TL;DR
- Faraday Future and top executives may face SEC enforcement actions over alleged SPAC-related fraud.
- Wells Notices were issued to founder Jia Yueting, president Jerry Wang, and two unnamed former employees.
- SEC is investigating “false and misleading statements” made during the 2021 SPAC merger process.
- An internal board probe confirmed concealed control by Jia and questionable money flows.
- Resignations, whistleblower complaints, and DOJ involvement have deepened scrutiny.
- Despite controversies, Jia re-assumed leadership and became co-CEO in April 2025.
SEC Targets Faraday Future’s Leadership with Wells Notices
The U.S. Securities and Exchange Commission (SEC) has informed Faraday Future founder Jia Yueting and president Jerry Wang that they may soon face enforcement actions. This follows a three-year investigation into alleged fraud during the company’s 2021 SPAC merger.
Faraday Future disclosed in a regulatory filing that it received Wells Notices—formal communications indicating that the SEC’s enforcement staff intends to recommend action. Two former employees, whose names were not disclosed, were also notified.
Alleged Misleading Disclosures and SPAC Irregularities
The SEC’s case centers on “purported false and misleading statements” made by Faraday Future during its debut via special purpose acquisition company (SPAC) in 2021. Key areas of concern include:
- Undisclosed influence held by Jia Yueting
- Financial relationships between Faraday Future and entities connected to Jia
- Inaccurate public disclosures affecting investors and regulators
If the Commission proceeds, it may seek an injunction, civil penalties, disgorgement, or cease-and-desist orders for future violations of securities laws.
Internal Probe Confirmed Governance Issues
Concerns about the company’s transparency emerged immediately after its public debut. According to TechCrunch, newly appointed board members initiated an internal investigation that uncovered:
- Misleading investor communications
- Undisclosed control and decision-making power by Jia
- Questionable money flows between Faraday Future and Jia-linked entities
The board hired an elite law firm and a forensic accounting firm to verify claims, which led to the sidelining of Jia and the resignation of Wang, who refused to cooperate.
Timeline of Investigations and Escalations
| Year | Event |
| 2021 | Faraday Future goes public via SPAC |
| 2022 | SEC subpoenas begin; DOJ inquiry reportedly initiated |
| 2022 | FF Global pressures board, offers $700K to remove Brian Krolicki |
| 2022 | Board members receive death threats, ultimately resign |
| 2023 | EV SUV deliveries begin; whistleblowers allege fake sales |
| 2025 | Jia re-appointed co-CEO, despite prior findings against him |
| July 2025 | SEC issues Wells Notices to Jia, Wang, and two unnamed former employees |
DOJ and Whistleblower Allegations Intensify the Legal Risks
In parallel to the SEC, the U.S. Department of Justice (DOJ) reportedly began investigating Faraday Future in 2022. While the current status of that inquiry remains unclear, multiple whistleblower claims have emerged:
- Misleading EV delivery data
- Falsified financials to attract investment
- Inflated demand reporting and fake sales to insiders
Despite this, the company pushed ahead with product launches and funding rounds—while retaining Jia in top leadership roles.
Jia Yueting’s Return to Power
Despite his previous ousting, Jia regained influence through FF Global, a major shareholder entity with deep ties to him. By April 2025, he was reinstated as co-CEO, sharing power with Matthias Aydt.
The move raises eyebrows among regulators and shareholders, especially given Jia’s history of corporate governance violations both in China and the U.S.
Industry Response and Investor Impact
The Faraday Future saga highlights increasing scrutiny of SPAC-era public listings. Several other electric vehicle companies that went public via SPAC—such as Lordstown Motors and Nikola—have also faced SEC actions or criminal charges.
Investors in Faraday Future now face:
- Increased regulatory uncertainty
- Potential stock volatility or delisting
- Ongoing reputational damage tied to executive actions
What’s Next for Faraday Future?
Faraday Future’s leadership claims it will engage with SEC staff to argue against enforcement. However, precedent suggests such notices often lead to formal charges. If penalties are imposed, they could threaten:
- Operational continuity
- Access to capital markets
- Customer confidence in vehicle orders and after-sales support
With the company already struggling to meet production targets, any legal roadblocks may further delay its turnaround.
