John Foley, as well as 11 other current and former Peloton executives are being sued by an investor for alleged insider trading. The lawsuit, filed last week, claims Peloton executives sold almost $500 million in stock while concealing safety issues with the Tread+ before it was recalled.
The lawsuit, brought forth by Peloton shareholder Krikor Arslanian, alleges that John Foley and other top Peloton executives were aware of safety issues with the Tread+. But instead of informing shareholders, Peloton executives rushed to sell off stock.
When the US Consumer Protection Safety Commission (CPSC) asked Peloton to recall the Tread+, Peloton refused. Instead, John Foley wrote a letter regarding Peloton’s treadmills, stating that Peloton had “no intention” to stop selling or to recall its treadmills. Two weeks later, Peloton did eventually agree to a recall.
The lawsuit claims that:
Peloton and the Individual Defendants, especially the inside sellers, were undoubtedly aware in real time of the injuries described herein and that theirflagship products had a design flaw and were unsafe, especially around susceptible children and animals
You can view the entire complaint at Bloomberg Law, where the story was first reported.
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