A lawsuit filed in Delaware Chancery Court by Krikor Arslanian on behalf of Peloton shareholders accuses 12 current and former Peloton executives, including co-founders John Foley and Hisao Kushi, of insider trading. The executives sold $500 million worth of stock last year despite allegedly knowing about the safety problems with the Tread+ treadmill before they were disclosed to shareholders and the public. In April 2021, the U.S. Consumer Product Safety Commission issued a consumer warning about safety risks associated with the treadmill, including an incident that resulted in the death of a child, but the company asserted that the device was safe and refused to issue a recall, though it eventually relented two weeks later. The lawsuit alleges Foley sold $77 million worth of shares, and eight other executives sold $417 million worth of shares before the public was made aware of the safety problems. They are accused of breaching their fiduciary duty to shareholders and unjustly enriching themselves, and damages and costs are sought. Several other shareholder lawsuits are also pending against the connected fitness company in federal court.

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