The Securities and Exchange Commission has closed its investigation into electric vehicle startup Faraday Futures, despite SEC staff recommending enforcement action in the case last year, TechCrunch has learned.

Four sources familiar with the investigation, who spoke on condition of anonymity to discuss the government case, told TechCrunch that the SEC notified the company and those involved in the investigation of the closure last week.

A recent report showed that the dismissal of the case comes amid a historic decline in enforcement actions by the SEC, which launched just four cases against publicly traded companies in its 2025 fiscal year. The SEC did not respond to an after-hours request for comment.

Faraday’s investigation of the future continued for about four years. The SEC was looking into whether the EV startup made “false and misleading statements” when it went public after a 2021 merger with a special purpose acquisition company (SPAC), and was also investigating whether Faraday Future faked sales of its first electric vehicles in 2023 — a claim made by at least three former employees.

The financial regulator sent the startup several subpoenas, regulatory filings from Faraday Futures Show. The SEC also took depositions from several former employees and executives in 2024 and 2025, three people familiar with the case told TechCrunch.

In July 2025, Faraday Futures disclosed that the SEC had sent letters known as “Wells Notices” to the company and several executives — including founder Jia Yueting. The SEC sends a Wells notice when staff working on a case has decided to recommend enforcement action to the agency.

“Now we can put all our energy into implementing the strategy. In the last five years, we have had to spend a lot of time, effort and money to support investigations,” Jia said. statement Sunday. Faraday Futures said the SEC informed the company that it would not take action against any of its executives.

It’s unclear whether Faraday Futures ever responded to Wells’ notices sent last year. As recently as February, the company disclosed in a regulatory filing that it had not. Faraday Future wrote In a similar filing last month.

Department of Justice too sent Faraday Futures requested the information after the SEC launched its investigation in 2022. The DOJ never confirmed whether it had opened a full investigation, and did not respond to an hours-after-hours request for comment.

It is rare for the SEC not to take enforcement action after sending a Wells Notice. A 2020 study at the Wharton School showed this. About 85 percent of the targets Those who receive a Wells notice go to 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 these cases, the agency settled with the startups. He dismissed the investigation. In 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 the investigation

Faraday Future was founded in California in 2014 by Jia, who at the time ran a tech group known as LeEco in China. It was one of many new companies trying to be the “next Tesla” or, hopefully, the “Tesla killer.”

Faraday acquired talent from tech companies like Tesla, other automakers, and Apple, and at one point employed about 1,400 employees. But things quickly got messy. The company showed off at the 2016 Consumer Electronics Show, in both good and bad ways, a shiny concept car and a lofty goal. As disruptive as the iPhone.

The company revealed its first vehicle the following year: a luxury electric SUV called the FF91. By the end of 2017, though the company was almost cash-strapped and had Hundreds of workers were laid off or laid off.. Jia’s company in China collapsed, and he went into self-imposed exile in California because the government in his home country held him. In debtor blacklist. (That was when a close business associate of Jeffrey Epstein pitched the sex offender for investing in Faraday Future as well as other EV startups, as TechCrunch recently revealed. Epstein never invested.)

Faraday had a future. Saved from investment from major Chinese real estate group Evergrande. But this relationship quickly fell apart even with Evergrande. To be gone by the end of 2018 And Faraday Future is laying off more employees.

Jaya nominally stepped down as CEO in 2019 and also filed a petition. Personal bankruptcy He personally guaranteed LeEco’s multi-billion dollar debt settlement. But behind the scenes, he was still. Largely in charge of the company.

This became a problem when Faraday’s future Released in 2021 and raised nearly $1 billion. Members of the newly appointed public company board believed that Faraday executives had misrepresented Jia’s control of day-to-day operations—especially after the publication of a brief Seller Report that examined Faraday Futures—and formed a special committee to investigate.

The committee hired an outside law firm and a forensic accounting firm, and in 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, Jaya was pushed aside As a result of the board’s investigation, a senior VP named Matthias Aydt (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 “failing to cooperate with the investigation,” according to the company. Filingbut now Faraday is back with Future.)

The committee’s work also showed that Faraday Futures, in the two years before going public, survived in part on multimillion-dollar loans made to the company by low-level employees affiliated with Jia — known in legal parlance as “related party transactions.”

Faraday Futures on March 31, 2022 Disclosure That the SEC had begun its investigation. The beginning Disclosure Information requests from the DOJ in June.

Dodging another bullet

For the remainder of 2022, and amid the early stages of an SEC investigation, employees and those close to Jia campaigned to regain control of the board and his company. This resulted in death threats against some of the directors. Finally resignedThe way was paved for people close to Jaya to once again run the company.

Faraday Future finally delivered the first few FF91 SUVs in early 2023. Former employees sued the company alleging that these were not genuine sales, and that the company had misled investors. SEC investigators working on the case subpoenaed Faraday Futures about problems related to those sales, the filing shows.

The former executives and employees were initially deposed by the SEC in 2024, according to people familiar with the investigation. The SEC made some of them sit for lengthy statements in the first half of 2025, the people said.

The Wells notice, sent in July 2025, said the SEC staff had “made a preliminary determination that the Commission recommend that it file an enforcement action against the company alleging violations of various anti-fraud provisions of the federal securities laws.”

In particular, Wells notes referred to “implied false or misleading statements” made during the SPAC merger process about “related party transactions” and Jia’s “role in 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 sell out. Re-seeded versions of Chinese robotsand became a publicly traded biotechnology company. At a firm focused on crypto.

These efforts have not stopped the company’s struggles. On Friday, the company announced that it had received a warning from Nasdaq that its stock price The minimum was less than $1.which may eventually lead to delisting of the company.

This story has been updated with a statement from Faraday Future.