The Court of Appeal for British Columbia has dismissed a bid to overturn a decision by the B.C. Securities Commission (BCSC) that imposed sanctions on the publisher of misleading stock reports.

Colin McCabe had sought to appeal a BCSC ruling that found him liable for misrepresentations made in newsletters touting a U.S. based mining firm, Guinness Exploration Inc. In a 2014 decision, the BCSC ordered disgorgement of approximately $2.78 million, and levied an administrative penalty of $1.5 million against McCabe.

See: BCSC sanctions two men in secret promotion case

According to the court’s decision dated Jan. 8, McCabe sought to overturn the regulator’s decision, arguing that the BCSC lacked the jurisdiction to make a finding of liability against him, because the conduct in question took place in the United States. The stock reports in question were printed in South Dakota and distributed by direct mail to approximately 3 million homes in the U.S. They were not distributed in Canada.

However, the BCSC ruled that it had jurisdiction because McCabe was a B.C. resident, the reports were written in B.C., and he received $5 million in fees for publishing them, including at least one account that was held in B.C.

“Although the targets of the touting may have been investors in the U.S., and the companies concerned traded only in the U.S., McCabe engaged in this misconduct in British Columbia. Tolerance of that misconduct could not help but impugn the reputation of our markets,” the BCSC decision says.

The court ruling indicates that McCabe argued that “the alleged misrepresentations only came into existence when they were received and acted upon in the United States and therefore there is no factual basis or jurisdiction” for a finding that he violated B.C. securities law.

However, the court dismissed that argument, and sided with the BCSC. “The Guinness Tout Sheets were written in British Columbia, by a resident of British Columbia, who was paid in British Columbia for his services,” the court decision says. As a result, it dismissed the appeal.