The SEC drops its four-year-old investigation into EV startup Faraday Future

The Securities and Exchange Commission (SEC) has officially concluded its four-year investigation into the electric vehicle startup Faraday Future. This decision comes despite recommendations from SEC staff for an enforcement action against the company last year. Sources familiar with the matter, who preferred to remain anonymous, revealed that the SEC communicated the closure to Faraday Future and parties involved in the investigation earlier this week. This dismissal occurs amidst a notable decline in enforcement actions by the SEC, which only initiated four cases against publicly traded companies in its 2025 fiscal year, as reported recently. Faraday Future's investigation revolved around allegations that the company made misleading and false statements during its 2021 public merger with a special purpose acquisition company (SPAC). Furthermore, the SEC was probing claims from at least three whistleblower former employees who asserted that Faraday Future had fabricated sales of its first electric vehicles in 2023. Regulatory filings indicate that the SEC issued multiple subpoenas to the startup and conducted depositions with several former employees and executives in 2024 and 2025. In July 2025, Faraday Future disclosed that it and several executives, including founder Jia Yueting, received Wells Notices from the SEC. These notices indicate that the SEC staff had recommended pursuing enforcement action. However, it remains uncertain whether Faraday Future responded to these notices, as the company had disclosed in February that it had not yet done so. In a recent filing, Faraday Future expressed its intention to engage with the SEC to clarify why enforcement action should not be warranted. Additionally, the Department of Justice (DOJ) had also sought information from Faraday Future following the SEC's investigation initiation in 2022, though the DOJ has not confirmed whether it launched a full probe. Historically, it is uncommon for the SEC to refrain from pursuing enforcement after issuing a Wells Notice. A study from the Wharton School in 2020 indicated that approximately 85% of firms receiving such notices end up facing legal action from the SEC. The agency has scrutinized nearly all electric vehicle startups that went public through SPAC mergers in recent years, often reaching settlements. Founded in California in 2014 by Jia Yueting, who previously led a successful tech conglomerate in China, Faraday Future aimed to rival established players like Tesla. The company attracted significant attention with ambitious plans, including a luxury electric SUV known as the FF91. However, financial difficulties soon arose, leading to significant layoffs and a turbulent operational history. Faraday Future recently managed to deliver its first few FF91 SUVs in early 2023, but allegations from former employees claim these were not genuine sales, further complicating the company's standing. The SEC's investigations included inquiries into these sales, which remain contentious. As it continues to navigate its challenges, Faraday Future has adjusted its business model, introducing more affordable electric and hybrid vans from China and exploring new ventures, including rebranding robotics and shifting focus towards cryptocurrency. Despite these efforts, the company faced a warning from Nasdaq regarding its stock price, which has fallen below the minimum threshold, raising concerns about potential delisting.