The Securities and Exchange Commission has closed its investigation into electric vehicle startup Faraday Future, despite SEC staff on the case recommending an 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 people involved in the probe about the closure this past week.

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

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

The financial regulator sent the startup multiple subpoenas, regulatory filings from Faraday Future show. The SEC also took depositions of multiple former employees and executives in 2024 and 2025, three of the people familiar with the case have told TechCrunch.

In July 2025, Faraday Future revealed the SEC had sent the company and multiple executives — including founder Jia Yueting — letters known as “Wells Notices.” The SEC sends Wells Notices when staff working a case have decided to recommend the agency take enforcement action.

“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,” Jia said in a statement Sunday. Faraday Future said the SEC informed the company that it won’t take action against any of its executives, either.

It’s not clear if Faraday Future ever responded to the Wells Notices sent last year. As recently as February, the company disclosed in regulatory filings that it had not. “The Company and executives plan to engage with the SEC to explain why enforcement action is not warranted,” Faraday Future wrote in such a filing last month.

The Department of Justice also sent Faraday Future requests for information after the SEC opened its investigation in 2022. Faraday Future has referred to this as an “investigation” in regulatory filings; the DOJ has never confirmed if it opened a full probe, and it did not respond to an after-hours request for comment.

It is rare for the SEC to not pursue an enforcement action after sending a Wells Notice. One study done at the Wharton School in 2020 showed that around 85% of targets who receive a Wells Notice wind up in court with the SEC.

The SEC investigated nearly every electric vehicle startup that went public in a SPAC merger over the last six years. In almost all of those cases, the agency reached a settlement with the startups. It dismissed an investigation into Lucid Motors in 2023, and as TechCrunch first reported in February, the SEC ended a probe into bankrupt EV startup Fisker late last year.

Origins of the investigation

Faraday Future was founded in California in 2014 by Jia, a businessman who at the time was running a booming tech conglomerate in China known as LeEco. It was one of many new companies trying to become the “next Tesla” or, optimistically, a “Tesla killer.”

Faraday snapped up talent from Tesla, other automakers, and also tech companies like Apple, and at one point employed as many as around 1,400 employees. But things got bumpy quickly. The company turned heads, in both good and bad ways, at the 2016 Consumer Electronics Show, with a flashy concept car and the lofty goal of being 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 nearly out of cash and had laid off or furloughed hundreds of workers. Jia’s company in China had collapsed, and he self-exiled to California as the government in his home country placed him on a debtor blacklist. (It was at this time that a close business associate to Jeffrey Epstein pitched the sex criminal on investing in Faraday Future, as well as other EV startups, as TechCrunch recently revealed. Epstein never invested.)

Faraday Future was rescued by an investment from major Chinese real estate conglomerate Evergrande. But that relationship fell apart quickly, too, with Evergrande walking away by the end of 2018 and Faraday Future laying off even more employees.

Jia nominally stepped aside as CEO in 2019 and also filed for personal bankruptcy to settle billions of dollars of LeEco debt 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 about $1 billion. Members of the newly-appointed public company board believed that Faraday’s executives had misrepresented Jia’s control over the day-to-day operations — especially after a short seller report was published that scrutinized Faraday Future — and formed a special committee to investigate.

That committee hired an outside law firm and a forensic accounting firm, and within the first few months it started reporting its findings directly to the SEC, the three people familiar with the investigation told TechCrunch.

Between January and April 2022, Jia was sidelined as a result of the board’s investigation, a senior VP named Matthias Aydt (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 ultimately resigned after “failure to cooperate with the investigation,” according to company filings, but is now back with Faraday Future.)

The committee’s work also showed that Faraday Future had, in the two years before it went public, survived in part on multi-million-dollar loans made to the company by low-level employees with connections to Jia — known as “related party transactions” in legal parlance.

On March 31, 2022, Faraday Future disclosed that the SEC had opened its investigation. The startup revealed the requests for information from the DOJ in June.

Dodging another bullet

Through the rest of 2022, and amid the early stages of the SEC investigation, employees and people close to Jia waged a campaign to regain control of the board and his company. This eventually resulted in death threats against some directors, who ultimately resigned, paving the way for people close to Jia to run the company once more.

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 had misled investors. The SEC investigators working the case subpoenaed Faraday Future about issues related to these sales, filings show.

Former executives and employees were initially deposed by the SEC in 2024, according to the people familiar with the investigation. The SEC sat some of them for longer depositions in 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 “purported 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 a few 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 turned a publicly-traded biotechnology company into a firm focused on crypto.

Those efforts have not stopped the company’s struggles. On Friday, the company announced it had received a warning from the Nasdaq that its stock price was under the minimum of $1, which could eventually lead to the company being de-listed.

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