Jia Yueting Announces SEC Five-Year Investigation Closed Without Penalty; FF Faces 180-Day "Shell Protection" Challenge | Big Fish Finance

Question: Can FF’s dual-track strategy turn around its delisting crisis?

March 23, Faraday Future (FF) founder Jia Yueting issued an open letter announcing that the U.S. Securities and Exchange Commission (SEC) investigation into the company, which lasted over four years, has officially concluded with no penalties imposed.

However, while the compliance risk has been lifted, Faraday Future is facing another urgent capital market challenge: the company recently received a delisting warning from Nasdaq, requiring it to boost its persistently low stock price within 180 days.

SEC Investigation Concludes, Jia Yueting Says “Regained Entrepreneurial Dignity”

In the letter, Jia Yueting disclosed that the SEC investigation began in October 2021 and lasted 1,632 days. The investigation was initiated by an independent director of the SPAC merger partner at the time. On March 18, FF received formal notice that the SEC decided not to take enforcement action against the company or Jia Yueting and other key executives.

Over the past nearly five years, compliance issues have been a persistent legal risk hanging over FF. During the investigation, the company’s financing and partnerships faced substantial restrictions, and major investment banks and institutional investors often found it difficult to engage in substantive cooperation with FF due to compliance concerns.

Regarding the lengthy investigation process, Jia Yueting expressed long-standing suppression in his letter. He stated, “Under the shadow of unresolved investigations, no matter how much pressure and criticism I endure personally, no matter how unfair and challenging FF faces, we choose to persist and endure. Even if we lose teeth, we can only swallow the pain.” He believes that the conclusion without penalties is a strong counterattack against short-sellers and has allowed him to “reclaim the long-missed dignity of an entrepreneur.”

Jia Yueting expects that after the case is closed, the company can thoroughly shed its historical burdens, resume strategic financing and partnerships, and more efficiently attract top global AI talent.

Facing Delisting Warning, Promising “No Dilution” and Betting on Dual-Track Strategy

Although legal obstacles have been cleared, the current feedback from the capital markets remains cold.

Jia Yueting admitted in the open letter that due to unresolved external investigations, interference from short-selling institutions, and internal operational shortcomings, FF’s stock price has fallen sharply from $3.60 when he took over as co-CEO last year to below $0.30 today. In this context, FF received a notice from Nasdaq on March 20 regarding a 180-day remediation period. According to regulations, companies at risk of delisting typically need to maintain a stock price above $1 for 30 consecutive trading days.

To preserve its listing status, U.S. startups often resort to reverse stock splits to artificially boost share prices. In response, Jia Yueting proposed a challenging financial goal: the company will do its utmost to restore stock price compliance without dilution. This means FF must achieve genuine market value growth within the next six months through substantial fundamental improvements or external funding. Jia Yueting revealed plans to rapidly generate positive cash flow and outlined four phases from 180 days to five years.

To support this “delisting defense,” FF has also begun a comprehensive operational shift. On March 24, the company will move out of its 12-year-old founding headquarters (original Nissan North America headquarters) and officially relocate to Silicon Beach in Los Angeles.

On the business front, FF aims to convey a broader commercial story beyond just car manufacturing. Besides continuing deliveries of existing models and launching the new FX mass-market brand, Jia Yueting emphasized progress in the robotics sector. He stated that FF is currently the first U.S. company to deliver both humanoid robots and bionic robots, and plans to fully develop a “electric vehicle + robotics” dual-track strategy.

From the LeEco crisis to building cars in the U.S., Jia Yueting’s entrepreneurial journey has been marked by controversy. Facing the upcoming capital market test, he concluded his open letter by saying, “I believe many entrepreneurs struggling forward will resonate — the true way to shed labels is never through explanations, but through results.”

As of the close on March 20, FF’s stock price was only $0.2698, nearly 80% below its high at the beginning of the year. Its total market value has fallen below $100 million. With a quarterly loss exceeding $200 million and only 16 cars delivered in 2025, whether its new business vision can regain investor confidence remains to be seen under the scrutiny of the extremely demanding capital markets.

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Reporter: Dulin Editor: Sun Feifei Proofreader: Yang HuoFang