The Securities and Exchange Commission has closed its investigation into electric vehicle startup Faraday Future, despite the SEC’s staff on the case recommending an enforcement action last year, according to TechCrunch.
Four sources familiar with the investigation, who spoke on condition of anonymity to speak about the government’s case, told TechCrunch that the SEC informed the company and people involved in the investigation of the shutdown last week.
The dismissal of the case comes amid a historic drop in enforcement action by the Securities and Exchange Commission, which brought just four cases against listed companies in fiscal year 2025, according to a recent report. The Securities and Exchange Commission did not respond to a request for comment after business hours.
Research into Faraday Future took almost four years. The SEC was looking into whether the EV startup made “false and misleading statements” when it went public about a 2021 merger with a special purpose acquisition company (SPAC) and also investigated whether Faraday Future faked sales of its first electric vehicles in 2023 — a claim made by at least three former employees.
The financial regulator sent the startup multiple subpoenas, regulatory filings from the Faraday Future show. The SEC also took depositions from several former employees and executives in 2024 and 2025, three people familiar with the matter told TechCrunch.
In July 2025, Faraday Future disclosed that the SEC had sent the company and several executives – including founder Jia Yueting – letters known as “Wells Notices”. The SEC sends Wells notices when staff dealing with a case decide to recommend that the agency take enforcement action.
“We can now put all our energy into executing the strategy. In the past five years, we have had to spend a lot of time, effort and money to cooperate with research,” Jia said in a statement Sunday. Faraday Future said the SEC has informed the company that it will not take action against any of its executives.
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It’s unclear whether Faraday Future ever responded to Wells’ notices sent last year. As recently as February, the company revealed in regulatory filings that it had none. “Company and executives plan to work with SEC to explain why enforcement action not warranted,” Faraday Future he wrote in one such filing last month.
The Ministry of Justice too sent Faraday Future is seeking information after the SEC opened its investigation in 2022. Faraday Future has referred to it as an “investigation” in regulatory filings. the Justice Department has never confirmed whether it has opened a full investigation and did not respond to an after-hours request for comment.
It is rare for the SEC not to take enforcement action after sending a Wells notice. A study done at the Wharton School in 2020 showed this about 85% of targets who receive a Wells notice end up in court with the SEC.
The SEC has investigated nearly every electric vehicle startup that has gone public in a SPAC merger over the past six years. In almost all of these cases, the agency settled with the startups. He declined an inquiry at Lucid Motors in 2023, and as TechCrunch first reported in February, the SEC ended an investigation into bankrupt EV startup Fisker late last year.
Origin of research
Faraday Future was founded in California in 2014 by Jia, an entrepreneur who at the time ran a growing tech group in China known as LeEco. It was one of several new companies trying to become the “next Tesla” or, optimistically, a “Tesla killer.”
Faraday acquired talent from Tesla, other automakers, as well as tech companies like Apple, and at one point had about 1,400 employees. But things turned abnormal quickly. The company turned heads, in good ways and bad, at the 2016 Consumer Electronics Show with an impressive concept car and the lofty goal of being as annoying as the iPhone.
The company unveiled its first vehicle the following year: a luxury electric SUV called the FF91. By the end of 2017, although the company was almost out of cash and had hundreds of workers were laid off or laid off. Jia’s company in China had collapsed and he went into self-imposed exile in California as the government in his home country placed him on the blacklist of debtors. (It was at this point that a close business associate of Jeffrey Epstein asked the sex offender to invest in Faraday Future, as well as other EV startups, as TechCrunch recently revealed. Epstein never invested.)
Faraday Future was saved by an investment by major Chinese property group Evergrande. But that relationship quickly dissolved, too, with Evergrande leaving by the end of 2018 and Faraday Future laying off even more employees.
Jia nominally resigned as CEO in 2019 and also submitted an application personal bankruptcy to settle billions of dollars of LeEco debt that he had personally guaranteed. But behind the scenes, he was still largely in charge of the company.
This became an issue when Faraday Future released in 2021 and raised about $1 billion. Board members at the newly-appointed public company believed that Faraday executives had misrepresented Jia’s control over day-to-day operations — especially after the release of a vendor brief that examined Faraday Future — and formed a special committee to investigate.
That committee hired an outside law firm and a forensic accounting firm and within the first few months began reporting its findings directly to the SEC, the three people familiar with the investigation told TechCrunch.
Between January and April 2022, Jia he was sidelined As a result of the board’s investigation, a senior vice president named Matthias Aydt (who is now co-CEO with Jia) was placed on probation for six months, and another vice president named Jerry Wang (who is Jia’s nephew) was suspended. (Wang eventually resigned after “failing to cooperate with the investigation,” according to the company filingsbut now it’s back with Faraday Future.)
The commission’s work also showed that Faraday Future, in the two years before it went public, survived in part on multimillion-dollar loans made to the company by low-level employees with connections to Jia — known as “related party transactions” in legal parlance.
On March 31, 2022, Faraday Future show up that the Capital Market Commission had started its investigation. The startup was revealed requests for information from the Department of Justice in June.
Avoid another bullet
During the remainder of 2022, and amid the early stages of the SEC’s investigation, employees and people close to Jia waged a campaign to regain control of his board and company. This eventually led to death threats against some directors, who eventually resignedpaving the way for people close to Jia to run the company once again.
Faraday Future finally delivered the first FF91 SUVs in early 2023. Former employees sued the company alleging that these were not real sales and that the company had misled investors. SEC investigators working on the case have asked Faraday Future about issues related to those sales, the filings show.
Former executives and employees were initially ousted by the Securities and Exchange Commission in 2024, according to people familiar with the investigation. The Securities and Exchange Commission has set some of them for larger deposits in the first half of 2025, the people said.
The Wells Notice sent in July 2025 stated that SEC staff had made a “preliminary decision 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 announcement is mentioned “alleged false or misleading statements” made during the SPAC merger process regarding “related party transactions” and Jia’s “role in the Company.” Jia, Wang’s nephew and two other unnamed employees also received Wells notices.
Faraday Future is still trying to sell the FF91, but it has recently changed its business in a few ways. The company imports more affordable hybrid and electric trucks from China. It also seems to be selling rebranded versions of Chinese robotsand became a publicly traded biotech company in a crypto-focused company.
These efforts did not stop the company’s struggles. On Friday, the company announced that it had received a warning from Nasdaq that its share price was below the minimum of $1which could eventually lead to the company being delisted.
This story has been updated with a statement from Faraday Future.
