Reid and his henchmen likely sold out the rest of their stash
With KMAG previously suspended, I don't think he had a chance to do so. The SEC has a habit of forcing disgorgement in such situations.
However, keeping up his KMAG cult image was important for any TRII dumping he had planned. Then he created problems for himself in that scam, and had to go dark.
Jeffy's pay days were before the 2012 KMAG suspension, and when he screwed the original TRII note holders.