By Titik Puspa 
This significant development marks the end of a nearly four-year-long inquiry that cast a long shadow over the embattled EV manufacturer. Four sources with intimate knowledge of the investigation, who requested anonymity due to the sensitive nature of the government proceedings, confirmed that the SEC officially notified Faraday Future and individuals implicated in the probe of the closure this past week. The decision to dismiss the case comes at a time when the SEC’s enforcement activity has seen a notable historical decline. In fiscal year 2025, the agency initiated only four cases against publicly-traded companies, a stark contrast to previous periods, according to a recent report. The SEC did not offer a comment on the matter when contacted for an after-hours statement.
The SEC’s investigation into Faraday Future, officially commenced in 2022, centered on two primary areas of concern: whether the electric vehicle startup made "false and misleading statements" during its 2021 merger with a special purpose acquisition company (SPAC) to go public, and allegations that Faraday Future fabricated sales figures for its initial electric vehicles in 2023. The latter claim was significantly amplified by at least three former employee whistleblowers who asserted the company had misrepresented its early sales performance. The financial regulator deployed its investigative powers robustly, issuing multiple subpoenas to Faraday Future, as documented in the company’s regulatory filings. Furthermore, the SEC conducted depositions of numerous former employees and executives throughout 2024 and into 2025, according to the three individuals familiar with the investigation.
A critical juncture in the probe occurred in July 2025, when Faraday Future disclosed that it and several key executives, including its founder Jia Yueting, had received "Wells Notices." This formal communication from the SEC signifies that the staff working on the case have determined there is sufficient evidence to recommend that the Commission initiate an enforcement action. In response to the SEC’s closure of the investigation, Jia Yueting issued a statement on Sunday, expressing his relief and eagerness to refocus the company’s efforts. "We can now put all our energy into strategy execution," Jia stated. "Over the past five years, we had to spend a great deal of time, effort, and money on cooperating with the investigation." Faraday Future also confirmed that the SEC’s decision means no enforcement action will be taken against any of its executives.
It remains unclear whether Faraday Future formally responded to the Wells Notices issued in the previous year. As recently as February, the company indicated in its regulatory filings that it had not yet submitted a response, stating, "The Company and executives plan to engage with the SEC to explain why enforcement action is not warranted." The Department of Justice also made inquiries into Faraday Future shortly after the SEC opened its investigation in 2022, sending requests for information. Faraday Future has characterized these inquiries as an "investigation" in its regulatory filings, though the DOJ has never officially confirmed the opening of a full-scale probe and did not respond to requests for comment.
The SEC’s decision not to pursue an enforcement action after issuing a Wells Notice is statistically rare. A 2020 study conducted at the Wharton School revealed that approximately 85% of entities receiving a Wells Notice ultimately face legal proceedings with the SEC. This pattern is particularly relevant in the context of EV startups that have gone public via SPAC mergers, a trend that has attracted significant SEC scrutiny over the past six years. In most of these cases, the agency has reached settlements with the companies. However, there have been instances of dismissed investigations, such as the one involving Lucid Motors in 2023, and as TechCrunch previously reported, the SEC concluded its probe into the now-bankrupt EV startup Fisker late last year.
Origins of the Investigation
Faraday Future’s journey began in California in 2014, founded by Jia Yueting, a prominent businessman who was then at the helm of a burgeoning technology conglomerate in China, LeEco. The company emerged amidst a wave of startups aiming to disrupt the automotive industry, often aspiring to be the "next Tesla" or, more ambitiously, a "Tesla killer." Faraday Future aggressively recruited talent from established automotive manufacturers like Tesla, as well as from tech giants such as Apple, at its peak employing around 1,400 individuals.
The company first captured widespread attention, both positive and negative, at the 2016 Consumer Electronics Show (CES) with the unveiling of a futuristic concept car and audacious claims of market disruption comparable to the iPhone. The following year, Faraday Future revealed its inaugural production vehicle, a luxury electric SUV named the FF91. However, by the end of 2017, the company faced severe financial distress, running critically low on cash and initiating significant layoffs and furloughs. Jia’s business empire in China had experienced a collapse, leading him to self-exile in California while his home country placed him on a public blacklist of debtors. It was during this period that a close business associate of Jeffrey Epstein reportedly pitched the convicted sex offender on investing in Faraday Future and other EV startups, though Epstein ultimately did not invest, as TechCrunch revealed in a separate report.
Faraday Future’s precarious financial situation was temporarily alleviated by a substantial investment from the major Chinese real estate conglomerate Evergrande. However, this partnership proved short-lived, with Evergrande withdrawing its support by the end of 2018, triggering further widespread layoffs at Faraday Future. Jia nominally stepped down as CEO in 2019 and subsequently filed for personal bankruptcy to address billions of dollars in LeEco-related debt he had personally guaranteed. Despite these structural changes, Jia remained influential behind the scenes.
This situation became a focal point when Faraday Future went public in 2021 through a SPAC merger, raising approximately $1 billion. Members of the newly formed public company’s board began to question whether Faraday Future’s executives had misrepresented Jia’s actual control over the company’s day-to-day operations, particularly after a critical short-seller report emerged. In response, the board established a special committee to conduct an internal investigation. This committee engaged an external law firm and a forensic accounting firm, and its findings were subsequently shared directly with the SEC, according to the three sources familiar with the investigation.
Between January and April 2022, Jia’s operational role within the company was significantly curtailed as a result of the board’s internal inquiry. Concurrently, a senior vice president, Matthias Aydt (who now serves as co-CEO alongside Jia), was placed on probation for six months, and another vice president, Jerry Wang (Jia’s nephew), was suspended. Wang eventually resigned, citing "failure to cooperate with the investigation," as per company filings, though he has since rejoined Faraday Future. The special committee’s work also uncovered that in the two years preceding its public debut, Faraday Future had relied on multi-million-dollar loans from low-level employees with ties to Jia, transactions legally classified as "related party transactions." On March 31, 2022, Faraday Future publicly disclosed that the SEC had initiated its investigation, and in June of the same year, the company revealed it had also received requests for information from the Department of Justice.
Dodging Another Bullet
Throughout the remainder of 2022, and during the nascent stages of the SEC investigation, a concerted effort by employees and individuals aligned with Jia aimed to regain control of the company’s board and its overall direction. This campaign reportedly involved death threats directed at some board members, who ultimately resigned, thereby facilitating the return of individuals loyal to Jia to positions of influence within the company.
Faraday Future finally began delivering its first FF91 SUVs in early 2023. However, former employees subsequently filed lawsuits alleging that these deliveries did not represent genuine sales and that the company had misled investors. The SEC investigators handling the case subpoenaed Faraday Future regarding issues pertinent to these alleged fabricated sales, as indicated in regulatory filings. Former executives and employees were initially deposed by the SEC in 2024, with some undergoing extended depositions in the first half of 2025, according to individuals familiar with the probe.
The Wells Notice issued in July 2025 explicitly stated that SEC staff had reached a "preliminary determination to recommend that the Commission file an enforcement action against the Company alleging violations of various anti-fraud provisions of the federal securities laws." Specifically, the Wells Notice referenced "purported false or misleading 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, signaling the breadth of the SEC staff’s concerns.
Despite navigating these significant regulatory challenges, Faraday Future continues to face substantial business hurdles. While still attempting to sell the FF91, the company has also diversified its business operations, notably by importing more affordable hybrid and electric vans from China. Furthermore, Faraday Future appears to be venturing into robotics, reportedly selling re-badged versions of Chinese robots, and has transformed a publicly-traded biotechnology company into a firm focused on cryptocurrency. These strategic shifts have not alleviated the company’s ongoing financial struggles. On Friday, Faraday Future announced it had received a warning from the Nasdaq stock exchange regarding its stock price falling below the minimum bid requirement of $1, a situation that could ultimately lead to the delisting of its shares.
This report has been updated to include a statement from Faraday Future.