- Peloton Interactive, Inc PTON agreed to pay a $19.1 million civil penalty to the US Consumer Product Safety Commission (CPSC).
- The settlement resolved CPSC’s allegations that Peloton willfully failed to promptly report to CPSC a defect in its Tread+ treadmill that could pose a significant product risk and an unreasonable risk of serious injury to consumers.
- The civil penalty also settled charges alleging that Peloton knowingly distributed recalled treadmills in violation of the Consumer Product Safety Act (CPSA).
- Beginning in December 2018 and 2019, Peloton received reports of incidents related to undermining and pinching in the rear of treadmills.
- When Peloton submitted a report to the commission, there were more than 150 reports of people, pets, and objects including the death of a child and 13 injuries.
- Peloton and the Commission jointly announced this recall of the Tread+ treadmill on May 5, 2021.
- Employees also allege that Peloton knowingly commercially distributed 38 recalled Tread+ treadmills using Peloton personnel and through third-party suppliers following the public recall.
- The settlement agreement requires Peloton to maintain an enhanced compliance program and internal controls and procedures to ensure compliance with the CPSA.
- Peloton has also agreed to file annual reports on its compliance program and internal controls for a period of five years.
- Peloton held $938.5 million in cash and Equivalents as of September 30, 2022.
- Price promotion: PTON shares traded 0.93% lower at $8.50 in the pre-market session on the last check Friday.
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