I am working with a pony with similar problems, he has discovered some tricks, like bucking and and refusing to go forward, that have worked for him in the past and he has gotten his own way. He too is 40 in, but stockily built and I am small enough that I can ride him. He is not able to buck me off and I can keep pushing him forward until he gives up and does what I am asking. Young kids, or inexperienced riders often cannot do this and allow the pony to intimidate them, which is exactly what the pony is trying to do. It is very important that your pony never be allowed to get away with bad behavior, and he must be reprimanded if he attempts anything you determine to be unsuitable. For example, I was told that the pony I'm working with attempts to nip the kids when they are leading him, so I never let him get too close or pushy when I am leading him. I also want him to stand still for the kids to mount, so I do not allow him to move when I am mounting. These little things will all help to reinforce his manners and my dominance over him. I agree that some professional help may be beneficial to teach both you are your kids how to handle him properly so that he will revert to the same sweet, submissive pony you purchased. Good luck with him, don't give up yet!