SEC Ends Nearly 4-Year Investigation into Faraday Future

Why did the SEC rarely withdraw enforcement actions against Faraday Future?

IT Home, March 23 — On March 22, local time, according to foreign media TechCrunch, the U.S. Securities and Exchange Commission (SEC) officially ended its investigation into Faraday Future, without following the recommendation of the previous enforcement officials responsible for the case to “take action.”

Several insiders revealed that the SEC notified the company and related personnel of the investigation’s termination last week. Meanwhile, the SEC’s overall enforcement efforts are noticeably declining. Data shows that in fiscal year 2025, the agency only initiated four enforcement cases against publicly listed companies.

This investigation into Faraday Future lasted nearly four years, focusing on two main issues: first, whether the company made false or misleading statements during its 2021 merger with a special purpose acquisition company (SPAC); second, whether there was fraud in the first batch of electric vehicle sales in 2023, based on reports from multiple former employees.

During the investigation, the SEC issued subpoenas to Faraday Future multiple times and conducted interviews with several former employees and executives from 2024 to 2025.

In July 2025, Faraday Future disclosed that the SEC had issued “Wells notices” to the company and several senior executives, including founder Jia Yueting, indicating that regulators were prepared to recommend litigation.

However, ultimately, the SEC took no further action. Jia Yueting stated that the company could refocus resources on business development, having spent significant time and costs over the past few years cooperating with the investigation. Faraday Future also confirmed that the SEC would not take enforcement action against any of its executives.

Notably, the company initially did not respond to the Wells notices. A disclosure in February this year still indicated that Faraday Future planned to communicate with the SEC, suggesting no enforcement action was expected.

Apart from the SEC, the U.S. Department of Justice also made information requests to Faraday Future in 2022, but it has not been confirmed whether any formal case was filed.

Based on historical experience, it is rare for enforcement actions to be withdrawn after a Wells notice is issued. Studies show that about 85% of related cases eventually proceed to litigation.

In recent years, the SEC has investigated nearly all electric vehicle startups that went public via SPAC, most of which settled. Investigations into Lucid Motors and Fisker have also been terminated.

Regarding the company itself, Faraday Future experienced governance turmoil during the investigation. In 2022, internal efforts and close associates of Jia Yueting pushed for a board restructuring, which even involved threats against directors, ultimately leading to a change in the board.

On the business front, the company delivered its first batch of FF91 vehicles in early 2023, but former employees accused sales figures of being “not genuine” and alleged investor misleadings, which became a key focus of the SEC investigation.

Currently, the company is still promoting FF91 sales while attempting to pivot, including introducing low-cost models from China, selling robot products, and venturing into cryptocurrency-related businesses.

However, these adjustments have not improved its operational situation. Last Friday, the company disclosed that it had received a warning from Nasdaq, with its stock price falling below $1 (IT Home note: approximately 6.9 RMB at current exchange rates), facing the risk of delisting.