An Alberta court has rejected the argument from three men facing allegations of various breaches of securities laws that certain aspects of the law are unconstitutional as they infringe on federal jurisdiction over criminal law.

The Alberta Securities Commission (ASC) said Friday that the Court of Queen’s Bench of Alberta has upheld a lower court ruling that provisions of the provincial securities law that allow the court to impose penal sanctions, such as fines and prison terms, are within the province’s constitutional powers.

According to the decision, the three men were each charged with 10 counts of violating securities laws by the Crown back in 2011, including allegations of fraud, unregistered advising, and misleading investors. Those allegations have not been proven. The defendants applied to the court arguing that certain aspects of the law are unconstitutional because they infringe on federal authority over criminal law. In 2013, the court rejected that application, which they then appealed.

Now, the appeal court has also rejected their argument. It finds that there is an overlap between the provisions of provincial securities law and federal law, but that they are of equal importance, and so not under the exclusive jurisdiction of any particular level of government.

“The federal aspects of the impugned provisions relating to the criminal law power include: (a) overlap with existing Criminal Code offences; and (b) the imposition of penal consequences, including imprisonment for violations of those sections. The provincial aspects of those sections include the suppression of conditions that are likely to cause crime, and prevention of crime, in respect of a larger, comprehensive regulatory scheme that deals with Alberta securities laws,” the court said in its decision.

“The federal and provincial aspects of the impugned provisions are of equivalent importance.”

“Although this court does not entirely agree with the conclusions that the [judge of Provincial Court of Alberta] reached concerning the objectives of the Securities Act and the Criminal Code, it finds that the conclusions that he reached concerning the Alberta Legislature’s power to enact the impugned provisions are correct,” the court said.