Peloton Says It's Under Investigation by Departments of Justice, Homeland Security
The DOJ and Department of Homeland Security have subpoenaed the company for documents and information about the injuries caused by the Tread+ treadmill.
Peloton revealed in a Securities and Exchange Commission filing that the Department of Justice and Department of Homeland Security have subpoenaed the company for documents and information about the injuries caused by the Tread+ treadmill.
The departments are after information on the company’s reporting of the injuries, specifically, and Peloton included this information in its annual 10-K form so investors could be aware of any potential risks.
“From time to time, we may be involved in claims and proceedings arising in the course of our business. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain,” said the filing.Related: Peloton Posts Gains on New Loop Capital Coverage
The document went on, “In addition, as 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.”
The filing noted the DOJ and DHS subpoenaed and added that “the SEC is also investigating our public disclosures concerning these matters.”
In April, Peloton pushed back against the Consumer Product Safety Commission’s warnings about Tread+, calling the commission’s press release “inaccurate and misleading” and saying, “There is no reason to stop using the Tread+, as long as all warnings and safety instructions are followed. Children under 16 should never use the Tread+, and Members should keep children, pets, and objects away from the Tread+ at all times.”
In May, the CPSC and Peloton jointly announced the recall of the Tread+ machines after a child’s death and 70 incidents. Tread treadmills were also recalled due to risk of injury.