SEC subpoenas EV startup Faraday Future over inaccurate statements

The U.S. Securities and Exchange Commission has subpoenaed some members of Faraday Future Intelligent Electric Inc’s management team as part of a probe into inaccurate statements made to its investors.

An internal review had in February identified certain inaccurate statements and the company cut the base salaries of its Chief Executive Carsten Breitfield and founder Jia Yueting, asking them to report to newly appointed Executive Chairperson Susan Swenson.

The review by a special committee formed in November, however, rejected claims made by a short-seller that called the startup “a new EV scam in town”, saying they were not supported by the evidence reviewed.

The startup said it would miss the deadline for filing its 2021 annual report due to delays caused by the internal investigation. It had previously delayed the filing of its quarterly report in November.

Several EV firms that went public via acquisition by special-purpose acquisition companies have faced regulatory scrutiny due to issues with accounting and claims they made.

Separately, Faraday Future said it expects operating loss to increase to about $186 million in the quarter-ended Sept. 30, from about $18 million a year earlier, mainly due to higher expense related to a production rampup at its Hanford, California facility.

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