Peloton Interactive Inc (NASDAQ:PTON) will pay US$19mln for failure to report hazards and continuing to distribute its Tread+ treadmill that later was linked to the death of a child and several injuries to other users.
“Beginning in December 2018 and continuing into 2019, Peloton received reports of incidents associated with pull under and entrapment in the rear of the treadmills,” said the US consumer product safety commission (CPSC).
The CPSC stated that Peloton “did not immediately report” these issues.
Only after a death of a six-year-old and 13 injuries did the exercise equipment company recall the treadmill.
Despite announcing the recall in May 2021, 38 more of the treadmills were knowingly distributed.
The New York company, which gained prominence during pandemic lockdowns for its exercise bikes, made US$253mln in underlying profits in the fiscal year to 30 June 2021.
Peloton axed more than half of its workforce last year as sales continued to slow as pandemic restrictions were lifted, also making a series of changes to senior management, including the resignation of co-founder John Foley following the appointment of Barry McCarthy as CEO in February 2022.
Peloton made a loss of US$33mln in its most recent quarterly update.
Shares fell 3% overnight to US$8.58, representing a 93% plunge since May 2021.