State Orders Horse Firms to Stop Stock Sale

The California Department of Corporations, citing securities violations, has ordered the San Diego-based horse breeding company, North American Thoroughbreds Inc., and New Concepts Stables Inc. to stop offering stock or limited partnerships.

In a related order, the department Tuesday ordered First National Capital Corp. of San Diego and its president, Charles Webster, to refrain from acting as a broker-dealer in California without proper licensing.

Raymond Burg, a senior counsel with the Department of Corporations, said the companies were also ordered to turn over their accounting books “to find the extent of the violations.” The order against North American and New Concepts, also of San Diego, was issued Friday and prohibits the firms from offering investment contracts.

“As far as we’re concerned, it’s a moot point,” said Stephen Hyman, president of North American Thoroughbreds Inc. “We have not marketed any securities in the recent past. Why there’s an order on us to cease and desist is beyond me. North American Thoroughbreds has no plans to go public. To tell you the truth, I have no idea what this is about . . . not the slightest idea.”

NAT was founded in 1981 as an expansion of New Concepts, which was organized to buy, race and sell thoroughbred horses through the creation of partnerships. NAT expanded New Concepts to include raising and breeding thoroughbreds.

But NAT fell into dire financial straits in December, and employees alleged that the company had not paid salaries for 10 weeks. It was also reported that the company had mistreated its horses at a ranch in Virginia, failed to pay creditors and withheld funds from investors.