In April, Lewis was found not guilty in a 2011 lawsuit accusing him of libel. Chau appealed, and today a federal appeals court rejected it in a 2-1 vote.
Chau said Lewis portrayed him and other managers of collateralized debt obligations (CDOs) as "villains."
He claimed there were 26 defamatory statements in Lewis' 2010 book, which aims to explain the origins of the 2007 financial crisis.
He was especially upset about Chapter 6, which describes a discussion between Chau and hedge fund manager Steve Eisman at a dinner in Las Vegas.
Before the financial crisis, Chau bought subprime bonds that served as collateral for CDO investors and was particularly good at creating demand for risky bonds that no one would otherwise have ever wanted.
In the original ruling, U.S. District Judge George Daniels wrote: "A careful review of Chapter 6 of The Big Short indicates that the challenged statements are incapable of being reasonably susceptible to any defamatory meaning."