Are you talking about this ho ho ho story? http://www.news.com.au/story/0,23599,22738300-2,00.html

My first reaction was that Santas had been told not to use ho ho ho because is sounds like the derogatory use of the word 'whore'.

At any rate, if it is about the kids being frightened, a lot of kids get scared just because Santa looks the way he does! Not because he says ho ho ho. Geesh.