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After a nearly four-year investigation, the Securities and Exchange Commission has closed its probe into electric vehicle startup Faraday Future. The SEC was looking into whether the company made false and misleading statements when it went public in a 2021 SPAC merger, as well as allegations that Faraday faked the sales of its first electric vehicles in 2023. Despite SEC staff recommending enforcement action last year, the agency ultimately decided not to pursue the case against Faraday Future.
Why it matters
The dismissal of the SEC’s investigation is a rare outcome, as the agency typically takes enforcement action in around 85% of cases where it sends a ‘Wells Notice’ informing a company of its intent to file charges. The closure of the Faraday Future probe also comes amid a broader decline in SEC enforcement actions against publicly-traded companies.
The details
The SEC investigation into Faraday Future lasted nearly four years and involved multiple subpoenas, depositions of former employees and executives, and the issuance of ‘Wells Notices’ to the company and several individuals last year. The regulator was looking into whether Faraday made false statements about related party transactions and the role of founder Jia Yueting during its SPAC merger, as well as allegations that the company faked initial FF91 SUV sales.
- The SEC opened its investigation into Faraday Future in 2022.
- The SEC sent ‘Wells Notices’ to the company and several executives in July 2025, indicating staff planned to recommend enforcement action.
- The SEC informed Faraday Future and those involved that it was closing the investigation this past week.
The players
Faraday Future
An electric vehicle startup founded in 2014 that went public through a SPAC merger in 2021, drawing scrutiny from the SEC.
Jia Yueting
The founder of Faraday Future who maintained significant control over the company despite nominally stepping aside as CEO in 2019.
Securities and Exchange Commission (SEC)
The U.S. financial regulator that opened an investigation into Faraday Future in 2022 but has now closed the case without taking enforcement action.
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The takeaway
The SEC’s decision to drop its long-running investigation into Faraday Future, despite staff recommendations for enforcement action, highlights the challenges the agency has faced in policing misconduct among electric vehicle startups that went public through SPAC mergers. The closure of the case also reflects a broader decline in SEC enforcement actions, raising questions about the regulator’s ability to hold companies accountable.
