An Abbotsford man has lost his appeal into a decision that found him guilty of contravening the B.C. Securities Act and ordered him to pay back $4.3 million.
A three-judge panel of the B.C. Court of Appeal ruled on Friday (Jan. 8) that the decision made by the B.C. Securities Commission (BCSC) in July 2014 should be upheld.
McCabe sought the appeal on the basis that the BCSC did not have jurisdiction to sanction him for misconduct.
McCabe, 31, was permanently banned from B.C.’s capital markets in January 2015 for publishing false stock reports in the monthly Elite Stock Report.
BCSC records at the time indicated that McCabe researched stocks, using publicly available information such as websites and news releases, and, if he thought they had a shot at being profitable, he would write about them in his newsletter.
The Elite Stock Report was distributed only by direct unsolicited mail in the U.S.
A BCSC panel found that between October 2009 and July 2010, McCabe published “greatly misleading reports” about three companies in order to inflate their stock price.
McCabe argued that because the Elite Stock Report was published and mailed in the U.S., there was no trading or exchange of affected securities in B.C.
The BCSC maintained that it had jurisdiction over McCabe because he is a B.C. resident and it was his “authorship of the misrepresentations” that contravened the B.C. Securities Act.
The three judges on the Court of Appeal panel were in agreement that the BCSC was within its jurisdiction to punish McCabe, saying he wrote some of the tout sheets from his home in Abbotsford and was paid in B.C. for his services.