Toy maker Mattel Inc. will pay $12 million to 39 states, including New York, to settle an investigation over Chinese-made lead-tainted toys shipped to the U.S. in 2007, state officials said Monday.

Mattel and its Fisher Price unit recalled more than 21 million Chinese-made toys last year, beginning in August, fearing the items were tainted with lead paint and tiny magnets that children could accidentally swallow.