The Securities and Exchange Commission (SEC) has officially concluded its lengthy investigation into Faraday Future, an electric vehicle startup, despite previously considering enforcement action. This decision was communicated to the company and others involved in the investigation last week, according to multiple sources who spoke to TechCrunch.
The closure of this investigation occurs against a backdrop of a notable decline in SEC enforcement activities, with only four cases against publicly traded companies initiated in the SEC’s 2025 fiscal year, as per a recent report. The SEC did not provide a comment when contacted after business hours.
Faraday Future was under scrutiny by the SEC for almost four years. The investigation focused on whether the company made “false and misleading statements” during its 2021 public listing via a special purpose acquisition company (SPAC) merger. Additionally, the SEC was looking into allegations that Faraday Future fabricated sales of its first electric vehicles in 2023, as claimed by former employees who have acted as whistleblowers.
Throughout the investigation, the SEC issued multiple subpoenas to Faraday Future, as revealed in the company’s regulatory filings. The agency also conducted depositions with several former employees and executives in 2024 and 2025, according to individuals with knowledge of the matter.
In July 2025, Faraday Future disclosed receiving “Wells Notices” from the SEC, which are notifications sent when SEC staff recommend enforcement action. Despite this, the company has stated that no action will be taken against its executives, including founder Jia Yueting. “We can now put all our energy into strategy execution,” Jia said in a statement.
It remains uncertain whether Faraday Future formally responded to the Wells Notices. As of February, the company indicated in regulatory filings that it had not yet done so. The company had expressed plans to engage with the SEC to argue against the necessity of enforcement action, as noted in a recent filing.
The Department of Justice (DOJ) also requested information from Faraday Future following the SEC’s investigation initiation in 2022. While Faraday Future referred to this as an “investigation” in its filings, the DOJ has not confirmed if it launched a full probe and did not provide a comment upon request.
Typically, the SEC follows through with enforcement actions after issuing Wells Notices. A 2020 study by the Wharton School found that approximately 85% of Wells Notice recipients face court proceedings with the SEC.
Over the past six years, the SEC has examined nearly every electric vehicle startup that went public via a SPAC. Most of these cases concluded with settlements. The SEC dropped investigations into Lucid Motors in 2023 and, as reported by TechCrunch in February, into Fisker late last year.
Origins of the Investigation
Founded in California in 2014 by Jia Yueting, Faraday Future aimed to rival Tesla in the electric vehicle market. The company attracted talent from Tesla and other tech giants like Apple, employing around 1,400 people at its peak. However, financial difficulties quickly arose, exacerbated by Jia’s financial troubles in China, where he was placed on a debtor blacklist.
Faraday Future initially received a lifeline from Chinese real estate giant Evergrande, but the partnership soured by 2018, leading to further layoffs. Jia stepped down as CEO in 2019 and filed for personal bankruptcy to address debts linked to his former company, LeEco. Despite these challenges, Jia remained influential within Faraday Future.
The situation became problematic when Faraday Future went public in 2021, generating about $1 billion. Concerns about Jia’s influence led to the formation of a special committee to investigate, prompting the involvement of the SEC. The committee reported its findings to the SEC, revealing that Faraday Future relied on loans from employees with ties to Jia.
The SEC’s investigation was publicly disclosed by Faraday Future in March 2022, with DOJ information requests following shortly after.
Dodging Another Bullet
Throughout 2022, Faraday Future experienced internal conflict as Jia’s associates sought to regain control, resulting in threats against some board members. These efforts eventually led to changes in board composition, allowing Jia’s allies to regain influence.
Faraday Future delivered its first FF91 SUVs in early 2023, but faced lawsuits from former employees who alleged the sales were not genuine and that the company misled investors. SEC investigators, as filings indicate, issued subpoenas regarding these issues.
Despite the intense scrutiny, Faraday Future remains operational, albeit with challenges. The company has diversified, importing Chinese-made hybrid and electric vans and exploring new ventures like robotics and cryptocurrency. However, it faces financial hurdles, including a recent warning from Nasdaq about its stock price dropping below $1, risking delisting.
The article includes updates with statements from Faraday Future.
Original Story at techcrunch.com