The U.S. Securities and Exchange Commission (SEC) has recently officially terminated its investigation into electric vehicle startup Faraday Future and decided not to take any enforcement action against the company and related executives, ending a regulatory turmoil that lasted for nearly four years. According to people familiar with the matter, the SEC notified the company and relevant personnel involved in the case this week of the closure of the investigation, and the SEC staff who had previously been responsible for the case recommended that the Commission initiate enforcement procedures last year.
This decision comes against the backdrop of a significant decline in the SEC's overall enforcement efforts: related reports show that the agency initiated only four enforcement cases against listed companies in its 2025 fiscal year, a historic low. The SEC did not respond to requests for comment after hours. The investigation into Faraday Future began in 2022, and focused on whether the company made "false and misleading statements" when it went public through a merger with a special purpose acquisition company (SPAC) in 2021, and whether the company engaged in false sales practices during the delivery of the first batch of electric vehicles in 2023. At least three former employees acted as whistleblowers and alleged that the company exaggerated or falsified FF 91 sales. These accusations have also become one of the important clues in the SEC investigation.
According to Faraday Future’s previous disclosures in regulatory filings, the SEC issued multiple subpoenas to the company during the investigation, and successively subpoenaed testimony from multiple former employees and former executives in 2024 and 2025. In July 2025, Faraday Future disclosed that it and many senior executives—including founder Jia Yueting—received the so-called “Wells Notice.” This kind of notice usually means that the SEC staff responsible for the case has made a preliminary judgment and intends to recommend that the Commission initiate enforcement actions against the relevant entities. Research shows that about 85% of the subjects of "Wells Notices" will eventually be sued by the SEC, so the termination of this case is considered relatively rare.
Faraday Future confirmed the conclusion of the investigation through a press statement on Sunday and emphasized that the SEC will not take enforcement action against the company or any relevant executives. Jia Yueting said in a statement that over the past five years, the company had to invest a lot of time, energy and money to cooperate with the investigation, and now it can "focus all its energy on strategy execution." As of February this year, Faraday Future still stated in regulatory filings that it had not yet formally responded to the Wells Notice received in 2025. It only stated that "the company and its executives plan to communicate with the SEC to explain why enforcement actions should not be taken." It's unclear whether the company later submitted a formal response.
In addition to the SEC, the U.S. Department of Justice (DOJ) also sent an information request letter to Faraday Future in 2022, which the company called an "investigation" in public documents. However, the Justice Department has never confirmed whether it has launched a full criminal investigation into the company, and it did not respond to media requests for comment on the latest developments. In the past six years, almost all electric vehicle startups that have gone public through SPAC have received SEC attention. In most cases, the SEC eventually reached settlements with these companies; previously, the regulator terminated its investigation into Lucid Motors in 2023 and ended its investigation into bankrupt electric vehicle company Fisker at the end of 2025.
Faraday Future’s regulatory dilemma is closely related to its complex and changeable development history. The company was established in California in 2014. At that time, Jia Yueting still controlled the LeTV system, which was rapidly expanding in China, and was trying to build Faraday Future into the "next Tesla" or even a "Tesla killer." The company once attracted a large number of talents from Tesla, other car companies, and technology companies such as Apple, and the number of employees once reached about 1,400. In 2016, Faraday Future debuted a concept car at CES, attracting both attention and skepticism with its dazzling display and slogan of “subverting the automotive industry like the iPhone.” But the good times did not last long. At the end of 2017, the company was almost out of food and was forced to lay off hundreds of employees or take unpaid leave. At the same time, Jia Yueting left for the United States after his business empire in China collapsed and he was included in the list of "untrustworthy persons subject to execution."
Since then, Faraday Future once received a life-saving investment from Chinese real estate giant Evergrande, but the cooperative relationship between the two parties soon broke down. Evergrande finally withdrew at the end of 2018, and Faraday Future once again laid off large-scale layoffs. In 2019, Jia Yueting nominally stepped down as CEO and filed for personal bankruptcy in the United States to settle his personal guarantee for LeTV-related debts. However, multiple investigations have shown that he still has substantial control over the company's operations. In 2021, Faraday Future will be listed on Nasdaq through a merger with SPAC, raising approximately US$1 billion. Shortly after the listing, a short-selling report pointed the finger at the company's information disclosure and Jia Yueting's actual control issues, causing concern for the new board of directors. The board of directors subsequently established a special committee, hired an external law firm and a forensic accounting team to investigate, and began proactively reporting relevant findings to the SEC in the first few months of the investigation.
During the committee's investigation, there were successive changes in corporate governance. From the beginning of 2022 to April of that year, Jia Yueting was marginalized. One executive, Matthias Aydt, was placed on "probation" for six months. Another vice president, Jerry Wang, who was also a relative, was suspended. He later left the company due to "failure to cooperate with the investigation", but later returned to the company. The committee also found that in the two years before the company went public, Faraday Future partially relied on junior employees with Jia Yueting connections to provide millions of dollars in borrowings, which were defined as "related party transactions" in law. On March 31, 2022, Faraday Future disclosed that the SEC had officially launched an investigation into the company. In June of the same year, it also disclosed that it had received an information request letter from the Ministry of Justice.
As the SEC investigation progresses, the battle for control within the company intensifies. According to reports, starting in the second half of 2022, Jia Yueting and his supporters launched a series of actions to regain control of the board of directors and the company. During this period, there were even death threats to some directors, which eventually led to the resignation of many people, paving the way for the pro-Jia camp to return to the helm. In early 2023, Faraday Future finally delivered the FF 91 luxury electric SUV to the first users. However, multiple former employees subsequently filed lawsuits alleging that the deliveries were not true sales and that the company misled investors. SEC investigators also issued subpoenas to the company regarding related sales issues.
Between 2024 and 2025, many former executives and employees accepted multiple rounds of longer-lasting depositions from the SEC. In the Wells Notice issued in July 2025, SEC staff stated that they had made a "preliminary decision to recommend that the Commission initiate enforcement actions" and accused Faraday Future of making "allegedly false or misleading statements" regarding related party transactions and Jia Yueting's role in the company during the SPAC merger process. In addition to the company itself, Jia Yueting, his nephew Jerry Wang and two other unnamed employees were also included in the notice. Against this background, the SEC’s sudden decision this week not to proceed with enforcement is seen as another time Faraday Future “dodges a bullet.”
Although the regulatory cloud has temporarily lifted, Faraday Future's business future remains uncertain. The company is still struggling to sell the FF 91, but has quietly diversified its business focus to include importing cheaper hybrid and electric vans from China and selling OEM Chinese robotics products. In addition, Faraday Future also took the lead in transforming a U.S. listed biotechnology company into a cryptocurrency-focused enterprise and invested approximately US$41 million in it through a PIPE transaction. However, these changes did not fundamentally reverse the company's financial difficulties. On Friday, Faraday Future disclosed that it had received a warning notice from Nasdaq because the company's stock price has been below the minimum compliance standard of $1 for a continuous period of time. If it fails to recover within the prescribed period, it will face the risk of being delisted.
At a time when the SPAC craze has receded and the capital market has become increasingly cautious about electric vehicle start-ups, Faraday Future, although it has temporarily escaped the direct threat of enforcement from the U.S. Securities and Exchange Commission, still needs to find a new balance between product delivery, corporate governance and capital trust. Next, whether the company can use the window period of regulatory "liquidation" to rebuild market confidence will become a key focus for the outside world to observe this "problem-ridden" new car-making force.