When a company receives a credible report of a product defect that could "create a substantial risk of injury to the public," the company has 24 hours to report it the CPSC. When Fisher-Price first received its first report of a nail fastener coming loose from a Little People Animal Sounds Farm toy in September 2002, it did nothing. From the CPSC:

Over the next two months, Fisher-Price received nine additional reports, including one case of a child placing the nail fastener in her mouth.

By February 2003, Fisher-Price had received two reports of parents concerned that this problem posed a choking hazard to children and a report of a December 30, 2002 incident in which a 14-month old child aspirated a nail fastener into his lung. The child was taken to the hospital and underwent an emergency surgical procedure to have the metal nail fastener removed.

It was not until March 2003 that the company reported the safety hazard with the Little People Animal Farm to the Commission. By that time, Fisher-Price was aware of at least 33 reports in which the nail fastener came loose from the stall doors. These included four reports of children who put the metal nail fastener in their mouths and the one case of the child who aspirated the nail fastener.

Fisher-Price Fined $975,000 for Failing to Report a Serious Choking, Aspiration Hazard with a Popular Children's Toy [CPSC]