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Peloton investors say that the company withheld information about the safety of its Tread+, leading to losses when consumers reported injuries, including the death of a child, due to the poor design of the now recalled exercise equipment.
The class action lawsuit, brought on behalf of investors who purchased Peloton stock between Sept. 11, 2020, and April 16, 2021, accuses the company of making false and misleading statements. The lawsuit, which has not yet been filed, contends that Peloton failed to properly disclose multiple reports that its pricey treadmill, the Tread+, had injured children, presenting a serious safety issue to kids and pets.
Further, the lawsuit says that when the reports surfaced, the company continued to refuse to take appropriate action, even in the face of an urgent warning to Peloton users by the US Consumer Product Safety Commission (CPSC) issued on April 17.
Indeed, Peloton resisted calls to recall the Tread+, waiting until May 5 to “do the right thing,” according to a statement accompanying the recall by the company’s Chief Executive Officer. Despite initial assertions that the treadmill was safe as long as used properly, the company now warns that it should not be used and is offering full refunds to customers who purchased one of the 125,000 treadmills it sold.
The investors class action lawsuit also claims that Peloton has also failed to disclose another safety risk associated with the Tread+. They allege that, in addition to potentially pulling small children or pets under the machine, users who become unbalanced can be injured, according to the CPSC.
The class action lawsuit claims that investors were misled into buying Peloton stock and suffered losses after the safety concerns of the Tread+ were made public.
In addition to finally recalling the Tread+, Peloton faces a consumer class action lawsuit over the $4,300 treadmill. Filed April 21, the lawsuit claims that the lead plaintiff and other consumers would not have purchased the pricey exercise equipment had they known about the severe safety risk it presented to pets and children.
What do you think about the investors’ claims over Peloton stock? Tell us in the comment section below!
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