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Electric vehicle startup Faraday Future announced Sunday that the US Securities and Exchange Commission (SEC) has concluded its nearly four-year investigation without taking any enforcement action against the company or its executives.

The California-based EV maker said the closure clears a path for pursuing strategic partnerships and financing, which had been limited due to compliance concerns during the probe.

"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," founder Jia Yueting said in a statement.

The SEC had investigated Faraday Future over claims of "false and misleading statements" during its 2021 public listing through a merger with a special purpose acquisition company (SPAC).

The agency also looked into allegations that the company misrepresented sales of its first electric vehicles in 2023, claims raised by multiple former employees.

According to Reuters, during the probe, the SEC issued subpoenas and depositions to Faraday Future's executives and former employees between 2022 and 2025.

In July 2025, the company and certain executives, including Jia, received Wells Notices, which signal that SEC staff had initially recommended pursuing enforcement action.

Faraday Future Clears SEC Probe

Despite the unusual step of closing the investigation after Wells Notices, Faraday Future said it received official confirmation that no action would be taken.

This is rare, as roughly 85% of Wells Notices typically lead to enforcement, according to a 2020 Wharton School study.

The SEC's decision comes amid a historically low year for enforcement, with just four cases initiated against publicly traded companies in its 2025 fiscal year.

Analysts note the agency has frequently targeted EV startups going public via SPACs, often resulting in settlements, as seen with Lucid Motors and Fisker.

Faraday Future, founded in California in 2014 by Jia Yueting, aimed to compete with Tesla with its luxury electric SUV, the FF91, TechCrunch reported.

The company faced financial challenges early, including layoffs and the collapse of Jia's Chinese tech conglomerate, LeEco.

Strategic investments, including one from Evergrande, provided temporary relief, but Faraday Future continued to face cash flow and operational hurdles.

The SEC investigation added pressure as Faraday Future tried to regain stability and deliver vehicles.

The first FF91 SUVs reached customers in early 2023, though some former employees later alleged that these sales were misrepresented to investors.

The company still faces challenges, including a Nasdaq warning that its stock price remains below $1, risking potential delisting.

Tags

EV, SEC