Several Faraday Future Executives Summoned by SEC

The US Securities and Exchange Commission (SEC) disclosed on Thursday that several senior executives of Faraday Future (FF), an electric vehicle company, were summoned by the SEC for allegedly publishing inaccurate information to investors. Due to the delay caused by an internal investigation, the EV maker is not expected to submit its annual report for 2021 within the deadline.

Faraday Future said on Thursday that certain members of the management team and employees of the company received a notice of preservation and subpoena from the staff of the SEC stating that the SEC had commenced a formal investigation relating to the matters that were the subject of the special committee investigation.

The SEC’s investigation is related to the internal investigation of FF. In February this year, FF found that the company had issued some inaccurate statements to investors and exaggerated the number of bookings for its upcoming vehicle, the FF 91. A subsequent survey found that only a few hundred of the 14,000 FF 91 orders had actually been paid. To this end, FF cut the basic salary of Carsten Breitfield, CEO of the company, and Jia Yueting, co-founder of the company, by 25%.

FF also said the company would miss the deadline to submit its 2021 annual report due to delays caused by internal investigations. The company expects to submit the report before May 6, 2022.

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Moreover, FF estimated that in the fiscal quarter ending September 30, 2021, the company’s operating loss will increase to about $186 million from about $18 million in the same period of the previous year, mainly due to the increase in production of the company’s factory in Hanford, California, additional litigation expenses and the abandonment of some company assets.