On Tuesday, Peloton announced the upcoming release of its entry-level Tread device. The news came before a disappointing earnings report and after the recall of its two treadmill products. Today, the connected fitness company noted in a filing with the SEC that it had been subpoenaed by the US Department of Justice and the Department of Homeland Security.
The two subpoenas are part of investigations into how the company reported injuries caused by its treadmills. This is apparently another sign that, despite the return of one of its two Tread products to the market, the bigger implications for the company are far from over.
Platoon writes in the file:
Injuries sustained by members or their friends and family members, or others who use or purchase our connected fitness products, could expose us to regulatory proceedings and litigation by governance agencies and private litigants. brought against us which, regardless of their merits, could damage our reputation, distract management from our operations and result in substantial legal and other costs. For example, we are currently subject to CPSC investigation and other litigation related to injuries sustained by members and others who use or purchase the Tread +, and we have reporting obligations with the organizations. safety regulations in all jurisdictions where we sell connected fitness products, where the reporting may trigger further regulatory investigations.
The company declined to comment further on the investigations.
Peloton notably disagreed with the US Consumer Product Safety Commission (CPSC) initial warning to stop using its treadmill products after an accident with the Tread + resulted in the death of a child. At the time, Peloton said he was “troubled” by the information and insisted that “there is no reason to stop using the Tread +, as long as all the warnings and safety instructions are observed ”. In May, CEO John Foley apologized for the pushback and agreed to work with the CPSC on a recall.
The Commission cited more than 70 incidents in all, noting that “a six-year-old child recently died after being pulled under the back of the treadmill. Additionally, Peloton has received 72 reports of adult users, children, pets and / or objects pulled under the back of the treadmill, including 29 reports of child injuries such as scrapes to the feet. second and third degree, fractures and lacerations. . “
The cheaper Tread model, meanwhile, was at the center of a separate issue in which the product’s touchscreen could come loose and cause injury during use. The new version of the device has a reinforced screen. The recalls affected approximately 125,000 Tread + systems and over 5,500 Treads, which were in preview.