NEW YORK CITY (NewsNation Now) — On the heels of exercise company Peloton releasing an improved running machine after the previous one was recalled due to safety concerns, the corporation is now facing Department of Justice, Department of Homeland Security and Securities and Exchange Commission investigations.
Peloton Interactive Inc announced the investigations in its annual SEC report when discussing ongoing legal proceedings against the company.
“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,” Peloton stated.
The company is also facing multiple lawsuits related to the recalled Tread+ bikes from users who were injured or suffered the death of a child.
Tread and Tread+ were Peloton’s popular treadmill product lines, but they became a safety hazard due to the machine’s tendency to pull objects and people under. At least 70 injuries were reported by the equipment and one child died.
Peloton resisted recalling the machines after the initial injury reports, despite a warning from the U.S. Consumer Product Safety Commission about the treadmill’s dangers. It ultimately ended up recalling the machines in May.
The SEC’s investigation is related to that delay of public notification about the potential for injuries related to the treadmill.
Tread+ cost $4,200 and the company issued full refunds to everyone who purchased a recalled piece of equipment.
The announcement of government investigations comes as the company attempted to turn the page with a new Tread machine. Peloton promises that the new treadmill has enhanced safety features and a lower price point.
As a part of the new safety features, the machine now requires both a physical safety key and a security PIN before activating.
Peloton’s stock price slid 8.5% following it reporting lower than expected profits the previous quarter and its announcement it was being probed by U.S. regulators.
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