The Consumer Product Safety Commission said toy maker Mattel Inc. and its Fisher-Price unit will pay a $2.3 million civil penalty to settle allegations that they knowingly imported and sold up to two million children's toys that violated a federal lead-paint limit.

It is the agency's highest toy-related penalty ever. The agency said that as part of the settlement agreement, the companies deny the allegations.

The settlement stems from a string of Mattel and Fisher-Price product recalls in 2007.

The CPSC said before those recalls, Mattel imported up to 900,000 noncompliant toys between September 2006 and August 2007.

Fisher-Price imported up to 1.1 million noncompliant toys between July 2006 and August 2007, the CPSC said.

Mattel said the settlement "resolves Mattel's outstanding issues with the agency related to certain matters that arose in 2007." Mattel said it "promptly took a series of steps after discovering compliance issues with some of our toys at that time"...and "continues to be vigilant and rigorous in ensuring the quality and safety of our toys."

Toy makers recalled millions of toys in 2007, mostly because of lead-paint violations.

Source:The Wall Street Journal