Peloton's stock fell after the company agreed to pay $19.1 million in civil penalties to resolve charges related to a recall of its treadmills.
Shares of Peloton Interactive Inc. fell Thursday after the home-fitness company agreed to pay a civil penalty of $19.1 million to settle charges related to its response to reports of injuries and one death caused by its treadmills.
The U.S. Consumer Product Safety Commission said the penalty resolves charges that Peloton knowingly failed to report that its Tread+ treadmill had a defect that could create unreasonable risk of injury. The penalty also settles charges that the company knowingly violated the Consumer Product... Shares of Peloton Interactive Inc. fell Thursday after the home-fitness company agreed to pay a civil penalty of $19.
The U.S. Consumer Product Safety Commission said the penalty resolves charges that Peloton knowingly failed to report that its Tread+ treadmill had a defect that could create unreasonable risk of injury. The penalty also settles charges that the company knowingly violated the Consumer Product Safety Act by distributing recalled treadmills.In addition to the penalty, the settlement agreement requires Peloton to maintain a system of internal controls designed to ensure compliance with the CPSA.
In March 2021, word got out that the company’s co-founder and then-chief executive, John Foley, had recently learned about a fatal accident involving a child and the Tread+ treadmill. In April, the company said that a CPSC warning to consumers to stop using the Tread+ was “inaccurate and misleading,” adding that it “knows the Tread+ is safe” as long as consumers heed safety warnings.
In May 2021, the company said it had voluntarily recalled 125,000 Tread+ treadmills, with Foley saying it was a “mistake” to wait so long to respond to the CPSC’s recall request.Shares of Peloton, once the embodiment of a COVID beneficiary, tumbled 77.8% in 2022 and 76.4% in 2021, after rocketing 434.2% in 2020. In comparison, the S&P 500 SPX lost 19.4% in 2022, gained 26.9% in 2021 and rose 16.3% in 2020.
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