The Securities and Exchange Commission has closed its investigation into electric vehicle startup Faraday Future, despite SEC officials in the case recommending enforcement action last year, TechCrunch has learned.
Four sources with knowledge of the investigation, who spoke on condition of anonymity to speak about the government case, told TechCrunch that the SEC informed the company and people involved in the investigation of the closure last week.
The dismissal of the case comes amid a historic drop in enforcement action by the SEC, which launched just four cases against publicly traded companies in the 2025 fiscal year, a recent report shows. The SEC did not respond to a request for comment after business hours.
The study of Faraday Future lasted almost four years. The SEC investigated whether the EV startup made “false and misleading statements” when it announced a 2021 merger with a special purpose acquisition company (SPAC), and also investigated whether Faraday Future faked sales of its first electric vehicles in 2023 — an allegation that has been made by at least three former employee whistleblowers.
The financial regulator sent several subpoenas to the startup, regulatory filings from Faraday Future show. The SEC also took waivers from several former employees and executives in 2024 and 2025, three of the people familiar with the matter have told TechCrunch.
In July 2025, Faraday Future revealed that the SEC had sent the company and several directors – including founder Jia Yueting – letters known as “Wells Notices”. The SEC sends Wells notices when staff working on a case have decided to recommend that the agency take enforcement action.
“We can now devote all our energy to strategy execution. Over the past five years, we have had to spend a lot of time, effort and money to cooperate with the investigation,” Jia said in a statement on Sunday. Faraday Future said the SEC informed the company that it also will not take action against any of its executives.
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It is not clear whether Faraday Future ever responded to the Wells messages sent last year. As recently as February, the company disclosed in regulatory filings that it had not. “The company and executives plan to engage with the SEC to explain why enforcement is not warranted,” Faraday Future wrote in one such filing last month.
The Justice Department also sent Faraday Future requests for information after the SEC opened its investigation in 2022. Faraday Future has referred to this as an “investigation” in regulatory filings; The DOJ has never confirmed whether it opened a full investigation, and it did not respond to a request for comment after business hours.
It is rare for the SEC not to pursue an enforcement action after sending a Wells notice. A study conducted at the Wharton School in 2020 found that about 85% of targets that receive a Wells Notice end up in court with 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 these cases, the agency settled with the startups. It dismissed an investigation into Lucid Motors in 2023, and as TechCrunch first reported in February, the SEC closed an investigation into bankrupt EV startup Fisker late last year.
The origin of the study
Faraday Future was founded in California in 2014 by Jia, a businessman who at the time ran a booming tech conglomerate in China known as LeEco. It was one of many new companies trying to become the “next Tesla” or, optimistically, a “Tesla killer.”
Faraday brought in talent from Tesla, other automakers, and also tech companies like Apple, and at one point employed as many as around 1,400 employees. But things quickly turned uneven. The company turned heads, in both good and bad ways, at the 2016 Consumer Electronics Show with a flashy concept car and the lofty goal of being as disruptive as the iPhone.
The company unveiled 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 and had laid off or laid off hundreds of workers. Jia’s business in China had collapsed and he exiled himself to California when the government in his home country placed him on a debtor blacklist. (It was at this point that a close business 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 Future was saved by an investment from the large Chinese real estate conglomerate Evergrande. But that relationship also fell apart quickly, with Evergrande walking away at the end of 2018 and Faraday Future laying off even more employees.
Jia nominally stepped aside as CEO in 2019 and also filed for personal bankruptcy to settle billions of dollars of LeEco debt that he had personally guaranteed. But behind the scenes, he was still largely responsible for the company.
This became an issue when Faraday Future went public in 2021 and raised about $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 – particularly after a short vendor report was published that scrutinized Faraday Future – and formed a special committee to investigate.
That committee hired an outside law firm and a forensic audit firm and within the first few 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 sidelined as a result of the board’s investigation, a 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 ultimately resigned after “failing to cooperate with the investigation,” according to company documents, but is now back with Faraday Future.)
The committee’s work also showed that in the two years before it went public, Faraday Future had survived in part on multimillion-dollar loans 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 startup disclosed the requests for information from the DOJ in June.
Dodges another bullet
Throughout the rest of 2022, and amid the early stages of the SEC investigation, employees and people close to Jia waged a campaign to regain control of the board and his company. This ultimately resulted in death threats against some directors who ultimately resigned, paving the way for people close to Jia to lead the company again.
Faraday Future finally delivered the first few FF91 SUVs in early 2023. Former employees have sued the company, alleging that there were no genuine sales and that the company had misled investors. The SEC investigators working on the case subpoenaed Faraday Future on issues related to those sales, filings show.
Former executives and employees were initially ousted by the SEC in 2024, according to people familiar with the investigation. The SEC set some of them for longer filings in the first half of 2025, the people said.
The Wells notice, sent in July 2025, said SEC staff had made “a preliminary decision to recommend that the Commission file 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 Wells Notices.
Faraday Future is still trying to sell the FF91, but it has also recently changed its business in a few ways. The company imports more affordable hybrid and electric vans from China. It also appears to be selling re-badged versions of Chinese robots and turned a publicly traded biotech firm into a crypto-focused firm.
That effort hasn’t stopped the company’s struggles. On Friday, the company announced that it had received a warning from Nasdaq that the share price was below the minimum of $1, which could ultimately lead to the company being delisted.
This story has been updated with a statement from Faraday Future.