Yeheey iTraffic System Inc. is a Ponzi Scheme and has no license to sell investments to the public.
That was the statement of the Securities and Exchange Commission (SEC) of the Philippines when it revoked the Certificate of Incorporation and registration of the said entity.
The Enforcement and Investor Protection Department (EIPD) of the SEC found that Yeheey was selling investments to the public. According to the EIPD, the subject company is not authorized to offer such investments because its Certificate of Incorporation did not expressly say so.
After investigation, on 1 August 2018, the department issued a warning against investing in Yeheey because the company has no authority to collect the investment from the public.
A portion of last year’s advisory says;
“The public is hereby informed that while YEHEEY is registered with the Commission as a corporation, however, it is not authorized to solicit investments from the public as it has not secured the necessary license or permit from the Commission as required under Sections 8 and 12 of the Securities Regulations Code (SRC)?
To clear the matter with the SEC, on 16 August 2018, Erwin Laraya, Joed Baron, Chiles Mendoza, Richard Ronimo Jr., Constancio Pasis, Ms. Helen Alfeche, James Sabenecio, and Michael Casayuran, the authorized representatives of the company, met the EIPD. They presented Yeheey’s business operations and schemes.
During the conference, Yeheey’s representatives confirmed that ninety-five percent (95%) of the registration fee from new members are given to the old members to fulfill its promises to make money in various ways. Hence, Yeheey is engaged in a Ponzi Scheme which is illegal under Section 26 of the SRC.
The revocation order dated 4 April 2019 concluded;
“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.
WHEREFORE, for violation of Section 45 of the Corporation Code of the Philippines in relation to P.D 902-a, the Certificate of Incorporation and the registration of YEHEEY ITRAFFIC SYSTEM INC. as a corporation is hereby REVOKED.”