increase in value of the product is only 90% of the increase in the value of the

  associated index. Thus, if the index increases in value by 10%, the product will increase in

  value by only 9%.

         The records of Plaintiffs’ investments show that their returns were never adjusted

  by a cap or by a participation rate below 100%. Indeed, Plaintiffs do not allege the contrary.

  One would think that that would end the matter. But Plaintiffs present a theory, endorsed

  by the majority opinion, that even though Security Benefit did not impose a cap and

  provided 100% participation rates, it limited gains on Plaintiffs’ investments in other ways

  that had the “effect” of caps or lower participation rates. And, say Plaintiffs, even if those

  limitations were adequately described in the marketing documents (whether they were

  adequately described is a separate matter1), Plaintiffs should have been advised that these

  limitations effectively acted as caps or lower participation rates.

         This endorsement by the majority opinion was in error. Although the other

  limitations imposed on the investment products reduced the return on those investments,

         1
           I find it interesting that while Plaintiffs claim that Security Benefit did not disclose
  the cumulative effect of the limitations, their analysis of that cumulative effect is based on
  the disclosures in the sales documents regarding each of the limitations. One might infer
  that Plaintiffs believe that the disclosures of the individual limitations were accurate.

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  just as caps and lower participation rates would reduce the return, those limitations were

  not simply caps or lower participation rates by another name. Security Benefit was not, and

  is not accused of, playing a semantic game in which it says it has no caps but does have

  what it calls “crowns” that set an upper limit on returns. The other limitations are based on

  different parameters and work in different ways. The volatility adjustment, for example,

  turns on how much the value of the index varies from day to day. Its effect on the

  investment return is essentially independent of whether the return on the investment is

  approaching the maximum allowed under a cap, and it does not set a limit on what the

  investment return can be.

         Plaintiffs’ theory amounts to the proposition that one who markets an investment

  cannot say that it does not impose certain limits on returns that are commonly imposed on

  similar products unless it also says that other, quite distinct, limits it does impose (and

  discloses) effectively amount to one of those commonly imposed limits because they, too,

  reduce the potential return. This is quite an innovative theory. And the boundaries of its

  application are not at all apparent. The possibilities are endless. Say, there are three main

  engine features that can reduce the mileage efficiency of a motor vehicle: A, B, and C. The

  seller tells you about features B and C and announces pridefully that the vehicle you are

  looking at does not have feature A. Is the seller liable for fraud for failing to say that the

  engine effectively has feature A because features B and C reduce the efficiency? What is

  the difference between that marketing of the motor vehicle and the marketing of an

  investment product that accurately describes all the imposed expenses but also announces

  that a common expense is not imposed? Is it fraudulent to tout a credit card as offering no

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  monthly fee when the disclosed interest rate is higher than ordinary unless the credit-card

  company says that there is effectively a monthly fee because the higher interest rate

  similarly hurts the cardholder financially? Plaintiffs’ “effectively” theory should be a

  nonstarter.

         Further, I think it dispositive that Plaintiffs rely solely on the sales documents as the

  basis for their assertions of fraud in Security Benefit’s failure to disclose how various

  features of Security Benefit’s investment products combine to reduce returns on those

  products. Every allegedly negative feature is described in those documents. Plaintiffs’

  “contribution” is simply to analyze what is described and conclude (after a few years of

  poor results) that they made poor investments. Unlike the colorable claims of fraud of

  which I am aware, the complaint points to no undisclosed factual information to support

  the claim that Plaintiffs were deceived.

         III.   VOLATILITY CONTROL OVERLAY

         The volatility control overlay is a feature of the ALTVI itself; it is not something

  used to translate the performance of that index to the performance of the associated Security

  Benefit investment product. It is used to translate the daily change in value of the

  underlying TVI to the change in value of the ALTVI. When the TVI price is volatile, the

  change (up or down) in the TVI is reduced in computing the ALTVI. When the TVI price

  is not volatile, the change in the ALTVI price may be greater than the change in the TVI

  price. One paragraph of the sales documents describes the volatility control overlay as

  follows:

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         The ALTVI has a volatility control overlay that is adjusted daily based on
         recent historical volatility, so that more volatility generally leads to reduced
         exposure to the TVI and less volatility generally leads to more exposure. The
         overlay may thus reduce or increase the potential positive change in the
         ALTVI relative to the TVI and thus may lessen or increase the interest that
         will be credited to a fixed index annuity allocated to the ALTVI relative to
         one allocated to the TVI (which is not available). The overlay also reduces
         the cost to hedge the interest crediting risk to [Security Benefit].

  Aplts. App., Vol. VI at 1475 (footnote omitted). Another paragraph states that “[t]he

  volatility control overlay reduces the impact of a falling price as well as increases in the

  price of the TVI.” Id., Vol. VII at 1660.

         The complaint alleges that the description of the ALTVI is deceptive because it

  suggests that the overlay acts symmetrically with respect to increases and decreases in the

  ALTVI. But the paragraph does not say anything about symmetry. Indeed, in a separate

  paragraph of the sales documents it says that the overlay in itself can be expected to reduce

  returns on the investment. See id. at 1762 (“The volatility overlay . . . is also expected to

  reduce the potential positive change in the [ALTVI] and thus the amount of interest that

  will be credited to a fixed index annuity that is allocated to the [ALTVI].”)

         Nevertheless, the majority opinion endorses the deceptiveness claim on a different

  ground, stating that the volatility control overlay acts only to reduce the return on the

  Security Benefit investment product based on the ALTVI; in other words, it can never

  increase the return. It reaches this conclusion from the observation that the investment

  product guarantees that the investor will not suffer a loss in value of the investment. That

  conclusion is based on a misunderstanding of how the overlay and the guarantee work. The

  overlay is a daily adjustment used to compute the ALTVI from the TVI, while the guarantee

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  comes into play only at the end of the five-year investment term for the ALTVI-linked

  product (other products have shorter investment terms). A brief explanation may be useful.

         What the guarantee says is that the investor will get at least all the original

  investment (say, $5000) back at the end of the five-year investment term. During those five

  years the value of the investment product will almost certainly go up and down. At one

  point the $5000 investment product may be valued at $6000. If the value drops to $5900

  the next day, the guarantee does nothing. After all, the investment product is still worth

  more than the original investment. What if the value of the investment product drops the

  next day to $4900? Again, the guarantee does nothing. In particular, it does not revise the

  value upward to $5000. This is because the value of the investment product could still go

  up (and exceed $5000) by the end of the investment term. All the guarantee cares about is

  the value at the end of the five-year term. If the value on that date is $4900, the guarantee

  requires Security Benefit to pay the investor $5000.

         In contrast, the volatility overlay applies on a daily basis. If the TVI has been

  volatile, the amount of the change in the ALTVI that day is reduced. For example, if the

  volatility has been sufficiently high, the overlay may reduce the change in the value of the

  ALTVI to only 50% of the change in the TVI. The 50% figure applies whether the index

  went up or down. If the TVI goes up (or down) 1%, the ALTVI will go up (or down) .5%.

  Also, if the TVI has not been volatile, the volatility overlay may increase the amount of the

  change in the value of ALTVI by more than the change in the value of the TVI. The change

  (up or down) in the value of the ALTVI may be as much as 150% of the change in the

  value of the TVI. (If volatility is high, the change in the value of the ALTVI may be only

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  10% of the change in the TVI. The sales documents state that the historical average of the

  overlay as of December 31, 2013, was 95.8%.)

         Thus, the volatility overlay may increase the return to the investor in two different

  ways. First, if the volatility is low and the TVI is rising, the percentage increase in the value

  of the ALTVI will be greater than the percentage increase in the value of the TVI. The TVI

  may go up 5%, but the ALTVI goes up 6%. Second, if the volatility is high and the TVI is

  dropping, the percentage decline in the value of the ALTVI will be less than the decline in

  the TVI. If the TVI is volatile and drops by 1% during the day, the value of the ALTVI

  may drop by only .5 %. Because of this reduced loss, the ultimate value of the investment

  product based on the ALTVI is likely to be greater than it would be otherwise. Say, the

  value of the ALTVI is $6000 and the TVI declines by $100. Because of the overlay, the

  value of the ALTVI drops by only, say, $70, leaving it at $5930. If the value of the ALTVI

  remains steady until the end of the five-year investment term, it will be worth $30 more

  than if there had been no overlay. The no-loss guarantee, in contrast, would have no effect

  with regard to the one-day drop; if the value of the investment exceeds $5000 at the end of

  the five-year term, the guarantee does not add anything to the value.2

         I see nothing deceptive in the description of the volatility control overlay in the sales

  documents. I may be missing something. But I can say with some confidence that the theory

         2
           The majority opinion says that this analysis of the volatility overlay “is precisely
  the sort of information that is not before us at this stage but that might be revealed during
  discovery.” Maj. Op. at 54 n.25. But the analysis is based entirely on disclosures in the
  allegedly fraudulent sales documents.

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  of deception alleged in the complaint, and endorsed by the majority opinion, is based on a

  misconception of the investment product.

         IV. THE EXCESS-RETURN FEATURE

         The remaining claim of deception is that the sales documents did not explain what

  they meant when stating that indices on which Security Benefit based its investment

  products were excess-return indices. To endorse this claim would wreak havoc. What was

  the deception? Excess return is not some arcane term known only by the cognoscenti.

  Plaintiffs have not suggested that it had a special meaning confined to the Security Benefit

  sales documents. It was even defined where the documents described the MSDA index.

  See Aplts. App., Vol. VII at 1731 (“The Index is calculated on an excess return basis over

  an equivalent cash investment, which means that the Index level reflects the deduction of

  the Federal Funds interest rate that would apply to such a cash investment.”). Perhaps sales

  documents should contain a glossary of terms with special meaning in the documents; but

  there is no reason to define terms that have well-known meanings in the context.

         V. CONCLUSION

         Everyone who markets an investment hopes that others will think it will be

  profitable. Sometimes it does not turn out that way. A bad result does not imply fraud by

  the seller. See Olkey v. Hyperion 1999 Term Tr., Inc., 98 F.3d 2, 8 (2d Cir. 1996) (“Not

  every bad investment is the product of misrepresentation.”). Here, Plaintiffs assert, without

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  any supporting analysis or explanation,3 that there is no way that their investments could

  have turned out well. See, e.g., Aplts. App., Vol I at 157 (“[T]he Synthetic Indices would—

  by design—produce near-zero returns.”); id. at 180 (“[T]he Synthetic Indices are designed

  and administered to generate near-zero returns.”); id. at 185 (“[T]he collection of

  commodities comprising the ALTV Index . . . have an expected near-zero return.”); Aplts.

  Br. at 4 (“[Security Benefit] knew the extraordinarily complicated Annuities and

  Proprietary Indices were in fact destined to produce near‐zero or below‐market returns to

  annuity owners.”). But such are the vagaries of the market that they probably would not be

  complaining if they had acquired the ALTVI-linked investment to begin last year.4 Courts

         3
           The majority opinion states that “Plaintiffs cited statistical analysis of the assets
  underlying the indices, which showed their expected returns were near zero.” Maj. Op.
  at 44. What the complaint alleges, in its entirety, is “standard economic models using
  recognized statistical methods (such as the Monte Carlo analysis) demonstrate that the
  expected returns for the assets underlying the Synthetic Indices are nearly zero once the
  spreads and costs of the Secure Income and Total Value Annuities are taken into account.”
  Aplts. App., Vol. I at 179. The complaint provides no citation to any study, making it
  impossible to determine whether there was any particular analysis of the investments by
  the Plaintiffs, or whether they are just studies saying generally that investors cannot beat
  the market. Such a conclusory assertion is entitled to no weight in assessing the validity of
  the complaint.
         4
             During 2022, while the S&P 500 dropped in value by 20%, the ALTVI went up
  4%:

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  should eschew assuming the role of becoming the final backstop to protect disappointed

  investors.

  Annuity Linked TVI Index (USD), MerQube, https://merqube.com/index/NWSALTVI (last
  visited Jan. 3, 2023).

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