Pomerantz Named Co-Lead Counsel in Investor Suit Against Peloton

The United States District Court for the Eastern District of New York has named Pomerantz Co-Lead Counsel in a securities class action against Peloton Interactive, Inc. The case alleges that Peloton’s annual and quarterly reports overstated the company’s efforts to increase product safety, while underestimating its future returns and the need to set aside reserves for product recalls.

Peloton is a fitness company best known for selling its namesake exercise bike, as well as for the interactive ride programs that have gained a large cultural following. In 2021, following a report from the Consumer Product Safety Commission (“CPSC”), Peloton was forced to recall its treadmill products after it was found that several people and pets had been pulled under the exercise machines. Peloton assured the public it was working cooperatively with regulators to bolster the safety of its products and would need to set aside fewer reserves for recall expenses going forward. However, in May of 2023, the CPSC recalled nearly 2.2 million Peloton bikes over concerns about the seat post, namely the possibility that it could break, causing injury to the user. On this news, Peloton’s stock price fell $0.67 per share, or 8.9%.

The suit also names former Peloton CEO Barry McCarthy, former CFO Jill Woodworth, and current CFO Elizabeth F. Coddington as individual defendants in the suit.

Further information on the background of the case can be found here.