Peloton Interactive on Wednesday disclosed that staff at the top U.S. consumer safety regulator plan to recommend the company be fined for violating federal safety laws related to last year’s recall of a line of treadmills.
The fitness equipment maker, which has incurred operating losses each year since its inception in 2012, had paused sales of its ‘Tread+’ machines in all markets last year and announced a costly recall following reports of multiple injuries and the death of a child in an accident.
Peloton, in a delayed annual filing on Wednesday, said the U.S. Consumer Product Safety Commission notified it in August that the agency’s staff believed the company had failed to meet statutory obligations under the Consumer Product Safety Act.
The agency’s staff also recommended civil monetary penalties be imposed on Peloton.
“While we disagree with the agency staff, we are engaged in ongoing confidential discussions with the CPSC.” the company said in the filing with the U.S. Securities and Exchange Commission.
The CPSC declined to comment. The agency is not required to adopt staff enforcement recommendations.
Shares of Peloton were up about 1% in morning trade.
Since the recall last year, multiple agencies including the U.S. Department of Justice have opened probes into Peloton. Those investigations are continuing, Peloton said on Wednesday.
The company is in the middle of a restructuring plan to revive its sales, which have plummeted as people head back to working out at gyms.