SEC v. Jeffrey Gainer (ponzi schemes, 2019)

Judgment entered

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In April 2019 an SEC administrative law judge, by default, barred Jeffrey Gainer from the securities industry and penny stock offerings after his Ohio conviction for selling unregistered securities in the KGTA Petroleum Ponzi scheme run by Thomas Abdallah and Kenneth Grant. He was sentenced to 52 months, and a court found him liable for over $1.6 million of disgorgement, deemed satisfied by restitution.

The record

What was ordered

Civil penalty

—

Disgorgement

$1.6m

Prejudgment interest

—

Total relief

$1.6m

Alleged gain

$3m

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The initial decision of April 10, 2019 (Administrative Proceeding 3-18130) finds that KGTA raised over $20 million with guaranteed returns, that Gainer took $3 million in fees and that investors lost over $7.2 million. The related injunction ordered disgorgement above $1.6 million plus interest above $250,000. The decision itself orders only bars.

The record lacked the 52-month sentence.

This library tags the matter as ponzi schemes because the document describes it as a scheme paying earlier investors with later investors' money. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Ponzi schemes — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2019-04-10 Initial decision

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• Initial decision (ID-1372)
• Order instituting proceedings
• Finality order

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 10, 2026. submit a correction.