Donald Danks of Irvine was convicted by a federal jury today of conspiracy to commit securities fraud, witness tampering, obstruction of justice, and perjury in connection with a multimillion-dollar scheme to defraud investors in a Nasdaq-listed company and his subsequent efforts to obstruct the investigation into his conduct.
After a two-week retrial, the jury found that Mr Danks engaged in a six-year securities fraud scheme involving the stock of Loop Industries, Inc. Mr Danks used his position as a company insider to obtain non-public information and influence investors while secretly selling Loop shares for his own benefit.
According to evidence presented at trial, Mr Danks helped form Loop and served on its board of directors and audit committee, giving him access to a steady stream of inside information that continued even after he left the board.
During the conspiracy, Mr Danks solicited investors to purchase more than $100 million in Loop stock, including through the selective disclosure of inside information. He also directed investors to buy shares at specific times, prices, and volumes to influence the stock price.
Mr Danks carried out the scheme through Ventanas Capital LLC, a shell company he created with a former associate. He created fictitious employees and used the company to conceal his and his associate’s roles in the transactions.
Mr Danks transferred hundreds of thousands of Loop shares to Ventanas and gradually sold them to finance his and his associate’s lifestyle. He also used Ventanas to conduct stock transactions that concealed his identity as a seller.
Although Mr Danks was required to disclose his control and trading of Loop stock, he failed to disclose that he was selling shares through Ventanas.
At the same time, he repeatedly promoted Loop as a strong investment and represented that he was purchasing shares, while secretly selling shares himself and through Ventanas. In total, Mr Danks profited more than $4 million from the scheme.
After the SEC and FBI began investigating, Mr Danks and his associate took additional steps to conceal the fraud. Among other things, they fabricated and backdated promissory notes to make the loans appear legitimate.
Evidence presented at trial showed that documents purportedly created over years were actually prepared at the same time. Mr Danks subsequently testified about those documents during his first trial without disclosing that they had been created after the investigation began.
Mr Danks also tampered with his associate, encouraging her to repeat his false account of who controlled their shell company. His first trial ended in a mistrial.
Mr Danks is scheduled to be sentenced on December 4, 2026.
