The Securities and Exchange Commission (SEC) closed its investigation into electric vehicle startup Faraday Future, despite recommending an enforcement action last year, according to four sources familiar with the investigation. The company had faced allegations of making “false and misleading statements” during its 2021 SPAC merger and faking sales of its first electric vehicles in 2023.
The SEC began investigating Faraday Future nearly four years ago, sending multiple subpoenas and taking depositions from former employees and executives. In July 2025, the company received a Wells Notice from the SEC staff recommending an enforcement action against the company.
However, after receiving the closure notice, Faraday Future stated that it would not take action against any of its executives, including founder Jia Yueting. The company plans to engage with the SEC to explain why enforcement action is not warranted.
The investigation marks one of several high-profile cases involving electric vehicle startups, which have faced scrutiny from regulators over their business practices and financial disclosures. Faraday Future had previously been accused by former employees and short sellers of faking sales and making misleading statements about its operations and finances.
Despite the closure of the SEC investigation, Faraday Future continues to face challenges, including a warning from Nasdaq that its stock price is under $1, which could lead to de-listing. The company has also undergone significant changes in recent months, shifting its focus towards importing more affordable hybrid and electric vans from China and selling re-badged versions of Chinese robots.
The closure of the SEC investigation raises questions about the effectiveness of regulatory oversight and whether companies like Faraday Future are able to avoid accountability for their actions. The incident highlights the importance of transparency and compliance in the electric vehicle industry, which is heavily regulated by government agencies such as the SEC.
Source: https://techcrunch.com/2026/03/22/the-sec-drops-its-four-year-old-investigation-into-ev-startup-faraday-future