The United States Securities and Exchange Commission (SEC) has officially closed its investigation into electric vehicle startup Faraday Future. However, an SEC employee on the case recommended an enforcement action last year.
The discharge of Faraday Future turns out to be a historical moment in enforcement actions by the SEC. This case was one of the four initiated by SEC cases against publicly traded companies in its 2025 fiscal year.
The probe into Faraday Future lasted for four years. The SEC was investigating whether the EV startup made any “false and misleading statements” after going public in a 2021 merger with a special purpose acquisition company (SPAC). SEC was also looking into whether Faraday Future fabricated the sales of its first electric vehicles in 2023, which had been claimed by at least three former employees-turned-whistleblowers.
The SEC started by sending the startup multiple subpoenas, regulatory filings from Faraday Future show. It also upheld depositions of multiple former employees and executives throughout 2024 and 2025. In July 2025, Faraday Future officially revealed that the SEC had sent the company and many of its executives—including founder Jia Yueting—letters termed as “Wells Notices.” Well Notices are sent by the SEC when the officials working the case decide to recommend that the agency take enforcement action.
“We can now put all our energy into strategy execution. Over the past five years, we had to spend a great deal of time, effort, and money on cooperating with the investigation,” Yueting said in a statement. Faraday Future confirmed that the SEC informed them that it won’t be taking any further action against any of its executives as well.
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However, there is no clarity on whether Faraday Future ever responded to the Wells Notices sent last year. As of February, the company revealed in regulatory filings that it had not. “The Company and executives plan to engage with the SEC to explain why enforcement action is not warranted,” Faraday Future revealed in such a filing last month.
The U.S. Department of Justice (DOJ) had also sent a request to Faraday Future regarding information following the SEC’s opening of its investigation in 2022. Nevertheless, Faraday Future has referred to this as an “investigation” in regulatory filings while there was no confirmation from the DOJ.
It is unlikely for the SEC not to pursue an enforcement action following the production of a Wells Notice. According to a study done at the Wharton School in 2020, around 85% of targets who receive a Wells Notice end up in court with the SEC.
In the past six years, the SEC has investigated almost every electric vehicle startup that went public in a SPAC merger. In the majority of those cases, the agency settled with the startups. The SEC had earlier dismissed an investigation into Lucid Motors in 2023 and ended a probe into Fisker in 2025.
