Shareholders Sue Mattel For Delaying Toy Recalls

Law360, New York (October 10, 2007, 12:00 AM EDT) -- After months of high-profile recalls and political scrutiny, Mattel Inc. is now also facing a derivative suit by its shareholders, which on Wednesday accused the company of misleading investors by continually failing to report serious defects in its toys to federal regulators.

The suit, brought on behalf of a public police and fire pension fund in Michigan, says that Mattel regularly delayed contacting the Consumer Product Safety Commission about possible defects in its toys – sometimes for months after first learning about those problems.

Under the...
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