The SEC just closed its investigation into Faraday Future without taking enforcement action. That’s not the kind of thing that happens very often, and honestly, it’s raising some eyebrows.
For nearly four years, federal regulators were digging into whether the EV startup made false statements when it went public through a SPAC merger in 2021. They were also looking at whether the company faked sales of its first electric vehicles in 2023. Three former employees had blown the whistle on exactly that claim. The SEC sent Wells Notices last July, which is basically the regulatory equivalent of saying “we’re about to come after you.” Yet somehow, weeks later, the whole thing just… stopped.
This is genuinely rare. A study from Wharton showed that around 85% of companies that get Wells Notices end up in court with the SEC. Faraday Future beat those odds dramatically.
The Timeline That Led Here
Faraday Future’s story reads like a fever dream of startup excess. Founded by Jia Yueting in 2014, the company was supposed to be the next Tesla. The vision was flashy, the talent was there, and in 2016 at CES they turned heads with a concept car and big promises. By 2017 they’d revealed the FF91 luxury electric SUV. By the end of that same year? Nearly broke, massive layoffs, and Jia’s Chinese tech empire LeEco had imploded. He’d fled to California after being placed on China’s debtor blacklist.
Evergrande, a Chinese real estate giant, threw them a lifeline. That didn’t work out either. By 2019, Jia had nominally stepped aside as CEO and filed for personal bankruptcy to deal with billions in LeEco debt he’d personally guaranteed. But he was still basically running things from the shadows.
When the company went public in 2021 and raised about a billion dollars, the newly-formed board realized Jia’s actual control over day-to-day operations hadn’t been disclosed properly. They launched an internal investigation and started feeding findings to the SEC. What they uncovered was messy: multi-million-dollar loans from low-level employees with connections to Jia, classic related-party transaction stuff. Between January and April 2022, various executives got sidelined. Then in March, Faraday Future disclosed the SEC investigation.
Where Things Got Murky
After the board investigation kicked into gear, something wild happened. Employees and people close to Jia waged what can only be described as a campaign to retake control of the company. This eventually involved death threats against board members. The directors resigned. People close to Jia got back in charge. It’s the kind of thing that sounds like fiction but actually happened.
Then in early 2023, Faraday Future delivered the first FF91 SUVs. Former employees immediately sued, claiming these weren’t real sales and that the company had misled investors about them. The SEC investigators grabbed subpoenas and started asking questions. They deposed executives and employees initially in 2024, then again in the first half of 2025 with longer sessions.
The Wells Notice in July 2025 specifically referenced false or misleading statements about related-party transactions and Jia’s role in the company. Not just Jia, but his nephew Jerry Wang and two other unnamed employees also got notices. The SEC staff had made a “preliminary determination” to recommend enforcement action. That’s what Wells Notices mean.
The Drop in SEC Enforcement
Here’s the context that makes this closure even stranger. The SEC initiated only four cases against publicly-traded companies in its entire 2025 fiscal year. Four. That’s a historic low. Meanwhile, enforcement actions are collapsing across the board.
The SEC also investigated nearly every EV startup that went public via SPAC over the last six years. In almost every single case, the agency reached a settlement. They dismissed an investigation into Lucid Motors in 2023. They quietly ended the probe into bankrupt EV startup Fisker late last year. But Faraday Future, with its Wells Notices and years of depositions and subpoenas, just got closed without any action.
Faraday Future said in a statement that the SEC informed them no action would be taken against any of their executives either. Founder Jia celebrated being able to “put all our energy into strategy execution” now that they didn’t have to deal with the investigation.
Where Are They Now?
The company is still struggling. They’re trying to sell the FF91, but they’ve also started importing cheaper hybrid and electric vans from China. They’re apparently selling re-badged Chinese robots now too. For some reason they turned a publicly-traded biotech company into a crypto-focused firm. None of it has helped. Last Friday, Nasdaq warned them that their stock price had dropped below a dollar, which could lead to delisting.
The investigation being closed doesn’t solve the underlying problems, and it definitely doesn’t prove the allegations were baseless. Former employees who sued the company over faked sales are still pursuing their cases. The Department of Justice also sent information requests after the SEC opened its investigation, though the DOJ never confirmed if it opened a full probe.
What makes this whole situation curious is the gap between what actually happened and what got investigated. We have documented proof that the company misrepresented Jia’s control. We have whistleblowers saying sales were faked. We have internal investigations that uncovered related-party loans. And yet here we are, with the SEC closing its case and moving on to other priorities.
Maybe there simply wasn’t enough to prosecute. Maybe the company successfully argued their way out of it. Or maybe the SEC just has bigger fish to fry in an era where enforcement resources are apparently stretched thinner than ever before. Whatever the reason, Faraday Future gets to keep trying, at least for now.
