The Sterling Heights Police and Fire Retirement System filed the suit Wednesday against Mattel and its board, alleging that a mishandling of product safety procedures was responsible for the three recalls, The New York Times reported.

The suit claims Mattel's directors breached their duty to shareholders by allowing the company to delay reporting the hazardous toys past the 24-hour window required by federal regulators. The suit also accuses four directors of selling stocks and profiting from insider knowledge of the pending problems.

Mattel has said in response to a query from the House of Representatives Committee on Energy and Commerce that it learned of possible lead problems in June, which was after the board members sold $33 million in stock.

Mattel announced in early August it found lead paint on toys featuring popular children's characters such as Dora the Explorer. The company weeks later announced recalls of more toys tainted with lead paint, and 18 million toys that had hazardous magnets on them. In total, Mattel recalled 21 million toys.