Asian Tech Press (June 23) -- California-based EV startup FF's executive chairperson Susan Swenson has been sued more than 40 times and murdered several public companies she had worked for, a source who did not want to be named revealed.
Faraday Future Intelligent Electric Inc. (NASDAQ:FFIE), also known as FF, an electric car company founder by Chinese entrepreneur Yueting Jia, has recently hit the headlines as its global CEO Carsten Breitfeld said in an interview that the company would deliver in the third quarter of this year its first product, the FF 91.
Breitfeld stressed that the company can achieve its goal of launching its FF91 luxury EV without additional funding, and expect to mass produce 6,000 to 8,000 units in 2023. At the same time the company is working hard to secure financing for its post-mass production business needs.
It seems the ill-fated company is advancing its business in accordance with its stated corporate plan. However, a source told ATP that he recently received an email signed by "FF Whistleblower" about FF's current executive chairperson, Ms. Susan G. Swenson.
Sent to dozens of FF-related investors and some management members, the email shows that the whistleblower has compiled detailed information through public information accusing Susan Swenson, FF's current executive chairperson, of improperly profiting from the company's internal investigations.
The whistleblower said in the e-mail that Susan Swenson had been publicly "impeached" by California's former treasurer for expulsion from Wells Fargo's board of directors, had been sued repeatedly for ethics violations or malfeasance, and had served in several companies whose market value had fallen off a cliff.
Susan Swenson has also been accused of controlling Faraday Future's board of directors through the formation of a little clique, alleged improper disclosures, and various derelictions of duty and wrongdoings that caused billions of dollars of losses to FF shareholders and other serious problems. The whistle blower was straightforward in his email requesting and calling on FF's majority shareholders and board of directors to investigate and deal with Ms. Swenson.
From the contents of the revelations, attached SEC filings, and multiple links related to legal proceedings, evidence suggests that FF's current executive chairperson Ms. Swenson is questionable in terms of her professional ethics, work ability, and motivation for leading FF's earlier internal investigation into allegations of inaccurate disclosures as chair of a special committee of independent directors.
Ms. Swenson became a director of FF, the chairperson of a committee for internal investigation, and then became the chief executive of FF, a process that can be described as lifting with unchecked misconduct, making it an incredible drama. It seems that the EV startup did not do a good job of background check when selecting the independent directors of the board, and even ended up creating its own misery.
FF's Executive Chairperson Swenson May Improperly Profit from Internal Investigation
FF CEO Breitfeld has publicly stated that the delivery of FF 91 will not require additional funding. Superficially, it appears to be good news, but the implication is that if FF wants to continue to expand its business, develop its second product FF 81, and achieve its more important strategic goals such as launching its operations in China, the company needs to complete secondary fundraising as soon as possible.
Perhaps the electric car startup's financial situation is not optimistic, which is why Breitfeld frequently appeared at investor meetings such as Deutsche Bank's Global Auto Industry Conference in New York.
The high salary of FF's chief executive Ms. Swenson, mentioned in the email, is particularly eye-catching when the whole company is "scrimping and saving".
In October last year, a small, little-known company released a short seller report against Faraday Future, leading to the formation of a three-member special committee by FF's board of directors, with Swenson as chair and Scott Vogel, elder brother of FF's SPAC listing partner and former PSAC CEO Jordan Vogel, as a key member, and related investigations.
Surprisingly, the results of the internal investigation and rectification efforts denied almost all the allegations in the short-seller report, but showed that the special committee took severe disciplinary actions against FF founder Yueting Jia and several key Chinese executives, including salary reduction, demotion, and even dismissal, while took a symbolic pay cut for Breitfeld, who was supposed to be the first person responsible for FF's operations.
More in contrast, Swenson and the Vogel brothers became the biggest beneficiaries from the internal investigation. According to the source's email and FF's previous 8-K SEC filing, Swenson not only became FF's executive chairperson, but also received an eye-popping $4.2 million in salary plus stock, especially showing the arrangement for exercising stock options that seriously violated FF's relevant regulations.
The source said that not only is Swenson's one-year exercise window much shorter than the four to seven years it usually takes for other FF executives to exercise their stock options, but she has been granted eight times as many shares per month as FF's current CEO Breitfeld.
Jordan Vogel became the Lead Independent Director on the FF board, a position specifically created for him, and Scott Vogel took on the role of Chairman of the Audit Committee and the Nominating and Corporate Governance Committee of the Board.
In short, Ms. Swenson and the Vogel brothers may have achieved control of FF's board through earlier internal investigations.
An analyst familiar with the U.S. stock market said such behavior is extremely rare in the U.S. by being the "referee" to make itself the "most valuable athlete".
FF Facing Huge Challenges Under the Leadership of Swenson Who Murdered Several Public Companies
Generally speaking, it seems to be an available option to hire executives through high salaries to lead companies through difficult times. For example, Ford's former CEO Alan Mulally led the U.S. automaker to avoid bankruptcy and restructuring, creating a legend in the auto industry. But Swenson's resume and abilities suggest the opposite, according to the whistleblower's email.
The whistleblower charged that Swenson's primary work experience was in the telecommunications industry, without any experience in automobiles, electric vehicles, the Internet, artificial intelligence, supply chains or the manufacture of complex innovative products, and seemingly no relevant experience in cross-industry and cross-cultural management, thus making her the executive chairperson, and de facto CEO of FF, is unconvincing.
As a director of several public companies, Swenson's past "report cards" are also worrying, and the source enumerated this in detail below by checking public information:
- From December 2015 to June 2017, Ms. Swenson served as chairperson and CEO of Inseego Corp (NASDAQ:INSG, formerly Novatel Wireless Inc.), whose stock remained steadily low between $1 and $2, a level that was near its lowest at any given time.
- Swenson began serving Vislink Technologies Inc (NASDAQ:VISL) in July 2018. The U.S. tech company's shares have fallen from a peak of $40.8 in July 2018 to $0.52 on June 13, 2022. After a 98.4% drop in share price, the company became nearly worthless.
- Since March 2019, Swenson has joined Sonim Technologies Inc (NASDAQ:SONM), whose shares have plummeted 99.7% from an all-time high of $175.6 to $0.55 on Wednesday, making it virtually worthless.
According to public information, since mid-October last year, Swenson has been the chairperson of the special committee of FF's board of directors, leading the FF board and indirectly controlling FF's corporate operations. And since February this year, Swenson, who has been promoted to FF's executive chairperson, has become the person directly responsible for controlling FF's operations.
Analysts pointed out that during the ten months Swenson has been indirectly and directly at the helm of FF's board and operations, there have been serious consequences: FF has gone from being a star company with advanced products and technologies, disruptive innovations, home-field advantage in China and the U.S., and the hopes of many shareholders and employees, having to face huge operational challenges.
During the time that Swenson has been the de facto leader of FF, the electric car startup has suffered a lot, the analysts said, with shares dropping more than 70%, FF 91 delivery not progressing as expected, slow pace of landing in China, pending secondary fundraising, low employee morale and even the danger of the company running out of money, according to earnings data.
Over 40 Lawsuits, Swenson Was "Impeached" by Former California Treasurer
Of even greater concern is that the whistle blower's letter points out not only Swenson's questionable personal abilities, but also her significant ethical issues and risk of legal action. The source said Swenson had been accused and voted off the board of directors by not a few proprietors after performing her duties on multiple corporate boards, with public information showing she had been sued upwards of 40 times.
According to the whistleblower's email, the New Jersey-based wireless company Vislink, where Swenson has served since 2018, has accused her of violating her fiduciary duties as a member of the audit committee, not providing effective oversight of the company's operations.
In addition, Swenson was sued and removed from Wells Fargo's board of directors in 2017 for "breached of fiduciary duty, aiding and abetting breaches of fiduciary duty, unjust enrichment," and "abuse of control, gross mismanagement," and "waste of corporate assets," among other charges.
California's then Treasurer John Chiang even issued a press release calling on all Wells Fargo shareholders to vote to remove Swenson from the board because she "stood idly by during the entire 15 years in which Wells Fargo bred a culture allowing greed to consume integrity."
In fact, California-based Faraday Future, one of companies going public via SPAC, is struggling to make a second start, fulfilling its commitment to deliver production vehicles in the third quarter, while also facing deeper issues with its operations.
What exactly is the future of the company? Can it continue to create value for shareholders? It seems that the only path is to really set things right in the current chaotic situation.
The many issues mentioned in the whistle blower's email have proven that the early correction of mistakes and personnel adjustments by FF's board of directors and major shareholders, may be necessary to protect the interests of shareholders.
