Peloton has been subpoenaed by the Justice Department and the Department of Homeland Security for documents and other information related to its reporting of injuries associated with its exercise equipment, the company revealed in its annual 10-K form, The company also said it is being investigated by the SEC.
The excerpts of the document related to the probes follow:
“[A]s previously disclosed, we have received reports of a number of injuries associated with our Tread+ product, one of which led to the death of a child. In April 2021, the U.S. Consumer Product Safety Commission (“CPSC”) issued a warning to consumers about the safety hazards associated with the Tread+ and is continuing to investigate the matter. We are also subject to investigations by DOJ, DHS, and the SEC related to this matter. We intend to cooperate fully with each of these investigations, and at this time, we are unable to predict the eventual scope, duration or outcome of the investigations.
“In addition, the DOJ and U.S. Department of Homeland Security (“DHS”) have subpoenaed us for documents and other information related to our reporting of the injuries associated with our products and the SEC is also investigating our public disclosures concerning these matters.”
In May, Peloton recalled about 125,000 of its treadmills less than a month after denying they were dangerous despite the death of at least one child and injuries to 29 users.
The U.S. Consumer Product Safety Commission warned on April 17 that people with children and pets should immediately stop using the Tread+
The disclosures in an SEC filing arrive a day after the company posted a loss for its most recent quarter, showed slower revenue growth and cut the price of its most popular product. A portion of the latest quarter’s loss stemmed from the recall of its treadmill machine.
The company announced Thursday that it is cutting the price of its Peloton Bike, the product that was the cornerstone of its popularity, to $1,495 from $1,895.
Photo courtesy Peloton