The SEC has concluded its investigation into the electric vehicle startup Faraday Future, TechCrunch reports, despite staff recommendations for enforcement action last year. Four sources familiar with the matter, who requested anonymity, stated that the SEC informed the company and involved parties of the decision last week.
The closure occurs amidst a decline in SEC enforcement actions, with only four cases initiated against publicly-traded companies in the 2025 fiscal year, according to a recent report. The SEC has not commented on this.
The investigation, lasting nearly four years, probed whether Faraday Future made false statements during its 2021 public merger with a SPAC and whether sales of its electric vehicles in 2023 were falsified, as claimed by whistleblowers.
Faraday Future’s regulatory filings indicate the startup received multiple subpoenas and several former employees and executives were deposed in 2024 and 2025.
In July 2025, Faraday Future disclosed receiving “Wells Notices” from the SEC, indicating potential enforcement action. It’s unclear if the company responded to these notices.
The DOJ also requested information from Faraday Future following the SEC’s investigation in 2022, though it’s unclear if a full probe was opened.
Generally, SEC action follows a Wells Notice, with a 2020 study indicating that 85% of recipients face court action. The SEC’s investigation covered many EV startups associated with SPAC mergers, typically ending with settlements.
Faraday Future, founded in 2014 by Jia Yueting in California, faced early growth challenges amid ambitious goals. It attracted talent from notable companies but struggled financially by 2017.
Rescue efforts included Chinese real estate conglomerate Evergrande’s investment, which later fell through, leading to layoffs. Jia stepped down as CEO in 2019 amid personal bankruptcy to address debts from his collapsed Chinese tech conglomerate, LeEco.
When Faraday Future went public in 2021, allegations arose that Jia’s influence was misrepresented to investors, prompting a special committee investigation reporting its findings to the SEC.
Jia was sidelined in 2022 following the board investigation, and several executives faced scrutiny, with disclosures about related party transactions surfacing.
In 2023, despite delivering FF91 SUVs, former employees alleged these were not legitimate sales, alleging investor misinformation. The SEC inquiry, now closed, also examined these claims.
Currently, Faraday Future has diversified its offerings with hybrid and electric vans and other ventures, yet it faces ongoing challenges, including a Nasdaq warning about its stock price.