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Alberta regulators are investigating American short-seller Marc Cohodes regarding his stake in Badger Daylighting Inc., in the latest escalation of hostilities between the U.S. investor and the oil-services company.

A lawyer with the Alberta Securities Commission (ASC) divulged the existence of a wider probe at a hearing on Wednesday, the same day a commission panel dismissed a Badger-supported application for a cease-trade order against the California-based short-seller.

The regulator is also mulling legal action against Mr. Cohodes, staff lawyer Don Young said, without providing specifics. “The investigation into Mr. Cohodes is extant and ongoing," he said during proceedings in Calgary.

A spokesperson for the ASC declined to elaborate on Thursday, citing internal policies.

Badger, which provides excavating services to government and oil industry clients across North America, declined to comment. However, the Calgary-based company issued a statement late on Wednesday calling attention to the investigation targeting its biggest critic.

“Badger does not, as a matter of policy, comment on ongoing regulatory matters and looks forward to the conclusion of the ASC’s investigation," it said.

Mr. Cohodes, known for his previous bets against mortgage lender Home Capital Group Corp. and others, disclosed his short position in Badger in May, 2017, on the same day the company released financial results that missed analyst expectations, triggering a sell-off in the shares.

The stock has since recovered, but Mr. Cohodes has not relented. In Twitter posts and other statements, he has raised concerns about purported accounting issues and executive departures at Badger and accused the company of illegally dumping hazardous waste.

Badger has denied any wrongdoing, citing an earlier ASC investigation that resulted in no enforcement actions against the company. However, it has not said whether it is the subject of further regulatory probes.

Mr. Cohodes said on Thursday he has provided credible information to the ASC that warrants further investigation. “There should be an investigation into the ASC on why this is going on, because they’re not doing their job investigating companies," he said. "Instead, they’re wasting their time – and taxpayers’ money – kicking tires on me. All I’m doing is providing the facts.”

The cease-trade order sought by ASC staff relied on a Twitter post by Mr. Cohodes that alleged illegal dumping by Badger. However, the panel hearing the case dismissed the application, citing insufficient grounds to proceed.

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