Hustler Words – The Securities and Exchange Commission (SEC) has concluded its extensive four-year investigation into the embattled electric vehicle (EV) startup Faraday Future, a decision that comes despite SEC staff having recommended enforcement action just last year, as learned by Hustler Words. This unexpected closure marks a significant reprieve for the company, which has navigated a tumultuous path since its inception.
Sources close to the probe, who requested anonymity due to the sensitive nature of the government case, confirmed to Hustler Words that the SEC formally communicated the investigation’s termination to Faraday Future and individuals involved this past week. The dismissal is particularly notable given a broader trend of reduced enforcement actions by the SEC, which initiated only four cases against publicly traded companies in its 2025 fiscal year, according to a recent report. The SEC did not respond to inquiries for comment after business hours.
The regulatory scrutiny centered on serious allegations, including whether Faraday Future made "false and misleading statements" during its 2021 public debut via a special purpose acquisition company (SPAC) merger. Furthermore, the SEC delved into claims, raised by at least three former employee whistleblowers, that the company fabricated sales of its inaugural electric vehicles in 2023. Throughout the investigation, the financial regulator issued multiple subpoenas and conducted depositions of numerous former employees and executives in 2024 and 2025, regulatory filings from Faraday Future indicate.
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A pivotal moment arrived in July 2025 when Faraday Future, its founder Jia Yueting, and several executives received "Wells Notices." These notices are typically issued when SEC staff have preliminarily decided to recommend that the agency pursue enforcement action. However, in a surprising turn, Jia Yueting stated on Sunday, "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." Faraday Future further confirmed that the SEC would not pursue action against any of its executives.
It remains unclear if Faraday Future ever formally responded to the Wells Notices, with regulatory filings as recent as February indicating they had not. At that time, the company stated its intention to "engage with the SEC to explain why enforcement action is not warranted." Separately, the Department of Justice (DOJ) also sent information requests to Faraday Future following the SEC’s initial probe in 2022. While Faraday Future referred to this as a "DOJ investigation" in filings, the DOJ has never officially confirmed opening a full inquiry and did not respond to after-hours requests for comment.
The SEC’s decision to drop the case after issuing Wells Notices is highly unusual. A 2020 study from the Wharton School revealed that approximately 85% of targets receiving such notices ultimately face court proceedings with the SEC. This outcome places Faraday Future among a select few EV startups, including Lucid Motors (investigation dismissed 2023) and the now-bankrupt Fisker (probe ended late last year, as first reported by Hustler Words in February), to avoid enforcement action following a SPAC merger-related inquiry. The SEC has investigated nearly every EV startup that went public via SPACs over the past six years, typically reaching settlements in most instances.
A Tumultuous Genesis and Corporate Intrigue
Faraday Future was established in California in 2014 by Jia Yueting, a Chinese businessman known for his then-booming tech conglomerate, LeEco. The company quickly garnered attention, aiming to be the "next Tesla" or even a "Tesla killer," attracting talent from leading automakers and tech giants like Apple. By 2016, its flashy concept car at the Consumer Electronics Show generated both excitement and skepticism, followed by the unveiling of its luxury electric SUV, the FF91, in 2017.
However, the company’s trajectory soon became fraught with challenges. By late 2017, Faraday Future faced a severe cash crunch, leading to hundreds of layoffs. Concurrently, Jia’s Chinese enterprise collapsed, prompting his self-exile to California as he was placed on a debtor blacklist in his home country. (Notably, a business associate of Jeffrey Epstein reportedly pitched the convicted sex offender on investing in Faraday Future and other EV startups during this period, a detail recently uncovered by Hustler Words, though Epstein never invested.)
A lifeline appeared in the form of an investment from Chinese real estate giant Evergrande, but this partnership quickly dissolved by late 2018, resulting in further layoffs. Jia nominally stepped down as CEO in 2019 and filed for personal bankruptcy to address billions in LeEco debt he had personally guaranteed. Yet, behind the scenes, he reportedly maintained significant control over the company.
This dynamic became a critical issue when Faraday Future went public in 2021, raising approximately $1 billion. Following a short-seller report scrutinizing the company, members of the newly appointed public company board suspected that Jia’s continued influence over day-to-day operations had been misrepresented. A special committee was formed, engaging an outside law firm and a forensic accounting firm, which began reporting its findings directly to the SEC within months.
Between January and April 2022, the board’s investigation led to Jia being sidelined, senior VP Matthias Aydt (now co-CEO with Jia) placed on probation, and VP Jerry Wang (Jia’s nephew) suspended. Wang eventually resigned over "failure to cooperate with the investigation" but has since returned to Faraday Future. The committee’s work also uncovered "related party transactions"—multi-million-dollar loans provided by low-level employees with ties to Jia—that had sustained the company in the two years preceding its public offering. The SEC officially opened its investigation on March 31, 2022, with the DOJ’s information requests following in June.
Ongoing Struggles and Future Direction
The period through 2022 saw a campaign by employees and associates close to Jia to regain board control, culminating in death threats against some directors who ultimately resigned, paving the way for Jia’s allies to reassert leadership.
Faraday Future finally delivered its first FF91 SUVs in early 2023, though former employees have since sued the company, alleging these were not genuine sales and that investors were misled. SEC investigators subsequently subpoenaed Faraday Future regarding these sales. The Wells Notice issued in July 2025 specifically cited "purported false or misleading statements" during the SPAC merger process concerning "related party transactions" and Jia’s "role in the Company." Jia, Wang, and two other unnamed employees were among those who received these notices.
Despite the SEC’s decision, Faraday Future continues to face considerable challenges. While still attempting to sell the FF91, the company has diversified its business, importing more affordable hybrid and electric vans from China, seemingly selling re-badged Chinese robots, and even transforming a publicly-traded biotechnology company into a crypto-focused firm. These efforts have yet to stabilize its financial standing. Just last Friday, the company announced a warning from Nasdaq that its stock price had fallen below the minimum $1 threshold, potentially leading to de-listing.
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