The Supreme Court of Canada (SCC) has denied a trader leave to appeal a British Columbia Court of Appeal decision, which upheld an earlier B.C. Securities Commission (BCSC) decision that found he had engaged in illegal insider trading.

The SCC declined to hear an appeal from Kegham Kevin Torudag, who sought leave to appeal a decision of B.C. appeal court that was handed down in November 2011.

The BCSC says Torudag is an active trader in junior public companies, primarily in the resource sector, and in recent years has made a significant portion of his living by trading on the TSX Venture Exchange.

The B.C. appeal court denied Tourdag’s challenge of a BCSC enforcement ruling against him, in which it was argued that he was not subject to the BCSC’s jurisdiction because he was not in B.C. when he conducted alleged illegal insider trades.

The BCSC notes that the B.C. appeal court upheld the BCSC panel’s view that, “because the BCSC regulates the venture exchange, they can prosecute illegal insider trading on the venture exchange. In effect, anyone who trades on the Venture Exchange, regardless of their location, is subject to the Securities Act.”

In its decision, the B.C. appeal court said, “The commission has the responsibility to regulate the activities of the exchange to provide protection to the investing public. This responsibility includes the duty to ensure ‘a level playing field’ for investors in exchange traded companies. Allowing the misuse of insider information to skew fairness in the trading arena is inimical to the operation of a fair and orderly market in securities.” And, it added, “… that the commission was correct in its jurisdictional analysis of the relevant factors.” So, it denied the appeal.

In its original decision, a BCSC panel found that Torudag contravened BC’s insider trading rules, and it ordered that he cease trading securities for one year, subject to limited exceptions, and it also ordered that he pay a fine of $36,771. The commission reports that the penalties, which were stayed during the original appeal and again during the application for leave to appeal to the Supreme Court, are now active again. It says Torudag has paid his financial sanction, and that the cease trade order will remain in effect until April 17, 2013.