By James A. Loyola
The Securities and Exchange Commission (SEC) has revoked the certificate of incorporation of Yeheey iTraffic System, Inc. for illegal public offering of securities and operating a Ponzi scheme.
In the order issued by the SEC’s Enforcement and Investor Protection Department (EIPD), YEHEEY was shut down due to serious misrepresentation of what the corporation can do or is doing to the great prejudice of or damage to the general public.
Based on information gathered and confirmed by the EIPD, the corporation enticed members of the public to register as “premium subscribers” by paying P1,000 and to recruit more members in exchange for high returns.
YEHEEY then offered various ways for members to earn points and money. For instance, a member could earn 1,200 points by simply logging in and out four times daily for six days and $2 for every new member recruited.
The EIPD noted that such a scheme constitutes a public offering of securities, in the form of investment contracts, and requires a secondary license from the SEC, pursuant to Sections 8 and 12 of the Securities Regulation Code.
Separate certifications from the Commission’s Markets and Securities Regulation Department, Corporate Governance and Finance Department, and Company Registration Monitoring Department showed YEHEEY neither obtained nor sought a permit to offer securities.
YEHEEY is also not authorized to sell or offer for sale or distribution of securities in the Philippines under its articles of incorporation.
“Considering that nowhere it is stated in the primary purpose that YEHEEY is authorized to engage in the selling or offering for sale of securities to the public, the activity of YEHEEY of selling or offering for sale of investments is considered an ultra vires act and therefore constitute serious misrepresentation,” the EIPD noted.