EV SPAC Faraday Future now has DOJ’s attention – Vidak For Congress

EV SPAC Faraday Future now has DOJ's attention – Vidak For Congress 1

The DOJ’s request for information relates to the SEC probe, according to a filing of securities filed Thursday by the electric vehicle startup. Faraday said it is “in the process of responding to, and intends to fully cooperate with, such a request.”

The disclosure comes just a day after a Faraday Future said at an investor presentation it plans to open a factory in China as early as 2025.

The SEC subpoenaed several key Faraday Future executives last March, a move prompted by the company’s own internal investigation.

The internal review, conducted by a special committee of directors, found that employees had made false statements to investors during the 2021 special-purpose acquisition of the company, and that the “company culture was not giving sufficient priority to compliance.” For example, the committee found that the startup’s claim that it had received more than 14,000 reservations for its FF 91 vehicle may have been misleading, as only a few hundred of those reservations had been paid.

A restructuring of Faraday Future’s board, demotion of the founder, pay cuts for top executives and the suspension of another followed.

Faraday’s lingering regulatory issues are similar to EV companies that went public through SPAC mergers over the past two years. Several companies, such as Lordstown Motors, Canoo, Electric Last Mile Solutions and Lucid Group, who are eager to raise the money necessary to succeed, may have exaggerated their own capabilities to create a profitable business, and are like as a result, subject to a series of SEC and DOJ investigations.

Shares of Faraday Futures stock are down 1.4% at 5:43 PM ET in after-hours trading.

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