ADMINISTRATIVE PROCEEDING
File No. 3-19009

March 1, 2019 - The former CFO of a publicly-traded pawn shop operator has agreed to pay a $50,000 civil penalty to settle charges brought by the Securities and Exchange Commission that he negligently misled an advisory firm to obtain a fairness opinion on a related-party transaction.

According to the SEC's order, for more than a decade, Austin, Texas-based EZCORP Inc. had entered into annual consulting agreements with its sole voting shareholder. Investors and analysts often expressed skepticism about these agreements. In response to these concerns, EZCORP's audit committee obtained fairness opinions from an advisor stating that these agreements were financially fair to the company. During the company's 2014 fiscal year, the advisor refused to issue an opinion because the proposed consulting fee was too large in relation to EZCORP's projected earnings. After the advisor's refusal, EZCORP's then-CFO, Mark E. Kuchenrither, took several unreasonable actions that increased the company's projected earnings by more than 30%. Kuchenrither assumed that EZCORP would complete a high-yield debt offering, and then use a portion of the offering proceeds to acquire companies that would provide additional earnings to EZCORP. These increased projections had no reasonable basis, and never occurred. Kuchenrither also did not consult with EZCORP's full board or senior management, who had approved the initial projections sent to the advisor, and he affirmed his projections even though he was aware that any talks to acquire companies were only in "preliminary stages." EZCORP subsequently filed a Form 8-K and Form 10-K (certified by Kuchenrither as the company's CFO) that did not accurately describe the fairness opinion process."

Without admitting or denying the findings in the SEC's order, Kuchenrither consented to the entry of an order that he negligently violated the antifraud provision of Section 17(a)(3) of the Securities Act of 1933 and the certification provision of Rule 13a-14 under the Securities Exchange Act of 1934, and that he caused EZCORP's violations of the disclosure and recordkeeping provisions of Section 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-11 thereunder. Kuchenrither also agreed to pay a $50,000 civil penalty.