Faraday Future faces potential SEC enforcement action after three-year probe

The Securities and Exchange Commission (SEC) is poised to take enforcement action against electric vehicle company Faraday Future, its founder Jia Yueting, president Jerry Wang, and two unnamed former employees following a three-year fraud investigation. The SEC’s probe centers on allegedly false and misleading statements made during Faraday Future’s 2021 merger with a special purpose acquisition company (SPAC). The company disclosed receiving “Wells Notices” indicating the SEC staff’s recommendation for enforcement, which could include injunctions, fines, disgorgement, or other penalties. Faraday Future and the executives plan to contest the action, arguing it is unwarranted. The investigation began shortly after the SPAC merger when new board members raised concerns about misleading disclosures, Jia’s control over the company, and questionable financial transactions involving Jia-linked entities. An internal probe confirmed these issues, leading to Jia’s sidelining and Wang’s resignation after he refused to cooperate. The board shared findings with the SEC, which issued subpoenas starting in