Peloton expecting monetary penalty from CPSC; DOJ, DHS, and SEC investigations still ongoing as revealed in 2022 10-K filing

After previously announcing a delay, Peloton released their 10-K tax form this morning. A 10-K is a comprehensive report filed every year by public companies that contains detailed information about their financial performance.

The report contains numerous interesting details, particularly regarding their work with the U.S. Consumer Product Safety Commission (CPSC). As a reminder, the Tread+ – Peloton’s original Treadmill that launched in 2018 – has not been available to purchase for over a year due to a CPSC recall. The recall was announced following the death of a child and numerous injury reports stemming from objects, people, and pets being sucked under the treadmill. After initially maintaining that the Tread+ was completely safe to use, Peloton voluntarily complied with the recall and has not sold any Tread+ devices since.

In their 10-K form filed this morning, Peloton reveals that the CPSC does not believe Peloton has properly complied and may impose penalties against the company. Page 45 of the report states:

More recently, in August 2022, we were notified by the CPSC that the agency staff believes we failed to meet our statutory obligations under the Consumer Product Safety Act and intends to recommend that the CPSC impose civil monetary penalties. While we disagree with the agency staff, we are engaged in ongoing confidential discussions with the CPSC.

There is also similar wording found on page 30 that suggests a tenuous relationship with the CPSC:

In April 2021, the CPSC unilaterally issued a warning to consumers about the safety hazards associated with the Tread+. While we do not agree with all of the assertions in the CPSC’s warning, in May 2021 we initiated a voluntary recall of our Tread+ product in collaboration with the CPSC. The CPSC is currently investigating the matter and in August 2022 we were notified by the CPSC that the agency staff believes we failed to meet our statutory obligations under the Consumer Product Safety Act and intends to recommend that the CPSC impose civil monetary penalties.

In addition, Peloton’s 10-K filing mentions that there are ongoing Department of Justice (DOJ), Department of Homeland Security (DHS), and SEC (Securities Exchange Commission) investigations related to the CPSC recall. Page 30 states:

We are also subject to investigations by the DOJ and DHS related to our statutory obligations under the Consumer Product Safety Act, and the SEC is investigating our public disclosures concerning the Tread+ recall as well as other matters. We are cooperating fully with each of these investigations, and at this time, we are unable to predict the eventual scope, duration or final outcome of the investigations.

We first reported on these investigations last year. Peloton revealed in their 2021 10-K form that multiple US government agencies had subpoenaed them for documents related to either the safety issues of the Peloton Tread+ that led to the recall, or their disclosures related to the issues.

The 2022 report provides no updates on a potential timeline for the return of the Tread+. Though a frequently asked question by members, the only recent acknowledgement of the issue has come from CEO Barry McCarthy, who shared in an interview with Bloomberg last month that he would like to reintroduce the Tread+. He also responded to a member question back in June and stated that he is “hopeful” about the relaunch of the device.

You can read the complete 2022 10-K form via Peloton’s website.


Support the site! Enjoy the news & guides we provide? Help us keep bringing you the news. Pelo Buddy is completely free, but you can help support the site with a one-time or monthly donation that will go to our writers, editors, and more. Find out more details here.

Get Our Newsletter Want to be sure to never miss any Peloton news? Sign up for our newsletter and get all the latest Peloton updates & Peloton rumors sent directly to your inbox.

Avatar photo
Katie Weicher
Katie Weicher is a writer for Pelo Buddy. She purchased her Peloton Bike in 2016 and has been riding, strength training, and yoga flowing ever since. You can find her on the leaderboard at #kweich.

Leave a Reply

Your email address will not be published.