Mattel

A shareholder derivative complaint was filed in the Delaware Chancery Court against the toy maker regarding alleged lapses in reporting safety issues to regulators regarding its toy defects. The lawsuit was filed on behalf of all Mattel shareholders and accuses Mattel directors of breaching their fiduciary duties by failing to report product problems to regulators on a timely basis, alleging that the reporting delays date back into the 1990s.

Since August 2007, Mattel has had three major product recalls and were forced to remove nearly 21 million toys from shelves worldwide due to lead paint used on the toys by Chinese suppliers and design flaws for other toys that could do serious harm to children. After the recalls were announced, Mattel's share price dropped approximately 20 percent.

The lawsuit seeks disgorgement of profits from insider stock sales and seeks compensatory and other damages resulting from the board's failure to manage problems with the company's products and make timely disclosures to regulators and investors about the problems.

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