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Peloton to face federal fines linked to its treadmill recall

Financially-strapped Peloton is facing a plethora of investigations, litigation and now potential penalties from the feds related to🍸 its treadmill recall last year, the company said in a securities on Wednesday.

The Consumer Product Safety Commission told Peloton in August that it may impose civil monetary penalties because its “staff believes we failed to meet our statutory obligations under the Consum🌄er Product Safety Act,” Peloton said in the filing. 

Last year, a Peloton treadmill caused the death of a six year-old child who was pulled under the machine. Dozens ofജ other customers r♐eported that they and or their children were injured by the machines.

The agency is continuing its investigation into the exercise equipmen♓t and Peloton’s handling of the matter, according to the filing. The amount of a 🉐possible fine was not disclosed.

The struggling exercise company, which is running low on cash and has had to layoff 2,800 employees this years as it faces a steep decline in sales, can h♉ardly afford to shell out extra funds.

Peloton recalled its Tread + machine last year after a child’s death was linked to the machine. Bloomberg via Getty Images

Once a pandemic darling that benefited from housebound consumers, Peloton expanded tꦇoo quickly, investing in new equipment and manufacturing pl💝ants just as the pandemic was waning and demand for its pricey bikes dissipated.

Former chief executive and founder John Foley was ousted in February as the company launched a turnaround strat💜egy, bringing in a new CEO Barry McC🥂arthy.

At the time of the treadmill crisis, the agency warned consumers not to use the Peloton machines, citing some 70 incidents of the T🐭read + pulling people🎃, pets and objects beneath the machine.

Peloton disclosed in a government filing that the government is considering financial penalties against the company. Getty Images

Foley disclosed the death of the child on the company’s website in March 2021 and urged custome🥃rs to keep children and pets away fro༺m the equipment at all times.

“Before you begin a workout, double check to make sure that the space around your Peloton exe𝔉rcise equipment is clear,” he w🌄rote at the time.

But Foley initially disputed the agency’s characterization of the machines as being dangerous – and was later forced to back pedal his statements when the company finally recalled the equipment in May 2021.

“I want to be clear, Peloton made a mistake in our initial response tꦦo the Consumer Product Safety Commission’s request that we recal🥃l the Tread+. We should have engaged more productively with them from the outset,” Foley said in a statement at the time. “For that, I apologize.”

Peloton founder and former CEO, John Foley. AP

In the filing, Peloton also said we are presently subject to class-action litigation, private personal injury claims and other regulatory proceedings related to the Tread+ recall and other matters that, ไregardless of their merits, could harm our reputation, divert management’s attention from our operations, and result in substantial legal fees, judgments, fines, penalties, and other costs.”

Peloton said it disagrees w🎀ith the CPSC’s staff, adding “we are engaged ﷽in ongoing confidential discussions with CPSC.”