I see.
He needs to get in touch with the office of international students in his college (if there is one) and update them about the denial.
Going back to your question, no, he has no legal basis to adjust through you. He needs to leave the US, and once you become a resident, you can petition for him.
But since he is here illegally, most likely he will incur in a bar, which he will have to serve outside of the US