The Securities and Exchange Commission has closed its investigation into electric car startup Faraday Future despite SEC staff recommending enforcement action last year, TechCrunch has learned.
Four sources familiar with the investigation, who spoke on condition of anonymity to speak about the government case, told TechCrunch that the SEC notified the company and individuals involved in the investigation of the shutdown last week.
The dismissal of the case comes amid a historic decline in enforcement actions by the SEC, which brought just four cases against public companies in the 2025 fiscal year. the latest report shows. The SEC did not respond to a request for comment after the case.
The research on Faraday Future took about four years. The SEC was investigating whether the EV startup made “false and misleading statements” when it went public in its 2021 merger with a special purpose acquisition company (SPAC), and also whether Faraday Future faked sales of its first electric cars in 2023. claim it is done by at least three former employee whistleblowers.
The financial regulator sent the startup multiple subpoenas, regulatory documents from the Faraday Future show. The SEC also took depositions from multiple former employees and executives in 2024 and 2025, three people familiar with the matter told TechCrunch.
Faraday Future in July 2025 revealed The SEC sent letters known as “Wells Notices” to the company and many executives, including founder Jia Yueting. The SEC sends Wells Notices when caseworkers decide to recommend that the agency take enforcement action.
It is unclear whether Faraday Future ever responded to the Wells Notices sent last year. In February, the company announced in a regulatory filing that it did not. “Company and executives plan to contact SEC to explain why enforcement action not warranted” Faraday Future he wrote in one such appeal last month. On Sunday, a company spokesperson said Faraday Future would share more information on Sunday.
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Ministry of Justice too sent Faraday Future is seeking information after the SEC begins its investigation in 2022. Faraday Future lists it as “research” in regulatory filings; The DOJ never confirmed whether it had opened a full investigation and did not respond to a request for comment after the case.
It is rare for the SEC to take no enforcement action after sending a Wells notice. A 2020 study from the Wharton School showed this about 85% of targets Those who received a Wells notice filed a lawsuit with the SEC.
The SEC has investigated nearly every electric car startup that has gone public in a SPAC merger over the past six years. In almost all these cases, the agency has reached an agreement with the startups. He rejected the investigation At Lucid Motors In 2023 and like TechCrunch it was first reported in FebruaryThe SEC closed its investigation into bankrupt EV startup Fisker late last year.
The origin of the investigation
Faraday Future was founded in California in 2014 by Jia, a businessman who ran the burgeoning tech conglomerate then known as LeEco in China. It was one of many new companies trying to be the “next Tesla” or, more optimistically, the “Tesla killer.”
Faraday recruited talent from tech companies like Tesla, other automakers, and even Apple, and at one point employed about 1,400 people. But things quickly got messy. The company turned heads in both good and bad ways at the 2016 Consumer Electronics Show with its sleek concept car and lofty goal of being. As disruptive as the iPhone.
The company introduced its first vehicle the following year: a luxury electric SUV called the FF91. By the end of 2017, though, the company was almost out of cash laid off or furloughed hundreds of workers. Jia’s company in China collapsed and he exiled himself to California as the government in his home country accommodated him. on the debtor’s blacklist. (It was around this time that a close associate of Jeffrey Epstein pitched the sex offender to invest in Faraday Future as well as other EV startups, As TechCrunch recently revealed. Epstein never invested.)
Faraday was the Future saved by investment From the huge Chinese real estate conglomerate Evergrande. However, this relationship with Evergrande also quickly fell apart He is leaving by the end of 2018 and Faraday Future cuts more jobs.
Jia nominally stepped down as CEO in 2019 and filed at the same time personal bankruptcy personally guaranteed billions of dollars in LeEco debt. But behind the scenes, he was quiet mainly responsible for the company.
This became a problem at Faraday Future It was introduced to the public in 2021 and raised nearly $1 billion. Members of the newly appointed public company’s board believed that Faraday executives had misrepresented Jia’s control over day-to-day operations — especially after the release of a short vendor report examining Faraday Future — and formed a special committee to investigate.
That committee hired an outside law firm and a forensic accounting firm and began reporting its findings directly to the SEC within the first few months, three people familiar with the investigation told TechCrunch.
Between January and April 2022 Jia left out as a result of the board’s investigation, a senior VP named Matthias Aydt (now co-CEO with Jia) was placed on six-month probation, and another VP named Jerry Wang (Jia’s nephew) was suspended. (According to the company, Wang resigned for “failing to cooperate with the investigation.” documentsbut now it’s back with Faraday Future.)
The committee’s case also showed that in the two years before Faraday Future went public, it survived in part on multimillion-dollar loans made to the company by low-level employees with ties to Jia — known in legal parlance as “related party transactions.”
Faraday Future on March 31, 2022 announced The SEC launched an investigation. The beginning revealed Information requests from DOJ in June.
Dodging another bullet
Throughout the rest of 2022 and the early stages of the SEC investigation, employees and people close to Jia campaigned to regain control of the board and the company. This eventually resulted in death threats against some directors eventually resignedIt paves the way for people close to Jia to once again run the company.
Faraday Future finally took delivery of the first few FF91 SUVs in early 2023. Former employees sued the company. claimed that these are not real salesand that the company misled investors. SEC investigators handling the case have issued subpoenas to Faraday Future regarding issues related to those sales.
The former executives and employees were initially deposed by the SEC in 2024, according to people familiar with the investigation. The SEC has put some on hold for longer deposits through the first half of 2025, they said.
Wells’ notice, sent in July 2025, said SEC staff had “made a preliminary decision to recommend that the Commission initiate an enforcement action against the Company for alleged violations of various anti-fraud provisions of the federal securities laws.”
Specifically, the Wells Notice is referred to During the SPAC’s merger process, “false or misleading statements” were made about “related party transactions” and Jia’s “role in the Company.” Jia, his nephew Wang 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 several ways. The company imports more affordable hybrid and electric vans from China. It seems to be sold Rebadged versions of Chinese robotsand became a public biotechnology company turned into a cryptocurrency-focused firm.
These efforts did not stop the company from struggling. On Friday, the company announced it had received a price warning from Nasdaq the minimum was under $1may result in delisting of the company.
