Investors sue over Mattel toy defects

Attorneys for a Michigan pension fund alleged in a shareholder lawsuit that Mattel Inc. had misled investors by delaying the reporting of defects in its toys to federal regulators,

The lawsuit also accuses three current members and one former member of Mattel’s board of engaging in illegal insider trading by dumping more than $33 million in stock before the company’s massive toy recalls in the summer.

Since August, El Segundo-based Mattel has announced three recalls of 21 million toys because of dangers to children from lead paint or from tiny magnets that can be harmful if swallowed.

Mattel executives did not immediately comment on the suit.