In re Yeheey Itraffic System, Inc.

April 4, 2019 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT IN THE MATTER OF: YEHEEY ITRAFFIC SYSTEM, INC. SEC REGISTRATION NO. CS201731930 FOR : Revocation of Certificate of Incorporation for Violation of the Corporation C od e of the Philippines in Relation to Presidential Decree No. 9 0 2-A for Serious Misrepresentation as to What the CorporationCan Do to the Great Prejudice of or Damage to the General Public ORDER OF REVOCATION This refers to YEHEEY ITRAFFIC SYSTEM, INC. ("YEHEEY"), a corporation registered with the Commission on 22 September 2017 under Company Reg. No. CS201731930. Its principal office address is at Unit 8-B10/11 Victoria Towers, No. 79 Timog Ave., Quezon City. 1 Its primary purpose is: "To engage in website development, online advertising, online shop and e-commerce business, including but not limited to the establishment and maintenance of storefronts and sites for e-Marketplaces, e-Trading, and other electronic business applications and services; to acquire, develop and market platforms, systems, or applications for business-to-business integration and business-to-consumer solutions for e-trading communities; to develop, acquire, sell, or otherwise deal in end-to-end networking products and intelligent network services and applications that support e-commerce network solutions; to acquire, import, export, sell, market or otherwise deal in electronic products and equipment, computer systems, peripherals and accessories, and to engage in any other business or undertaking that is expedient and/or connected with or related to e-Commerce in all its aspects, Internet, Cyberspace, Computer Systems and Electronics." Through the Commission's i-Message, this department has received various queries/information regarding YEHEEY's activities. Some of which we hereby quote verbatim: 1. "Wala pong konkretong paliwanag kung paano kumikita ang kumpanya pero ang mga ito ay nagsosolicit na at nagpapayout sa mga miyembro kahit wala pa itong mga kaukulang legal na dokumento. Ang Yeheey ITraffic System, Inc. ay may ipinapakitang SEC REG CERTIFICATE subalit hindi ko naman ito mahanap sa online search ng mga rehistrado o nakareserbang business name sa eportal ng SEC website. Personal kong nakausap ang VP ng Yeheey na si JB Lee sa cellphone number na 09956201721 at kinumpirma nya na talagang wala pang business permit at license ang kumpanya dahil hindi daw kailangan dahil matatapos na ang taon. Next Year na daw sila magrerehistro kaya kinontra ko ng tanong na bakit hindi na lang next year sila magoperate pag kumpleto na ang kanilang requirements. Sa ngayon, patuloy pa rin silang nagsosolicit ng pera at aktibong nangeeganyong sumali sa kanilang modus." CAIHTE 2. "hi SEC, Additional question about Yeheey Itraffic system Inc. , Ito po bang company ito ay tama ang business plan nila? ito po yung business plan nila. KELAN BA NAG UMPISA SI YEHEEY? Ini Lauch si yeheey sa Pilipinas noong Sept. 28, 2017 Ito ay Combination NG 4 na Advertising Platform at ng Modernong Marketing Tools. *Affiliate Marketing *Niche Marketing *Content Marketing *Network Marketing ITO AY HINDI INVESTMENT COMPANY. ang tagline natin ay. . . . SUBSCRIBE, PROMOTE & GET PAID PAANO BA ANG PAG SALI KAY YEHEEY AT ANO ANG MAGIGING KAPALIT NG IBINAYAD MO? P1,000 Pesos or $20 Para sa Premium Subscribers. *FB AUTOMATION *VIDEO TUTORIAL *THRU ONLINE ADVERTISING *Discounted ka sa lahat NG ka tie up ni yeheey at pde Kang kumita sa AFFILIATE MARKETING PROGRAM. PAPANO NGA BA KUMITA KAY YEHEEY? 1. SIGN UP BONUS Once na nakapag Register ka sa Referral Link ng nag invite sa iyo magkakaroon ka agad ng P200 php 2. LOG IN LOG OUT BONUS Sa unang anim na araw na mag la log in log out ka sa account mo ay may makukuha kang total na P1,200 converted to yeheey points. Kailangan mo lang mag log in/out ng apat (4) na beses sa isang araw. 3. DONATE AND WIN PROMO!!! Dito ay may chance kung manalo ng Appliances, Gadgets, Tour Incentives sa weekly pa raffle draws ni yeheey even Sasakyan. Sa pamamagitan ng ating yeheey points at maari pa nating maibili sa mga bagong products na ilalabas ni yeheey WOW na WOW di ba? 4. SPONSORING BONUS Sa tuwing may mapapajoin ka Kay yeheey, ay babayaran ka ng $2.00 or P100.00 Hal. 5. FIRST CYCLE BONUS Sa tuwing makakabuo ka ng left and right mo sa first level sa binary tree mo kahit na spell over pa yan ay may makukuha kang $8.00 or P400 plus 100 sponsoring bunos. 6. INFINITY CYCLE BUNOS Sa tuwing makakabuo ka o NG grupo mo ng pares sa binary tree mo may makukuha kang $2.00 or P100.00 unlimited po yan walang katapusan. 7. GROUP SHARES BUNOS Sa Kita NG buong group nyo ay maaari kang magkaroon ng share o kita na paghahatihatian nyo mula sa pinakaupline hanggang sa pinakababa basta umabot ka sa 25k na buong kita sa total income mo. DETACa 8. GLOBAL PROFIT SHARING kapag kumita ka ng 50k sa loob NG isang buwan ay meron kang makukuhang 1 share sa kita ng company 100k 2 share 150k 3 share WOW para ka ng ka sosyo ng company. at ang GOOD NEWS nito guys ay Ilalabas na ni yeheey ang pinaka aabangan na UNLIMITED LOG IN LOG OUT BUNOS. na kahit nag lalog in log out ka lang sa account mo araw araw ay pwde ka palang kumita ng 2,500 a day or 10,000 per day kaya mas maraming tao sa ilalim mo mas maraming magla log in log out para sa yo. Grabe!!! Kaya Kung ako sa u guys sumali ka na at mag sign up sa link na nasa ibaba para maranasan mo narin kumita tulad ng ibang subscribers ni yeheey ok? sign up kana tapos I pm mo ako first minimum pay out, 2,500 php next minimum pay out is P1,000 only. Weekly pay out po tayo"; and 3. "Good Day Sec! Gusto ko lang po sana i tanong kung ang Yeheey I traffic System na sa kasalukuyan ay nag dagdag ng maraming paraan ng pagkakakitaan at kasabay noon ang pagdagdag din ng kanilang registration fee mula 1k php to 2k php ay Legal po ba na mag operate sila ng Business at magbenta, mag offer o mag promote ng mga sumusunod na klase ng pagkakakitaan sa publiko? 1. Ticketing 2. E load 3. Food cart franchising 4. Man Power Services 5. Forex Trading 6. Clicking (PTC) 7. Referrals/Binary (INVITING) (see attached file) Sample of promoter used by Yeheey Members Few months ago Yeheey Itraffic System offers only 2 ways to earn iyon lang po ay ang Pay-per-click where in you can earn 25 cents everytime you click with 1 minute time interval at ang Binary earnings o yung INVITING. Ang sumusunod po ang potential income mo sa pag iinvite: Sponsor Bonus 100 pesos (Everytime na may mag reregister sa referral link mo at magbabayad ng subscription fee na 1k o 2k automatic makaka gain ka ng 100 pesos) Pairing Bonus 400 php (Everytime na may makakahikayat ka ng 2 tao at makapagbayad ito ng registration fee automatic makakareceive ka ng 400 pesos) at ang Infinity Bonus 100 php Pwede nyo pong panoorin ang official video presentation nila sa link na ito --> https://youtu.be/BigyeOtS2L4 Thanks You Sec! Have a Good Day!" The Enforcement and Investor Protection Department (EIPD) requested the Markets and Securities Regulation Department (MSRD), Corporate Governance and Finance Department (CGFD), and Company Registration and Monitoring Department (CRMD) to determine if Yeheey was issued or has a pending application for a permit to offer securities for sale. In reply to our query, the MSRD certified that: aDSIHc " CERTIFICATION This is to certify that as per records on file with the Markets and Securities Regulation Department, YEHEEY ITRAFFIC SYSTEM, INC. has not registered any securities pursuant to Sections 8 and 12 of the Securities Regulation Code (SRC). Likewise, the Department has not issued a Permit to Sell securities in favor of YEHEEY ITRAFFIC SYSTEM, INC. Further, it has not filed nor has any pending application for registration/permit to sell securities. This negative Certification is limited merely to registration of securities that are under the jurisdiction of this Department and does not cover registration of other securities under the jurisdiction of the Corporate Governance and Finance Department of this Commission. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of this Commission to be affixed this 6th day of February 2018 at Roxas Boulevard, Pasay City, Philippines. VICENTE GRACIANO P. FELIZMENIO, JR. Director" while the CGFD certified that: " CERTIFICATION TO WHOM IT MAY CONCERN: This is to certify that based on records on file with this Commission YEHEEY ITRAFFIC SYSTEM, INC. is not a registered issuer of mutual funds, exchange traded funds, proprietary/non-proprietary shares or membership certificates, timeshares and registered but unlisted equity securities under Sections 18 and 12 of the Securities Regulation Code and therefore not licensed to offer or sell such securities to the public. This certification is issued upon the request of Director Jose P. Aquino of the Enforcement and Investor Protection Department for whatever purpose it may serve. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of this Commission to be affixed this February 5, 2018 at Pasay City. RACHEL ESTHER J. GUMTANG-REMALANTE Officer-in-Charge" On the other hand, the CRMD certified that: " CERTIFICATION TO WHOM IT MAY CONCERN: THIS IS TO CERTIFY that the records of Yeheey itraffic System, Inc. with SEC No. CS201731930 on file with this Commission show that: The corporation was registered on September 22, 2017 with a term of existence of fifty (50) years. To date, no Amended Articles of Incorporation dissolving the corporation has been filed. ETHIDa Further, the following are its compliance with the required reports: Reports Filed Not Filed General Information Sheet 2018 - Financial Statements - 2017 Furthermore, the records of the Commission do not show the above-named corporation was issued a secondary license as a broker and/or Dealer of Securities, Dealer in Government Securities, Investment Adviser of an Investment Company, Investment House and Transfer Agent. Also, it has not filed nor has any pending application for said secondary licenses with this Department. This certification is issued on the request of the Enforcement and Investor Protection Department for whatever purpose it may serve. IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of this Commission to be affixed to this certification at Ground Floor, East Wing, Secretariat Bldg., PICC Complex, Pasay City, Metro Manila, Philippines this 23rd day of July 2018. FERDINAND B. SALES Director By: DANIEL P. GABUYO Officer-in-Charge Corporate Filing and Records Division" After a conduct of investigation, the EIPD, on 1 August 2018, issued an Advisory against YEHEEY, stating, among others, that: "The Commission has received information that individuals or group of persons representing YEHEEY ITRAFFIC SYSTEM, INC. ("YEHEEY") are enticing the public to invest in the said entity online or through the internet. TIADCc Based on the information communicated to and gathered by the Commission, 2 a person enticed to be a member of YEHEEY , must be a Premium Subscriber by paying One Thousand Pesos (Php1,000.00). A Yeheey Member is entitled to the following: 1. Video Tutorials about the business; 2. Online Advertising; 3. Tie-up company discounts; 4. Affiliate marketing programs; 5. Donate and win promo; 6. Yeheey unli survey; and 7. Yeheey clicking ads program. Below are the ways to earn without need for any invite/s: 1. Sign-up bonus a member earns 200 yeheey points whenever he signs-up to his sponsor's link; 2. Log-in/Log-out Bonus a member earns a total of 1,200 yeheey points 3 whenever such member logs-in and out four (4) times daily for six (6) days; 3. Donate and Win Promo the yeheey points can be donated and can win either a gadget, appliances, travel and lifestyle incentives, and car incentives in a raffle. The winner wins a prize set by the company at a certain time and whoever will be the last clicker at the set time is declared the winner; 4. Yeheey Unli Survey a member earns Php20,000.00 by just filling up a survey per month; 5. Unli-clicking Program a member earns Php4.00 for every four (4) clicks per day. Below are the ways to earn with "invitation": 1. Sponsoring Bonus a member who recruits a new member to sign-up to his sponsor's referral link earns $2 for every premium subscriber; 2. Infinity Cycle Bonus a member who is able to build his group thru pairing (called "cycle") earns $2 regardless whether he is the direct recruiter of his downline or not; 3. Global Profit Shares every Php50,000.00 earnings of a member is equivalent to one (1) share and member is entitled to share of the company's whole sales; 4. Yeheey Group Clicking Program for every click of the sponsor's group members, the sponsor earns .50 yeheey coins; 5. First (1st) Cycle Bonus a member earns $8 for every 1st cycle to each level of his group; 6. Group Shares Bonus a member earns from the total earnings of the team he belongs to. The Commission on 22 May 2018 issued an Advisory against Paid-to-Click (PTC) program as scams. 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 Regulation Code (SRC). AIDSTE Any offering to the public which involves investment of money in a common enterprise with the expectation of profits primarily from the efforts of others, constitutes an investment contract which is a form of securities that needs to be registered with the Commission. Thus, the public is hereby WARNED of the following indication of a potential INVESTMENT SCAM : 1. Unrealistic high returns on investment; 2. Underlying activity is not explained well or is too complicated to understand; and 3. Promoters discourage investor from cashing out his investment and encourages the rolling over of the investment and/or infusing more money. Consequently, those who act as salesmen, brokers, dealers or agents of a company in selling or convincing people to invest in the investment scheme described as a potential INVESTMENT SCAM including solicitations or recruitment through the internet may likewise be prosecuted and held criminally liable under Section 28 of the Securities Regulation Code and penalized with a maximum fine of Five Million pesos (P5,000,000.00) or penalty of Twenty One (21) years imprisonment or both pursuant to Section 73 of the SRC. Accordingly, those who invite or recruit other people to join or invest in this kind of venture or offer contracts or securities to the public may be held liable or accordingly sanctioned or penalized in accordance with the Supreme Court decision in the case of SEC vs. Oudine Santos (G.R. No. 195542, March 19, 2014)." x x x To refute the issued Advisory, on 16 August 2018, Mr. Erwin Laraya, Mr. Joed Baron, Ms. Mary Chiles Mendoza, Mr. Richard Ronimo Jr., Mr. Constancio Pasis, Ms. Helen Alfeche, Mr. James Sabenecio, and Mr. Michael Casayuran, the authorized representatives of Yeheey, appeared before this department where they presented the business operations and schemes of Yeheey. On the same occasion, Yeheey's representatives confirmed the business activities of Yeheey as described in the SEC Advisory and further averred that ninety five percent (95%) of the membership fees collected from the incoming members are, in turn, given to the old Yeheey members in order to effect the abovementioned ways to earn . SDAaTC On 8 January 2019, a Show Cause Order was issued against YEHEEY addressed to the company's registered principal office address, all of its incorporators, and officers directing the company to show cause why its Certificate of Incorporation should not be revoked for serious misrepresentation as to what the corporation can do or is doing to the great prejudice of or damage to the general public . However, the Building Administrator of the building 4 which housed the registered principal office address of the company certified that: "x x x there are no records of YEHEEY ITRAFFIC SYSTEM, INC. in our files either as tenants or unit owner " while the Tanggapan ng Punong Barangay of Barangay Mahabang Parang, Angono, Rizal certified that Mr. Erwin B. Laraya , 5 Yeheey's President, is a non-resident of their barangay . Likewise, the Office of the Barangay Chairman of Barangay Manggahan, Rodriguez, Rizal certified that Mr. Richard R. Ronimo Jr. , a former resident of #118 N. Angeles St., Manggahan, Rodriguez, Rizal, is no longer a resident therein . From among the addressees of the Show-Cause Order, Ms. Mary Chiles T. Mendoza (Treasurer) personally received the Show Cause Order on 15 January 2019, while the letter for Ms. Teresita L. Soliman (member of the Board of Directors) was received through a certain Charlie SG. Pelagio likewise on 15 January 2019. Despite such receipt, the company failed to submit its position paper or any response, thus, constituting a waiver of its right to be heard as to the allegations stated in the aforementioned Show Cause Order. Thus, we now resolve the instant proceedings on the basis of available evidence. Section 3.1 of the Securities Regulation Code (SRC) defines securities as: "3.1 "Securities" are shares, participation or interest in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic in character. It includes: (a) Shares of stocks, bonds, debentures, notes, evidences of indebtedness, asset-backed securities; (b) Investment contracts , certificates of interest or participation in a profit-sharing agreement, certificates of deposit for a future subscription; (c) Fractional undivided interests in oil, gas or other mineral rights; (d) Derivatives like options and warrants; (e) Certificates of assignments, certificates of participation, trust certificates, voting trust certificates or similar instruments; (f) Proprietary or non-proprietary membership certificates in corporations; and (g) Other instruments as may in the future be determined by the Commission." Investment contract on the other hand, is defined under SRC Rule 26.3.5 of the 2015 Implementing Rules and Regulations of the Securities Regulation Code (2015 SRC IRR) as follows: acEHCD An investment contract means a contract, transaction or scheme (collectively "contract") whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others. A common enterprise is deemed created when two (2) or more investors "pool" their resources, creating a common enterprise, even if the promoter receives nothing more than a broker's commission." Further, the elements of an investment contract were enumerated in the case of Power Homes Unlimited Corporation vs. SEC which traces its roots from the case of SEC vs. Howey Co. and was later modified in the case of SEC vs. Glenn W. Turner Enterprises, Inc. as follows: A contract, transaction or scheme An investment of money A common enterprise Expectation of profits Profits arises primarily from the entrepreneurial and managerial efforts of others Section 8, in relation to Section 12 of the SRC provide that: "SEC. 8. Requirement of Registration of Securities . 8.1. Securities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the Commission. Prior to such sale, information on the securities, in such form and with such substance as the Commission may prescribe, shall be made available to each prospective purchaser. "SEC. 12. Procedure for Registration of Securities. 12.1. All securities required to be registered under Subsection 8.1 shall be registered through the filing by the issuer in the main office of the Commission, of a sworn registration statement with respect to such securities, in such form and containing such information and documents as the Commission shall prescribe. The registration statement shall include any prospectus required or permitted to be delivered under Subsections 8.2, 8.3 and 8.4." Securities such as investment contracts as defined by the SRC and in relation to SRC Rule 26.3.5 of the 2015 SRC IRR must be registered before the same can be sold or offered for distribution to the public. As a form of security, investment contracts must be registered under Section 8 of the SRC before they can be sold or offered to the public. Rule 3.1.17 of the 2015 SRC IRR defined Public Offering as "any offering of securities to the public or to anyone, whether solicited or unsolicited. Any solicitation or presentation of securities for sale through any of the following modes shall be presumed to be a public offering: 3.1.17.1 Publication in any newspaper, magazine or printed reading material which is distributed within the Philippines or any part thereof; 3.1.17.2 Presentation in any public or commercial place; 3.1.17.3 Advertisement or announcement on radio, television, telephone, electronic communications, information communication technology or any other forms of communication ; or 3.1.17.4 Distribution and/or making available flyers, brochures or any offering material in a public or commercial place, or to prospective purchasers through the postal system, information communication technology and other means of information distribution ." (Emphasis supplied) On the other hand, a "Broker" is defined under Section 3.3. of the SRC as a person engaged in the business of buying and selling securities for the account of others, while 3.4 of SRC defined "Dealer" as any person who buys and sells securities for his/her own account in the ordinary course of business. "Salesman" is defined under 3.13 of the SRC as a natural person, employed as such or as an agent, by a dealer, issuer or broker to buy and sell securities. Consequently, Section 28 of the SRC provides that: SDHTEC "SEC. 28. Registration of Brokers, Dealers, Salesmen and Associated Persons . 28.1. No person shall engage in the business of buying or selling securities in the Philippines as a broker or dealer, or act as a salesman, or an associated person of any broker or dealer unless registered as such with the Commission." Thus, any person, without proper license from the Commission who acts as brokers, dealers or agents of a company selling or convincing people to invest in the investment scheme including solicitations or recruitment through the internet may likewise be prosecuted and held criminally liable under Section 28 of the SRC and penalized with a maximum fine of Five Million pesos (P5,000,000.00) or penalty of Twenty One (21) years imprisonment or both pursuant to Section 73 of the SRC. In this particular case, the Department carefully examined the characteristics of the investments offered by Yeheey to determine if they satisfy the elements of an investment contract. In our evaluation, indeed, the elements of investment contracts are manifested in the investments being offered by Yeheey as follows: A contract, transaction or scheme A prospective member must enter into a subscription contract with Yeheey before he/she can be admitted to the company; Investment of money The subscription contract for the admission to the company can only be accomplished upon investment of Php1,000.00 and for the members to be entitled to the ways of earnings; A common enterprise The Php1,000.00 invested by the public goes to Yeheey; Expectation of profits Yeheey members who invested Php1,000.00 are entitled to the different ways of earning profits previously described above; and Profits arises primarily from the entrepreneurial and managerial efforts of others Yeheey distributes profits to its members without any effort on the part of the investor (Infinity Cycle Bonus). It is important to emphasize that Yeheey, as a juridical person, is only allowed to exercise powers inherent to its corporate existence as provided in the Corporation Code of the Philippines and those conferred in its Articles of Incorporation (AOI). In other words, what a corporation can do is necessarily circumscribed by its primary purpose clause in its AOI. In Yeheey's AOI as approved by the Commission, it is clearly provided that the business of the subject company is primarily, "to engage in website development, online advertising, online shop and e-commerce business, including but not limited to the establishment and maintenance of storefronts and sites for e-Marketplaces, e-Trading, and other electronic business applications and services; to acquire, develop and market platforms, systems, or applications for business-to-business integration and business-to-consumer solutions for e-trading communities; to develop, acquire, sell, or otherwise deal in end-to-end networking products and intelligent network services and applications that support e-commerce network solutions; to acquire, import, export, sell, market or otherwise deal in electronic products and equipment, computer systems, peripherals and accessories, and to engage in any other business or undertaking that is expedient and/or connected with or related to e-Commerce in all its aspects, Internet, Cyberspace, Computer Systems and Electronics." Moreover, nothing is provided in its secondary purpose allowing the subject company to engage in the selling or offering for sale or distribution of securities in the Philippines. AScHCD In fact, the Certificate of Incorporation of YEHEEY expressly states: x x x "This Certificate grants juridical personality to the corporation but does not authorize it to undertake business activities requiring a Secondary License from this Commission such as, but not limited to acting as: broker or dealer in securities, government securities eligible dealers (GSED), investment adviser of an investment company, close-end or open-end investment company, investment house, transfer agent, commodity/financial futures exchange/broker/merchant, financing company, pre-need plan issuer, general agent in pre-need plans and time shares/club shares/membership certificates issuers or selling agents thereof. Neither does this Certificate constitute a permit to undertake activities for which other government agencies require a license or permit ." x x x (emphasis ours) The purpose stated in the Articles of Incorporation need not set out with particularity the multitude of activities in which the corporation may engage. The effect of broad purposes or objects is to confer wide discretionary authority upon the directors and management of the corporation as to the kinds of business in which it may engage. However, dealings which are entirely irrelevant to the purposes are unauthorized and called ultra vires . The purpose clause of the articles of incorporation indicates the extent as well as the limitations of the powers which a corporation may exercise. It is worth emphasizing that in the conference on 16 August 2018, YEHEEY's representatives categorically confirmed that ninety five percent (95%) of the membership fees collected from the incoming members are, in turn, given to the old Yeheey members in order to effect the abovementioned ways to earn . Thus, YEHEEY is engaged in a Ponzi scheme 6 which is prohibited under Section 26 of the Securities Regulation Code, specifically provides for: HESIcT "SEC. 26. Fraudulent Transactions . It shall be unlawful for any person, directly or indirectly, in connection with the purchase or sale any securities to: 26.1. Employ any device, scheme, or artifice to defraud; 26.2. Obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statement made, in the light of the circumstances under which they were made, not misleading; or 26.3. Engage in any act, transaction, practice or course of business which operates or would operate as a fraud or deceit upon any person." Finally, Section 6 of Presidential Decree 902-A declared the Commission has the power to suspend, or revoke, after proper notice and hearing, the franchise or certificate of registration or corporations, partnerships and associations, on the ground of serious misrepresentation as to what the corporation can do or is doing to the great prejudice of or damage to the general public. Under the 2016 Rules of Procedure of the Securities and Exchange Commission, the EIPD shall exercise authority over persons and entities, whether under the primary authority of other Operating Departments, involved in the following: xxx xxx xxx "1. Investigations and administrative actions involving the following: xxx xxx xxx c) Selling, offering or transacting unregistered securities by entities without secondary license; d) ultra vires acts committed in violation of the Corporation Code; 2. Petitions for revocation 7 of corporate registration in all cases, except those which fall under the original authority of CMD; 3. Administrative actions for fraudulent transactions involving securities; 4. Administrative actions for all other violations under PD 902-A, except those cases which fall under the original authority of other Operating Departments; 5. All other matters involving investor protection filed by the public, referred by self-regulatory organizations, or referred by other Operating Departments after initial evaluation or findings that there is a possible violation of laws, rules or regulations that the Commission implements but do not fall under their respective original authority." Further, SEC Admin. Case No. 11-10-124 entitled In re: PHILBIO Renewable Energy Resources Corp. , promulgated on 27 April 2016 provides what constitute serious misrepresentation, to wit: "From the foregoing, it is indubitable that PHILBIO misrepresented itself to the public that it can solicit investments despite the fact that it is not one of the purposes of the corporation . Worse, it does not have a license to offer/sell securities . PHILBIO operates an investment-taking scheme which is therefore considered an ultra vires act . These constitute serious misrepresentation as to what the corporation can do or doing to the great prejudice to the general public." 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 . Accordingly, let this Order be attached by the Corporate Filing and Records Division of the Company Registration and Monitoring Department (CRMD) to the records of the corporation on file with the Commission. Further, the Information and Communications Technology Department (ICTD) of this Commission is likewise requested to enter the "revoked" status of subject corporation in the online database of the Commission. caITAC SO ORDERED. Pasay City, April 4, 2019. (SGD.) JOSE P. AQUINO Director Footnotes 1. Per amendment approved on 12 February 2018. 2. Including video presentation on youtube of Yeheey's President, Mr. Erwin Borres Laraya, and posts on the Facebook account of Yeheey and their members. 3. 200 Yeheey Points per day. 4. Victoria Towers Condominium Association, Inc. 5. Declared that his residential address are: Blk. 5 BFHAI, Mahabang Parang, Angono, Rizal and 1-R Lot Blk. 1 St. Primrose Subd., Mahabang Parang, Angono, Rizal. 6. A Ponzi scheme is an investment program that offers impossibly high returns and pays these returns to early investors out of the capital contributed by later investors. Named after Charles Ponzi who promoted the scheme in the 1920s, the original scheme involved the issuance of bonds which offered 50% interest in 45 days or a 100% profit if held for 90 days. Basically, Ponzi used the money he received from later investors to pay extravagant rates of return to early investors, thereby inducing more investors to place their money with him in the false hope of realizing this same extravagant rate of return themselves. (People of the Philippines v. Priscilla Balasa, et al., G.R. 106357, dated September 3, 1998) 7. Revocation refers to involuntary dissolution of corporate registration pursuant to Section 121 of the Corporation Code.