Satish Sanan, founder of Alliance for Industry Reform.

Satish Sanan, founder of Alliance for Industry Reform.

Bill Denver/Equi-Photos

Code of Ethics Follow-Through Called Critical

The Thoroughbred industry's first code of ethics for public auctions has been getting generally positive reviews since its release Dec. 16. However, many people would like to see further efforts to encourage the disclosure of information and to discourage buyers and sellers from becoming involved in fraudulent ventures.

"I think, by and large, this is a positive step," said Ric Waldman, a consultant to Overbrook Farm in Kentucky. "But what will really be important is how TOBA (Thoroughbred Owners and Breeders Association) puts it into practice--how well they market it and how effective they are in seeing that buyers have ready access to this code and understand it.

"TOBA's follow-through will be as critical as the steps that have already been taken. Posting signs on the sales grounds won't be enough. There are signs posted on the sales grounds that already exist, and no one can tell you what they say or what they mean. They don't have any impact."

Said consignor Craig Bandoroff of Kentucky-based Denali Stud: "I think it (the code of ethics) is basically good. There's a lot of positive stuff in it. But I'm also disappointed. They want the sellers to reveal everything that has been done to a horse, but the buyers get to conduct their business under a veil of secrecy.

"It would be nice if a veterinarian who comes into your shedrow would tell you the truth about who they are scoping a horse for. They either lie to you or tell you the consignor doesn't want it to be disclosed. I personally don't think that's right. I think the next step should be to address this issue."

Amanda Simmons, spokesperson for the Alliance for Industry Reform, said her organization has mixed feelings about the code of ethics. TOBA organized the Sales Industry Task Force last summer to create the code following complaints about the auction business from AIR and its founder, Satish Sanan of Padua Stables. Sanan is one of the task force's 22 members and will serve on a three-member monitoring committee that will evaluate the effectiveness of the code.

"AIR will remain in existence throughout 2005 and will continue to provide a forum for people to issue their concerns regarding TOBA's continued progress with sales ethics," Simmons wrote in an e-mail to The Blood-Horse. "However, we are very encouraged by the progress the task force has made and hope to eventually cease to exist by the end of the year."

Simmons said "the lack of mandatory ownership disclosure remains a serious concern of ours, and that is one of the primary reasons why AIR will continue to be viable, though in the background, for the next year. I would like to encourage all owners to use their purchasing power as a means of requiring ownership disclosures, or any other kind of disclosures. If you are not given the information you want, then walk away from the horse."

Even with a code of ethics, buyer Samantha Siegel of California believes shoppers ultimately should bear the responsibility for protecting themselves from fraud.

"The bottom line, if you're a buyer, is that you need to do your homework," Siegel said. "It would be nice if you could assume that everything that everybody tells you is true, but you can't. When there is a lot of money involved, you can run into a serious problem if you don't do your homework. And if buyers don't do their homework, they can't blame anybody but themselves if something goes wrong. You've got to be able to take care of yourself."

At its December board of directors meeting, the New York Thoroughbred Breeders Sales Co. unanimously spoke out in favor of the code of ethics. The company was formed in 2004.

In a statement, spokesman Chester Broman, who buys horses at auctions, said: "We are striving to see a commodity which by its nature is difficult to guarantee. The board of NYBSC looks forward to implementing the recommendations and standards deemed appropriate by TOBA. It is our company's goal, in its very small part, to provide an easy, safe entry point for new owners while providing a level playing field for our consignors.