The Securities and Exchange Commission has closed its investigation into electric vehicle startup Faraday Future, even though SEC staff in the case recommended enforcement action last year, TechCrunch has learned.
Four sources familiar with the investigation, who were granted anonymity to discuss the government’s case, told TechCrunch that the SEC informed the company and people involved in the investigation about the shutdown last week.
The dismissal of the case comes amid a historic drop in enforcement actions by the SEC, which only brought four cases against publicly traded companies in its 2025 fiscal year. a recent report shows. The SEC did not respond to an after-hours request for comment.
The investigation into Faraday Future lasted almost four years. The SEC was investigating whether the electric vehicle startup made “false and misleading statements” when it went public in a 2021 merger with a special purpose acquisition company (SPAC), and was also investigating whether Faraday Future misrepresented sales of its first electric vehicles in 2023, a claim that has been made by at least three former whistleblowing employees.
The financial regulator sent the startup multiple subpoenas, Faraday Future’s regulatory filings show. The SEC also took depositions from several former employees and executives in 2024 and 2025, three of the people familiar with the case told TechCrunch.
In July 2025, Faraday Future revealed the SEC had sent the company and several executives, including founder Jia Yueting, letters known as “Wells Notices.” The SEC sends notices to Wells when staff working on a case decide to recommend that the agency take enforcement action.
“Now we can put all our energy into executing the strategy. Over the past five years, we had to spend a lot of time, effort and money cooperating with the investigation,” Jia said in a statement. statement Sunday. Faraday Future said the SEC has informed the company that it will also not take action against any of its executives.
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It is unclear whether Faraday Future ever responded to the Wells Notices sent last year. In February, the company disclosed in regulatory filings that it had not done so. “The company and executives plan to work with the SEC to explain why enforcement action is not warranted,” Faraday Future wrote in such a presentation last month.
The Department of Justice also sent Faraday Future requests information after the SEC opened its investigation in 2022. Faraday Future has referred to this as an “investigation” in regulatory filings; The Justice Department has never confirmed whether it opened a full investigation and did not respond to an after-hours request for comment.
It is rare that the SEC does not take enforcement action after sending a Wells Notice. A study conducted at the Wharton School in 2020 showed that about 85% of the goals those who receive a Wells Notice end up in court at the SEC.
The SEC investigated nearly every electric vehicle startup that went public in a SPAC merger over the past six years. In almost all of those cases, the agency reached an agreement with the new companies. An investigation was dismissed in lucid engines in 2023, and as TechCrunch first reported in FebruaryThe SEC ended an investigation into bankrupt electric vehicle startup Fisker late last year.
Origins of the research
Faraday Future was founded in California in 2014 by Jia, an entrepreneur who at the time ran a booming technology conglomerate in China known as LeEco. It was one of many startups trying to become the “next Tesla” or, optimistically, the “Tesla killer.”
Faraday recruited talent from Tesla, other automakers, and also technology companies like Apple, and at one point employed as many as 1,400 employees. But things got difficult quickly. The company turned heads, both good and bad, at the 2016 Consumer Electronics Show, with a striking concept car and the lofty goal of being as disruptive as the iPhone.
The company introduced its first vehicle the following year: a luxury electric SUV called FF91. At the end of 2017, although the company was almost out of cash and had hundreds of workers were fired or suspended. Jia’s company in China had collapsed and he self-exiled to California when the government of his home country placed him on a black list of debtors. (It was at this time that a close business associate of Jeffrey Epstein approached the sex criminal about investing in Faraday Future, as well as other electric vehicle startups. as TechCrunch recently revealed. Epstein never invested).
Faraday’s future was rescued by an investment of the important Chinese real estate conglomerate Evergrande. But that relationship also quickly fell apart with Evergrande. moving away at the end of 2018 and Faraday Future laid off even more employees.
Jia nominally stepped aside as CEO in 2019 and also requested personal bankruptcy to pay off billions of dollars of LeEco debt that he had personally guaranteed. But behind the scenes, he was still largely run by the company.
This became a problem when Faraday Future went public in 2021 and raised around a billion dollars. Board members of the newly named public company believed that Faraday executives had misrepresented Jia’s control over day-to-day operations, especially after a short-seller report dissecting Faraday’s future was published, and formed a special committee to investigate.
That committee hired an outside law firm and a forensic accounting firm, and in the first months began reporting its findings directly to the SEC, the three people familiar with the investigation told TechCrunch.
Between January and April 2022, Jia was marginalized As a result of the board’s investigation, a senior vice president named Matthias Aydt (who is now Jia’s co-CEO) 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 “not cooperating with the investigation,” according to the company filingsbut now he’s back with Faraday Future.)
The committee’s work also showed that Faraday Future, in the two years before it went public, had survived in part thanks to 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 revealed that the SEC had opened its investigation. the start-up revealed DOJ information requests in June.
Dodging another bullet
Throughout the remainder of 2022, and amid the early stages of the SEC investigation, employees and people close to Jia launched a campaign to regain control of the board and his company. This eventually resulted in death threats against some directors, who finally resignedpaving the way for people close to Jia to return to run the company.
Faraday Future finally delivered the first FF91 SUVs in early 2023. Former employees sued the company claiming that these were not real salesand that the company had misled investors. SEC investigators working on the case subpoenaed Faraday Future over issues related to these sales, the documents show.
The former executives and employees were initially removed by the SEC in 2024, according to people familiar with the investigation. The SEC gathered some of them for longer depositions in the first half of 2025, the people said.
The Wells Notice sent in July 2025 said that the SEC staff had made “a preliminary determination to recommend that the Commission bring an enforcement action against the Company alleging violations of various anti-fraud provisions of the federal securities laws.”
Specifically, the Wells Notice referenced “alleged false or misleading statements” made during the SPAC merger process about “related party transactions” and Jia’s “role in the Company.” Jia, his nephew Wang and two other unnamed employees also received notices from Wells.
Faraday Future is still trying to sell FF91, but it has also recently changed its business in several ways. The company is importing more affordable hybrid and electric vans from China. It also appears to be selling. Renamed versions of Chinese robots.and became a publicly traded biotechnology company in a company focused on cryptocurrencies.
Those efforts have not stopped the company’s problems. On Friday, the company announced that it had received a warning from Nasdaq that its stock 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.
