Faraday Future has formally asked the SEC to investigate alleged illegal short selling and market manipulation targeting the company's stock. The referral comes weeks after the SEC closed its own four-year probe into Faraday Future without taking enforcement action against the company or its executives.
Faraday Future Intelligent Electric Inc. has formally asked the U.S. Securities and Exchange Commission to investigate alleged illegal short selling and market manipulation, marking the electric-vehicle maker's most aggressive regulatory action since a four-year SEC probe into the company closed without penalties in March.
The company submitted a Regulatory Referral Letter to the SEC on May 28, citing evidence of conduct by Hua Qixin and associates that it said involved the dissemination of false information, defamatory statements and deliberate market panic designed to distort investor understanding of the company's fundamentals, according to a statement.
"We have the confidence, the evidence, and the determination to continue protecting the interests of the Company, our stockholders, and long-term investors through lawful and compliant means," said YT Jia, Faraday Future's founder and global CEO. The company will pursue "every necessary judicial and regulatory tool to safeguard an open, fair, and law-abiding capital market environment," he said.
The referral represents the external pillar of a five-part transformation initiative Jia launched after being acknowledged and appointed global CEO. Internally, the company is restructuring across strategy, product technology, finance, capital and its AI operating system. Externally, Faraday Future said it will pursue "increasingly decisive, proactive, and systematic legal and regulatory actions" against alleged illegal short selling and disinformation.
Regulatory Overhang Lifted, Then Replaced
The SEC's decision in March to close its investigation into Faraday Future without enforcement action removed a multi-year overhang that had weighed on the stock since 2022. The probe had examined disclosures and business practices at the California-based company, which went public via a SPAC merger in 2021. The closure cleared Jia, global president Jerry Wang and other executives of any wrongdoing, according to the company's fourth-quarter earnings call on May 14.
Faraday Future's stock has traded under pressure even after the SEC probe closed. The company received a notice from Nasdaq on March 20 granting 180 days to regain compliance with the exchange's minimum bid price requirement. Management has said it intends to avoid a reverse stock split, instead pursuing share repurchases by executives and employees alongside legal action against alleged market manipulation.
The company reported stockholders' equity of $7.7 million at the end of 2025, reflecting impairment charges and fair-value adjustments on convertible notes. Operating cash outflow totaled $107.5 million for the full year, though the company generated $161.4 million in financing cash inflow, double the prior year's total.
Dual-Engine Strategy Faces Market Skepticism
Faraday Future is transitioning from a pure EV manufacturer to what it calls an embodied AI ecosystem company, pursuing both electric vehicles and robotics. The company delivered 22 EAI robotics units by March, generating positive gross margin in the first quarter after launch, and reported over 1,200 non-binding pre-orders. The FX Super One multi-purpose vehicle has accumulated more than 11,000 pre-orders.
The company's market capitalization remains constrained by its low share price and the Nasdaq compliance notice. Management has said it is engaging with over 30 investment institutions following a Hong Kong investor event in February, and has canceled 44.5 million warrants to simplify its capital structure and reduce potential dilution.
Faraday Future said it will continue to work with legal counsel and relevant authorities, reserving the right to pursue further legal action in the United States, China and other jurisdictions. The company has invited stockholders and the public to submit evidence of alleged illegal short selling to its investor relations email.
This article is for informational purposes only and does not constitute investment advice.
