The SEC has concluded its investigation in the company and decided not to take any action.
Faraday Future avoids SEC action after a four-year investigation. Regulators scrutinized the company's 2021 reverse merger with a SPAC. Company now faces Nasdaq $1 share price compliance deadline. Few car manufacturers have had a history as turbulent as Faraday Future .
Founded more than a decade ago as one of America’s most promising EV startups, it’s been teetering on the edge of financial collapse for years, but has just reported one of its most significant wins. Over the weekend, Faraday Future revealed that the US Securities and Exchange Commission has concluded its four-year investigation into the company and has decided not to take any action against it. Founder and co-CEO Jia Yueting, as well as Faraday Future President Jerry Wang, have also avoided the court room. Read: After Failing At Cars, Faraday Is Now Building Robots The SEC had been investigating Faraday Future over its 2021 merger with a special purpose acquisition company that allowed it to go public, alleging the company made several false and misleading statements. Throughout the SEC’s investigation, it subpoenaed the company and took depositions from multiple former employees and executives. The Troubles Don't Stop Here Last year, it appeared the SEC was stepping up its action against Faraday Future, issuing ‘Wells Notices’ to Yueting and other executives, notices usually issued when the SEC has been recommended to take enforcement action. According to Tech Crunch, approximately 85 percent of cases where Wells Notices are issued result in the individuals facing the SEC in court. “The conclusion of the SEC’s investigation means that the long-standing overhang and sources of instability that had constrained the Company have now been removed,” Faraday Future said in a statement. “This is the strongest and cleanest response to potential illegal short sellers. Some short sellers used the time when the investigation was still open to spread rumors, defame the Company, create panic, and profit illegally. Now, the SEC’s conclusion means FF’s reputation is being restored, and confidence is coming back.” Admittedly, Faraday Future isn’t out of hot water yet, as it recently received a notice from Nasdaq for failing to meet the minimum $1-per-share price requirement over 180 days. It now has 180 days to boost its shares to over $1 and hopes to do so without issuing a reverse stock split.
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