EV startup Faraday Future gets SEC subpoena on inaccurate statements
Faraday 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.
Electric vehicle firm Faraday Future Intelligent Electric Inc (FFIE.O) said on Tuesday its review had identified certain inaccurate statements made by its employees to investors and announced changes in its leadership structure.
Faraday said it had appointed Susan Swenson, currently an independent member of its board, to the newly created position of executive chairperson of the company.
The company said its chief executive officer Carsten Breitfield and founder Jia Yueting would both be handed a 25% cut each in their annual base salary. Both Breitfield and Yueting would report to the newly appointed executive chairperson, according to Faraday.
Faraday in November had delayed the filing of its quarterly report and said it had formed a special committee to review allegations of inaccurate disclosures, including claims made by short-seller J Capital. The short-seller had called Faraday "a new EV scam in town".
On Tuesday, Faraday said statements made by some of its employees to certain investors describing founder Jia Yueting's role within the company were inaccurate, and his involvement in the company's management post its merger with blank-check firm Property Solutions Acquisition Corp "was more significant than what had been represented."
However, the company maintained allegations made in the short-seller report were not supported by the evidence reviewed.
Several EV companies, including Lordstown Motors (RIDE.O), Nikola (NKLA.O), both of which went public via acquisitions by special-purpose acquisition companies (SPAC), have found themselves under investigation for mistatements by former top executives and are under the scrutiny of short-sellers.
The chairman and CEO of Electric Last Mile Solutions Inc (ELMS.O), which also went public through a SPAC, resigned on Tuesday following an investigation into their share purchases. read more
Further investigation based on the special committee's findings would be under the executive chairperson's direction, Faraday said.
Faraday went public in July through a SPAC deal with Property Solutions Acquisition Corp.