Peloton Says CPSC Staff Recommends Civil Penalties Related to Treadmill Recall

Peloton Interactive Inc. said on Wednesday the U.S. consumer safety regulator’s staff intends to recommend the agency that civil monetary penalties should be imposed on the fitness equipment maker over its recall of treadmills last year.

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 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.

“While we disagree with the agency staff, we are engaged in ongoing confidential discussions with the CPSC.” the company said in a delayed annual filing with the U.S. Securities and Exchange Commission.

CPSC did not immediately respond to a request for comment.

Shares of Peloton were down about 1% at $8.62 before the bell.

Since the recall last year, multiple agencies including the U.S. Department of Justice have opened probes into the company. 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.