The U.S. Securities and Exchange Commission has closed its lengthy investigation into electric vehicle startup Faraday Future, according to sources familiar with the matter. The regulator informed the company and individuals involved in the probe about the decision this past week.
This dismissal comes despite SEC staff on the case recommending enforcement action last year. The agency sent Faraday Future and several executives, including founder Jia Yueting, formal “Wells Notices” in July 2025 indicating staff had made a preliminary determination to recommend legal action.
Scope of the Investigation
The SEC’s probe lasted nearly four years and examined multiple aspects of Faraday Future’s business. Investigators focused on whether the company made “false and misleading statements” during its 2021 merger with a special purpose acquisition company (SPAC).
Regulators also scrutinized allegations that Faraday Future fabricated sales of its first electric vehicles in 2023. At least three former employee whistleblowers made these claims, according to sources. The SEC issued multiple subpoenas and took depositions from former employees and executives throughout 2024 and 2025.
Faraday Future disclosed the SEC investigation in March 2022. The company revealed the Department of Justice had also requested information that June, though the DOJ never confirmed opening a full probe.
Unusual Regulatory Outcome
The SEC’s decision not to pursue enforcement action after issuing Wells Notices represents an uncommon outcome. A 2020 study conducted at the Wharton School found approximately 85% of targets receiving such notices ultimately face SEC litigation.
This closure occurs during a period of reduced enforcement activity by the financial regulator. A recent report shows the SEC initiated only four cases against publicly-traded companies during its 2025 fiscal year.
The agency has investigated nearly every electric vehicle startup that went public via SPAC merger over the past six years. In most instances, the SEC reached settlements with these companies. The regulator dismissed a probe into Lucid Motors in 2023 and ended an investigation into bankrupt EV startup Fisker late last year.
Company’s Turbulent History
Faraday Future was founded in California in 2014 by Chinese businessman Jia Yueting. The company aimed to compete directly with Tesla, recruiting talent from established automakers and technology firms like Apple. At its peak, Faraday Future employed around 1,400 people.
The company’s financial stability proved fragile. By late 2017, Faraday Future faced severe cash shortages and conducted significant layoffs. Jia’s Chinese conglomerate LeEco collapsed during this period, leading to his relocation to California as Chinese authorities placed him on a debtor blacklist.
An investment from Chinese real estate giant Evergrande provided temporary relief in 2018, but that relationship dissolved within months. Jia filed for personal bankruptcy in 2019 to settle billions in LeEco debt he had personally guaranteed.
Internal Conflicts and Board Investigations
Faraday Future’s troubles intensified after its 2021 SPAC merger raised approximately $1 billion. Newly appointed board members suspected executives had misrepresented Jia’s ongoing control over daily operations.
A special committee formed to investigate these concerns hired outside legal and forensic accounting firms. Between January and April 2022, this committee reported findings directly to the SEC, according to sources familiar with the investigation.
The internal probe resulted in Jia being sidelined temporarily, while senior vice president Matthias Aydt received six months probation. Another vice president, Jerry Wang, was suspended and later resigned for “failure to cooperate with the investigation.” Wang has since returned to the company.
Committee work revealed Faraday Future had relied on multi-million-dollar loans from low-level employees connected to Jia before going public. These “related party transactions” became a focus of the SEC’s investigation.
Ongoing Business Challenges
Faraday Future delivered its first FF91 luxury electric SUVs in early 2023. Former employees have sued the company, alleging these were not legitimate sales and that investors were misled.
The company continues attempting to sell the FF91 while diversifying its business model. Recent efforts include importing more affordable hybrid and electric vans from China and selling rebadged versions of Chinese robots.
These initiatives have not resolved Faraday Future’s financial difficulties. The company announced on March 20, 2026, that it received a warning from Nasdaq regarding its stock price falling below the $1 minimum requirement. This could eventually lead to delisting from the exchange.
The SEC did not respond to requests for comment about the investigation’s closure. A Faraday Future spokesperson said the company would share additional information but had not done so by publication time.
This article was produced with AI assistance and reviewed by our editorial team for accuracy and quality.
