Faraday Future Intelligent Electric Inc. (NASDAQ:FFAI) stock declined 9% following the company’s disclosure that it received a Wells Notice from the U.S. Securities and Exchange Commission (SEC), signaling possible enforcement action against the electric vehicle manufacturer.
The California-based EV maker revealed that SEC staff have made a preliminary decision to recommend enforcement proceedings against the company, two current executives — including Global President Jerry Wang and YT Jia — and two former employees. The potential allegations relate to violations of federal securities laws’ anti-fraud provisions.
The company’s filing indicates the SEC’s concerns center on allegedly false or misleading statements made during Faraday’s 2021 PIPE financing and SPAC merger, with specific focus on related-party transactions and YT Jia’s involvement.
The Wells Notice arrived as Faraday announced it had secured around $105 million in new financing, including $82 million in commitments mostly through unsecured convertible notes and warrants. The company said these funds will support the upcoming launch of its FX Super One vehicle and accelerate development of its FF and FX brands alongside AI technologies.
The financing is primarily provided by existing institutional investors, including Master Investment Group, the firm’s strategic partner in the Middle East. The FX Super One is set to launch on July 17, 2025.
A Wells Notice represents a preliminary determination by SEC staff and is not an official charge. Faraday Future said it intends to engage with the Commission to demonstrate why enforcement action is unwarranted while reaffirming its “Shareholder First” commitment.
Faraday Future Intelligent Electric stock price
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