Ryan Messner filed a petition for review in the D.C. Circuit seeking to challenge an order issued by the Securities and Exchange Commission. The SEC order approved a plan to distribute funds from a 'Fair Fund,' which was created as part of a settlement with Surgalign Holdings, Inc. The settlement addressed alleged violations of securities laws that occurred between 2015 and 2019, with public disclosures regarding the misconduct issued in 2020. Messner attempted to argue that he suffered injuries related to Surgalign's conduct, but the court found that the specific misconduct he cited occurred at times later than the period covered by the settlement and the SEC's order.
The court addressed two primary issues: the motion to supplement the record and the petition for review itself. First, regarding the motion to supplement, the court applied the standard that supplementation is only appropriate when new documents are necessary. The court found that Messner had not demonstrated this necessity, particularly for documents already included in the administrative record, and thus denied the motion. Second, and more critically, the court addressed standing. Citing Lujan v. Defenders of Wildlife and Martin v. SEC, the court explained that standing requires a concrete injury that is fairly traceable to the challenged action. The court determined that Messner's alleged injuries stemmed from Surgalign's misconduct occurring after the period covered by the settlement. Because the SEC order only addressed violations from 2015 to 2019, Messner could not establish the requisite causal connection between the order and his injuries. Consequently, the court lacked jurisdiction to hear the petition for review.
The dismissal means the SEC's order approving the Fair Fund distribution to victims of Surgalign Holdings' 2015-2019 misconduct remains in effect. The decision clarifies that investors or other parties cannot challenge SEC Fair Fund orders based on injuries resulting from misconduct that occurred outside the specific timeframe of the settlement. It also sets a precedent that motions to supplement the administrative record will be denied if the petitioner cannot show that the new evidence is essential to the review.
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