Faraday Future Acknowledges Overinflated Reservation Numbers

This time around, Faraday Future is in trouble after admitting that the number of orders they had received was inflated. The company filed a Form 8-K with the Securities and Exchange Commission. Faraday Future revealed to the Securities and Exchange Commission that declarations that they had "received more than 14,000 reservations for the FF 91 vehicle were potentially misleading because only several hundred of those reservations were paid, while the others, totaling 14,000, were unpaid indications of interest."

Indeed, the figures imply that the business overstated the number of reservations by almost 1400%. Faraday Future didn't just lie about reservations; according to the complaint, it also lied about Yueting Jia's participation in the troubled firm.

As noted in the filing, "Statements made by certain company employees to certain investors describing Mr. Jia’s role within the company were inaccurate, and Mr. Jia’s involvement in the management of the company was more significant than what had been represented to certain investors," as noted in the filing.

Faraday Future will take steps to improve oversight and corporate management, improve its internal controls over financial reporting, try to hire a Chief Compliance Officer, and establish a comprehensive training course for all officers and directors on domestic company policies.

Jarret Johnson, Faraday Future's General Counsel, will be separating from the firm. Also, other workers may potentially face additional disciplinary measures from the firm. Faraday Future's Vice President of Global Capital Markets, Jiawei Wang, has been suspended without pay, while CEO Carsten Breitfield and Jia have had their salaries reduced by 25%. Meanwhile, Susan Swenson was appointed to the position of Executive Chairperson.