Faraday Future is facing SEC enforcement after a three-year fraud probe.
The SEC sent Wells Notices to founder Jia Yueting and president Jerry Wang. It warns the agency plans to pursue action over alleged false and misleading statements related to Faraday’s 2021 SPAC merger. Two unnamed former employees are also implicated.
The company’s regulatory filing says the SEC may seek injunctions, fines, disgorgement, or other penalties. 
Faraday Future, Jia, and Wang "plan to engage with the Commission staff about why an enforcement action is not warranted."
TechCrunch learned the SEC has taken depositions of former employees recently. The probe kicked off shortly after Faraday went public in July 2021.
New SPAC-era board members raised alarms about misleading investor statements and hidden control exerted by Jia. They found troubling financial dealings linked to Jia. A full internal probe confirmed these issues.
Jia was sidelined, and Wang (his nephew) resigned after refusing to cooperate. The board provided details to the SEC, which issued subpoenas starting March 2022. The DOJ is also investigating, but that probe’s status is unknown.
The SEC’s Los Angeles office has led the investigation that has dragged on for three years. Faraday disclosed subpoenas but didn’t reveal enforcement was likely until now.
In the meantime, Jia regained control. The company’s board faced pressure from FF Global, a major shareholder group tied to Jia, which pushed for board changes.
Co-CEO Matthias Aydt even offered to pay a board member $700,000 to leave. By late 2022, board members received death threats and all eventually stepped down. FF Global secured financing to keep Faraday afloat.
Faraday rolled out its electric SUV in 2023, amid whistleblower claims the sales were fake. Jia was named co-CEO again in April.
The SEC move signals fresh trouble for Faraday Future just as the company tries to stabilize and grow.
Links: Faraday Future website, SEC filing
