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Nasdaq.com has reported that an Oak Brook, Illinois toymaker, RC2 Corp. has been slapped with a $1.25 million fine for violating the US government’s lead paint ban.

The toys in question were Thomas and Friends train sets sold between 2005 and 2007. "More than two dozen styles of vehicles, buildings and other train set components" had paint that violated the federal lead limit, the commission noted. The limit was 0.06 percent at the time; it has since been strengthened to 0.009 percent.

"The highly publicized recall of [RC2’s] toys was a catalyst for … making the lead-in-paint limits under federal law even stricter," suggested CPSC chairman Inez Tenenbaum.

Only two months after RC2’s train sets were recalled in June 2007, toymaker Mattel (NASDAQ: MAT) recalled almost one million Chinese-made toys because their paint contained dangerous levels of lead.

A month after that, at the second U.S.-China Consumer Product Safety Summit, China agreed to prohibit the use of lead paint on U.S.-bound toys. At the fourth such summit, held in October of this year, the countries reiterated their commitment to ensuring that toys were safe.

My question is: Why only a $1.25 million fine? This company was caught red-handed selling lead paint-based toys to our kids. Why is this company still doing business?

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