United States District Court, C.D. California
ORDER DENYING DEFENDANTS' MOTION TO DISMISS 
OTIS D. WRIGHT, II, District Judge.
Pending before the Court is a Motion to Dismiss filed by Defendants David E. Smith, MMB Holdings LLC, Mojobear Capital LLC, and indiePub Entertainment, Inc. (collectively "Defendants"). (ECF No. 18.) Plaintiff Aaron Rubenstein's Complaint alleges that Defendants violated Section 16(b) of the Securities and Exchange Act of 1934, 15 U.S.C. § 78p(b). (ECF No. 1.) This action seeks to recover the alleged profits from short-swing stock trades by corporate insiders. For the reasons discussed below, the Court DENIES Defendants' Motion to Dismiss.
II. FACTUAL BACKGROUND
Rubenstein, an owner of securities in indiePub Entertainment, Inc. ("indiePub"), brings this action in a derivative capacity on behalf of indiePub. (Compl. ¶¶ 2, 4.) Mojobear Capital LLC ("Mojobear"), whose sole member is David E. Smith, is the managing member of MMB Holdings ("MMB"). (Id. ¶¶ 5-9.) On March 9, 2012, MMB entered into a loan agreement with indiePub. (Id. ¶ 15.) The agreement provided that MMB would make future loans to indiePub in exchange for an option or warrant to purchase shares of indiePub's common stock over a defined period and at a defined price. (Id. ) Rubenstein alleges that the agreement gave an "insider  a right to acquire shares" and thus violates Section 16(b). (Id. ¶ 16.)
On November 28, 2012, MMB and indiePub amended the terms of the options agreement by reducing the exercise price at which shares could be purchased from $0.40 per share to $0.15 per share. (Id. ¶ 18.) Rubenstein alleges that this material amendment of an outstanding option or warrant "is deemed to be a cancellation of the existing option or warrant and the issuance of a new option or warrant." (Id. ¶ 19.) That same day, MMB allegedly sold 14, 952, 775 shares of indiePub at $0.54 per share. (Id. ¶ 21.) From July 23, 2012 through April 23, 2013, MMB purchased indiePub stock on twenty-five different occasions. (Id. ¶ 17.) Rubenstein alleges that MMB profited over $2, 000, 000 through such transactions. (Id. ¶ 23.) Those short-swing profits are allegedly recoverable by indiePub pursuant to Section 16(b). (Id. ¶ 24.)
On November 3, 2014, Rubenstein sent a written prosecution demand letter to indiePub. (Id. ¶ 13.) On November 25, 2014, Rubenstein filed his Complaint which asserts only one cause of action under Section 16(b).
III. LEGAL STANDARD
Pursuant to Rule 12(b)(6), a defendant may move to dismiss an action for failure to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleading in the light most favorable to the non-moving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).
The Court is not required to "assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (internal quotation marks and citations omitted). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004) (internal quotation marks and citations omitted). "If a complaint is accompanied by attached documents, the court is not limited by the allegations contained in the complaint. These documents are part of the complaint and may be considered in determining whether the plaintiff can prove any set of facts in support of the claim." Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987) (internal citations omitted). The Court may consider contracts incorporated in a complaint without converting a motion to dismiss into a summary judgment hearing. United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003).
Defendants make two arguments in their Motion to Dismiss. First, they argue that the Court must dismiss the Complaint on grounds that Rubenstein failed to comply with the waiting period requirement in Section 16(b). (MTD at 5-6.) Second, Defendants argue that Rubenstein's Complaint failed to allege the contents of the demand letter. (Id. at 7-8.) For the reasons discussed below, the Court rejects both arguments.
A. Demand Requirements and the Statute of Repose
Defendants' first argument is based on the timing between Rubenstein's demand letter to indiePub and the filing of this lawsuit. Section 16(b) "imposes strict liability on insiders, regardless of motive, and disgorges profits from all short-swing trades even those not actually based on inside information." Dreiling v. Am. Online Inc., 578 F.3d 995, 1001 (9th Cir. 2009). In order to bring a derivative suit under Section 16(b), the shareholder must first make a demand on the securities issuer to allow ...