The SEC is dropping its four-year investigation into EV startup Faraday Future

The Securities and Exchange Commission has closed its investigation into Faraday Future’s electric car startup, despite SEC officials in the case agreeing to take action last year, TechCrunch has learned.

Four sources with knowledge of the investigation, who were not named to discuss the government’s case, told TechCrunch that the SEC informed the company and people involved in the investigation about the closure last week.

The settlement of the case comes amid a sharp drop in enforcement by the SEC, which only launched 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.

Faraday Future’s research took nearly four years. The SEC is looking into whether the EV startup made “false and misleading claims” when it announced in 2021 its merger with a special purpose vehicle acquisition company (SPAC), and is also investigating whether Faraday Future lied about selling its first electric cars in 2023 – a claim to have been made and at least three former employees.

The financial regulator sent several subpoenas, controlling documents from the Faraday Future exhibition. The SEC also hired several former employees and executives in 2024 and 2025, three of the people familiar with the matter told TechCrunch.

In July 2025, Faraday Future to be revealed The SEC sent the company and several executives — including founder Jia Yueting — letters known as “Wells Notices.” The SEC sends Wells Notices when staff members think they should encourage the agency to take action.

It is unclear whether Faraday Future has responded to Wells’ Notices sent last year. As recently as February, the company disclosed in a regulatory filing that it had not. “The company and management plan to negotiate with the SEC to explain why enforcement is not warranted,” Faraday Future said. he wrote in such files last month. A spokesperson for the company said on Sunday that Faraday Future will share more information on Sunday.

The Ministry of Justice too sending Faraday Future is requesting more information after the SEC opens its investigation in 2022. Faraday Future has referred to this as an “investigation” in the regulatory filing; The DOJ has not confirmed whether it has opened a full investigation, and did not respond to an after-hours request for comment.

It is rare for the SEC not to take enforcement action after sending the Wells Notice. Another study conducted at the Wharton School in 2020 showed this about 85% of the goals recipients of the Wells Notice may be sued by the SEC.

The SEC has investigated nearly all of the electric vehicles that have been floated on the SPAC list over the past six years. In almost all of these cases, the agency ended up dealing with the perpetrators. It ended the investigation at Lucid Motors in 2023, and as TechCrunch first report in FebruaryThe SEC ended its investigation into the troubled EV startup Fisker late last year.

The beginning of the research

Faraday Future was founded in California in 2014 by Jia, an entrepreneur who at the time ran a Chinese tech startup called LeEco. It was one of the new companies trying to be the “next Tesla” or, hopefully, the “Tesla killer.”

Faraday recruited talent from Tesla, other automakers, and tech companies like Apple, and at one point employed about 1,400 employees. But things quickly went wrong. The company turned heads, in both good and bad ways, at the 2016 Consumer Electronics Show, with a sleek looking car and a high-end intent. iPhone-like distractions.

The company unveiled its first vehicle the following year: a luxury electric SUV called the FF91. By the end of 2017, the company was almost broke and had they demoted or demoted hundreds of workers. Jia’s company in China collapsed, and he was exiled to California on his own when the government of his home country impeached him. on the debt blacklist. (It was during this period that a close business partner of Jeffrey Epstein put the sex offender in order to invest in Faraday Future, as well as other EV startups, as TechCrunch recently revealed. (Epstein never made money.)

Faraday Future was save money from the largest Chinese real estate company Evergrande. But that relationship ended quickly, too, with Evergrande to the end of 2018 and Faraday Future is laying off more employees.

Jia nominally stepped down as CEO in 2019 and sued again personal injury to pay off the billions of dollars of LeEco debt that he personally guaranteed. But behind the scenes, he was still especially the company manager.

This became a problem when Faraday Future It became public in 2021 and earned about $1 billion. Members of the board of directors of the newly elected public company believed that Faraday’s executives had misrepresented Jia’s control over day-to-day operations – especially after a summary report of the seller was published that looked closely at Faraday Future – and created a special committee to investigate.

The commission hired an outside law firm and an accounting firm, and in the first few months began reporting its findings directly to the SEC, three people familiar with the investigation told TechCrunch.

Between January and April 2022, Jia they were put aside as a result of the agency’s investigation, senior VP named Matthias Aydt (who is now Co-CEO with Jia) was placed on probation for six months, and another VP named Jerry Wang (who is Jia’s nephew) was suspended. (Wang eventually resigned after “failing to cooperate with the investigation,” according to the company documentsbut now he’s back with Faraday Future.)

The work of the committee also showed that Faraday Future had, two years before it went public, survived in part on loans of millions of dollars given to the company by low-level employees with ties to Jia – called “party-related activities” in legal terms.

On March 31, 2022, Faraday Future to be revealed that the SEC opened its investigation. Introduction to be revealed more requests from the DOJ in June.

Dodging another bullet

Through 2022, and during the early stages of the SEC investigation, employees and people close to Jia campaigned to regain control of the organization and its company. This eventually led to death threats against other directors, who eventually resignedand pave the way for people close to Jia to resume running the company.

Faraday Future finally delivered a limited number of FF91 SUVs in early 2023. Former employees sued the company. saying that this was not a true saleand that the company misled investors. SEC investigators working on the project have subpoenaed Faraday Future over transactions related to the transaction, the filings show.

Former executives and employees were fired by the SEC in 2024, according to people familiar with the investigation. The SEC set some of them up for long-term storage in the first half of 2025, the people said.

Wells’ notice sent in July 2025 said the SEC staff “has determined to file an action against the company related to violations of various anti-fraud provisions in the federal securities laws.”

In particular, the Wells Note mentioned “false or misleading statements” made during the SPAC merger related to “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 is importing cheap hybrids and electric cars from China. It also seems to be selling Chinese robots with badgesand transform a publicly traded biotechnology company in a company that focuses on crypto.

Those efforts did not stop the company’s struggle. On Friday, the company announced that it had received a warning from Nasdaq that its stock price it was less than $1which may ultimately lead to the company’s liquidation.