The Securities and Exchange Commission (SEC) has concluded its inquiry into the electric vehicle company Faraday Future. This decision comes despite recommendations from SEC staff for enforcement action last year, according to JS.
JS has learned from four anonymous sources familiar with the investigation that the SEC informed Faraday Future and involved parties of the case’s closure in the past week.
The closure of the case occurs amid a notable decline in the SEC’s enforcement actions, as the agency only initiated four cases against publicly-traded companies in its 2025 fiscal year, according to a recent report. The SEC did not provide a comment on this matter outside of regular business hours.
The investigation into Faraday Future spanned nearly four years, focusing on whether the startup made “false and misleading statements” during its 2021 public merger with a special purpose acquisition company (SPAC). The SEC also investigated claims from at least three former employee whistleblowers that Faraday Future fabricated sales of its first electric vehicles in 2023.
Regulatory filings indicate that the SEC issued multiple subpoenas to the company. According to three individuals familiar with the investigation, the SEC conducted depositions of several former employees and executives in 2024 and 2025.
In July 2025, Faraday Future disclosed that the SEC had sent “Wells Notices” to the company and several executives, including its founder, Jia Yueting. Such notices indicate that SEC staff are recommending enforcement action.
Jia stated, “We can now focus all our energy on executing our strategy. Over the past five years, cooperating with the investigation required significant time, effort, and money,” in a statement released Sunday. Faraday Future announced that the SEC confirmed no action would be taken against any of its executives.
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It remains uncertain if Faraday Future responded to the Wells Notices sent last year. In February, regulatory filings revealed that the company had yet to respond. Faraday Future stated, “The Company and executives plan to engage with the SEC to explain why enforcement action is not warranted,” in a filing last month.
The Department of Justice (DOJ) also requested information from Faraday Future after the SEC launched its investigation in 2022. While the company has referred to this as an “investigation” in regulatory filings, the DOJ has not confirmed whether it opened a full probe and did not respond to an after-hours request for comment.
It is uncommon for the SEC not to pursue enforcement action following a Wells Notice. A study at the Wharton School in 2020 indicated that about 85% of targets receiving such notices eventually face court action with the SEC.
Over the past six years, the SEC has investigated nearly every electric vehicle startup that went public through a SPAC merger. Most cases resulted in settlements. The SEC dropped an investigation into Lucid Motors in 2023, and JS reported in February that the SEC ended an inquiry into the bankrupt EV startup Fisker late last year.
Origins of the investigation
Faraday Future was established in California in 2014 by Jia, who was then leading a successful tech conglomerate in China called LeEco. The company aspired to become the “next Tesla” or even a “Tesla killer.”
Faraday attracted talent from Tesla, other car manufacturers, and tech companies like Apple, at one point employing around 1,400 people. The company gained attention at the 2016 Consumer Electronics Show with a flashy concept car and the ambitious goal of being as disruptive as the iPhone.
Faraday unveiled its first vehicle, a luxury electric SUV named the FF91, the following year. By the end of 2017, however, the company was nearly out of funds and had laid off or furloughed hundreds of employees. Jia’s business in China had collapsed, prompting him to move to California after being placed on a debtor blacklist by the Chinese government. During this period, a close business associate of Jeffrey Epstein pitched investments in Faraday Future, though Epstein never invested.
Faraday Future was saved by an investment from Chinese real estate giant Evergrande, but the partnership quickly deteriorated. By the end of 2018, Evergrande withdrew, leading to further layoffs at Faraday Future.
Jia nominally stepped down as CEO in 2019 and filed for personal bankruptcy to settle billions of dollars of LeEco debt he had guaranteed. However, he remained influential within the company.
This became problematic when Faraday Future went public in 2021 and raised around $1 billion. Concerns arose among the newly-appointed board over Jia’s control, particularly after a short-seller report scrutinized the company, leading to the formation of a special committee to investigate.
The committee engaged a law firm and a forensic accounting firm, and began reporting its findings to the SEC, as relayed by three people familiar with the investigation to JS.
Between January and April 2022, Jia was sidelined due to the board’s investigation. A senior VP, Matthias Aydt (now co-CEO with Jia), was placed on probation for six months, and another VP, Jerry Wang (Jia’s nephew), was suspended. Wang eventually resigned for “failure to cooperate with the investigation,” according to company filings, but has since returned to Faraday Future.
The committee’s findings revealed that Faraday Future, in the two years before going public, had relied partly on multi-million-dollar loans from low-level employees connected to Jia, known as “related party transactions.”
On March 31, 2022, Faraday Future announced the SEC’s investigation. The startup also disclosed DOJ information requests in June.
Dodging another bullet
During the remainder of 2022, amid the SEC investigation, Jia’s associates sought to regain control of the board and company. This led to death threats against some directors, who resigned, allowing Jia’s allies to resume leadership roles.
Faraday Future managed to deliver the first FF91 SUVs in early 2023. However, former employees have filed lawsuits claiming these were not genuine sales and that investors were misled. SEC investigators issued subpoenas to Faraday Future regarding these sales, according to filings.
Former executives and employees were first deposed by the SEC in 2024, according to sources familiar with the investigation. Some were called for longer depositions in the first half of 2025.
The Wells Notice sent in July 2025 indicated SEC staff had made a “preliminary determination” to recommend enforcement action against the company for alleged violations of federal securities laws’ anti-fraud provisions.
Specifically, the Wells Notice cited supposed false statements made during the SPAC merger process concerning “related party transactions” and Jia’s “role in the Company.” Jia, his nephew Wang, and two other unnamed employees also received Wells Notices.
Faraday Future continues to market the FF91, but has diversified its offerings by importing more economical hybrid and electric vans from China. The company also appears to be selling rebranded Chinese robots and has transformed a publicly traded biotechnology company into a crypto-focused firm.
Despite these endeavors, the company continues to face challenges. On Friday, Faraday Future announced receiving a Nasdaq warning due to its stock price falling below the $1 minimum, risking potential delisting.
This story has been updated with a statement from Faraday Future.
