The Securities and Exchange Commission has closed its investigation into electric vehicle startup Faraday Future, despite SEC staffers on the matter recommending enforcement action last year, TechCrunch has learned.
Four sources familiar with the investigation, who were granted anonymity to speak about the government case, told TechCrunch that the SEC informed the company and those involved in the investigation about the closure last week.
A recent report shows that the case has been dismissed amid a historic decline in enforcement actions by the SEC, which has launched only four cases against publicly traded companies in its 2025 fiscal year. The SEC did not respond to requests for comment after hours.
The Faraday future investigation lasted for about four years. The SEC was looking into whether the EV startup made “false and misleading statements” when it took public its merger with a special purpose acquisition company (SPAC) in 2021, and was also investigating whether Faraday Future falsified sales of its first electric vehicles in 2023 — a claim made by at least three former employee whistleblowers.
The financial regulator sent multiple summons to the startup, regulatory filings from Faraday Future show. The SEC also took depositions from several former employees and executives in 2024 and 2025, three people familiar with the matter told TechCrunch.
In July 2025, Faraday Future revealed that the SEC had sent letters, known as “Wells Notices”, to the company and several executives, including founder Jia Yueting. The SEC sends Wells notices when staff working on a case have decided to recommend that the agency take enforcement action.
“Now we can focus all our energy on implementing the strategy. Over the past five years, we had to spend a lot of time, effort and money to cooperate in the investigation,” Zia said in a statement on Sunday. Faraday Future said the SEC has informed the company that it will not take action against any of its executives.
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It is unclear whether Faraday Future ever responded to the Wells notice sent last year. As recently as February, the company revealed in a regulatory filing that it had not done so. “The company and executives plan to engage with the SEC to explain why enforcement action is not necessary,” Faraday Future wrote in such a filing last month.
The Justice Department also sent a request for information to Faraday Future after the SEC launched its investigation in 2022. Faraday Future refers to it as an “investigation” in regulatory filings; The DOJ has never confirmed whether it has opened a full investigation, and it did not respond to an hours-long request for comment.
It is rare for the SEC not to take enforcement action after sending a Wells Notice. A study conducted at the Wharton School in 2020 showed that about 85% of targets that receive Wells notices 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 those cases, the agency reached settlements with the startups. It dismissed the investigation into Lucid Motors in 2023, and as TechCrunch first reported in February, the SEC ended its investigation into bankrupt EV startup Fisker late last year.
Origin of investigation
Faraday Future was founded in 2014 in California by a businessman named Jia, who at the time was running a fast-growing tech conglomerate in China called LeEco. It was one of several new companies trying to become the “next Tesla” or, optimistically, the “Tesla killer”.
Faraday poached talent from Tesla, other automakers and tech companies like Apple, and at one time employed about 1,400 workers. But things quickly went awry. The company turned heads at the 2016 Consumer Electronics Show with a flashy concept car and a lofty goal of being as disruptive as the iPhone, in both good and bad ways.
The company introduced its first vehicle the following year: a luxury electric SUV called the FF91. By the end of 2017, however, the company was nearly out of cash and had laid off or furloughed hundreds of employees. Jia’s company in China had collapsed, and he became self-exiled in California because the government in his home country had blacklisted him as a debtor. (That’s when a close business associate of Jeffrey Epstein pushed 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 major Chinese real estate conglomerate Evergrande. But that relationship also quickly fell apart, with Evergrande leaving by the end of 2018 and Faraday Future laying off even more employees.
Jia nominally stepped down as CEO in 2019 and also filed for personal bankruptcy to settle LeEco’s billions of dollars of debt, which he had personally guaranteed. But behind the scenes, he was still largely in charge of the company.
This became an issue when Faraday Future went public in 2021 and raised nearly $1 billion. Members of the newly appointed public company board believed that Faraday executives had misrepresented Jia’s control over day-to-day operations – particularly after the publication of a short seller report that scrutinized Faraday Future – and a special committee was formed to investigate.
That committee hired an outside law firm and a forensic accounting firm, and within the first few months it began reporting its findings directly to the SEC, three people familiar with the investigation told TechCrunch.
Between January and April 2022, a board investigation resulted in Jia being sidelined, a senior VP named Matthias Eydt (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 “failure to cooperate with the investigation,” according to company filings, but he is now back with Faraday Future.)
The committee’s work also revealed that Faraday Future, in the two years before going public, had survived on multimillion-dollar loans made to the company by low-level employees with ties to Jia – known in legal parlance as “related party transactions”.
On March 31, 2022, Faraday Future revealed that the SEC had begun its investigation. The startup disclosed a request for information from the DOJ in June.
dodge another bullet
Throughout the remainder of 2022, and during the early stages of the SEC investigation, employees and people close to Zia mounted a campaign to gain control of the board and his company. This ultimately resulted in death threats against some directors, who eventually resigned, paving the way for people close to Zia to run the company once again.
Faraday Future finally delivered the first few FF91 SUVs in early 2023. Former employees have sued the company, alleging that these were not true sales, and that the company misled investors. The filing shows that SEC investigators working on the case sent a subpoena to Faraday Future regarding issues related to these sales.
The former executives and employees were initially deposed by the SEC in 2024, according to people familiar with the investigation. The SEC placed some of them on long-term deposits through the first half of 2025, the people said.
The Wells notice, sent in July 2025, said SEC staff had “made a preliminary determination 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 at 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 some ways. The company is importing more affordable hybrid and electric vans from China. It also appears to be selling re-badged versions of Chinese robots, and has transformed a publicly traded biotechnology company into a firm focused on crypto.
Those efforts haven’t stopped the company’s struggles. On Friday, the company announced that it had received a warning from Nasdaq that its share price is falling below the $1 minimum, which could ultimately lead to the company being de-listed.
This story has been updated with a statement from Faraday Future.
