THE SECURITIES and Exchange Commission (SEC) has invalidated the incorporation papers of Yeheey iTraffic System, Inc. for the damage it might cause the public due to its paid-to-click scam.
In a statement issued Wednesday, the SEC said its Enforcement and Investor Protection Department (EIPD) issued the order to revoke Yeheey’s certificate of incorporation on April 4, citing the “serious misrepresentation” it can do or is doing for asking the general public to register in its platform in exchange for high returns.
The commission found that Yeheey invites members to register as premium subscribers for P1,000. After then, members can earn 1,200 points by logging in and out of its online platform four times a day for six days. They will also be given $2 for every recruit they bring in to the system.
Such acts constitute a public offering of securities, which requires a secondary license from the SEC.
“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 said in a statement.
The commission added that certifications from its various departments such as the Markets and Securities Regulation Department, Corporate Governance and Finance Department, and Company Registration Monitoring Department showed that Yeheey made no effort to apply for a permit to offer securities.
The EIPD further found Yeheey to be engaged in a Ponzi scheme, where investors are presented impossibly high returns. These returns are taken out of the capital of later investors to early investors, since they have no material products that generate profit. A Ponzi scheme is prohibited under Section 26 of the Securities Regulation Code.
Prior to the revocation of Yeheey’s incorporation papers, the SEC had already issued an advisory against Yeheey in August 2018, warning the public to be cautious when dealing with the individuals or groups representing the firm. — Arra B. Francia
