From Greer v. Advanced Equities, Inc., 2010 U.S. Dist. LEXIS 3142 (N.D. Ill. Jan. 15, 2010):

While not directly raised by the parties, the court notes that whether § 12(a)(2) claims are governed by Rule 9(b)'s specificity requirements is not a settled issue. While some courts have concluded that Rule 9(b)'s particularity requirement applies to § 12(a)(2) claims, other courts have rejected that conclusion on the ground that § 12(a)(2) imposes strict liability for misstatements in a prospectus or registration statement. Because neither fraud nor scienter is an element of a § 12(a)(2) claim, some courts have concluded that a plaintiff should not be required to plead what it need not prove. See, e.g., Brian Murray & Donald J. Wallace, You Shouldn't Be Required to Plead More Than You Have to Prove, 53 Baylor L. Rev. 783 (2001) ("Baylor Law Review Article"), and cases cited therein. See also In Re Ulta Salon, Cosmetics & Fragrance, Inc. Securities Litigation, 604 F. Supp. 2d 1188, 1193 (N.D. Ill. 2009) ("Such a 'pleading standard which requires a party to plead particular facts to support a cause of action that does not include fraud or mistake as an element comports neither with Supreme Court precedent nor with the liberal system of 'notice pleading' embodied in the Federal Rules of Civil Procedure.'") (citation omitted).

The Seventh Circuit has not spoken directly on the issue although its decision in Sears v. Liken, 912 F.2d 889 (7th Cir. 1990), has been construed, including by this court in its order on the defendants' motion to dismiss the Corrected Amended Complaint in the instant case, as affirming dismissal of a § 12(a)(2) claim because of the plaintiffs' failure to plead the claim with particularity under Rule 9(b). Some authority questions this interpretation of the Sears case. See Baylor Law Review Article at 795-98 ("The court offered no justification for why Securities Act claims should be subject to Rule 9(b) nor did it state that the plaintiffs had alleged fraud in the Securities Act claims."). See also In Re Ulta Salon Securities Litig., 604 F. Supp. 2d at 1993 (stating that the Seventh Circuit in Sears "was not asked to and did not determine that Rule 9(b) applies to § 11 and 12 claims even if those claims 'sound in fraud.'").

Regardless of how one interprets the holding of Sears, the court concludes that the allegations supporting the plaintiffs' § 12(a)(2) claim in this case are subject to the heightened pleading standard of Rule 9(b). As an initial matter, Rule 9(b) applies to all allegations of fraud, not just claims of fraud. Fed. R. Civ. P. 9(b) ("In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake."). See also Borsellino v. Goldman Sachs Group, Inc., 477 F.3d 502, 507 (7th Cir. 2007) ("Rule 9(b) applies to 'averments of fraud,' not claims of fraud, so whether the rule applies will depend on the plaintiffs' factual allegations"). Moreover, "because Rule 9(b) only excises deficient averments of fraud from a complaint (and does not provide an independent basis for dismissal), failure to satisfy Rule 9(b) does not necessarily sound a death knell." Siegel v. Shell Oil Co. , 480 F. Supp.2d 1034, 1040 (N.D. Ill. 2007). Nevertheless, "if, while the [applicable] statute or common law doctrine doesn't require proof of fraud, only a fraudulent violation is charged, failure to comply with Rule 9(b) requires dismissal of the entire charge." Kennedy v. Venrock Assocs., 348 F.3d 584, 593 (7th Cir. 2003)(citations omitted).

Although § 12(a)(2) does not require allegations of fraud, the plaintiffs' allegations with respect to their § 12(a)(2) claim are in fact all based on alleged fraud.