Ruth Handler company, Ruthton Corp., formed by her and Peyton Massey, which manufactured a more realistic version of a woman's breast, called "Nearly Me". She personally fitted one for the then first lady, Betty Ford. In 1974, Handler resigned from Mattel after investigations of producing fraudulent financial reports. In 1978, Handler was charged with fraud and false reporting to the Securities and Exchange Commission. She pleaded no contest, was fined $57,000 and sentenced to 2,500 hours of community service.She blamed her illness for making her "unfocused" on her business. Though the Handlers took a more hands-off approach to their company's business practice
Daniel Handler an incident in which Handler had made inappropriate jokes directed at her, such as "Are you a virgin, too?!" and "These children's book events always turn into orgies!" This led to many other women accusing Handler of verbal sexual harassment at book conferences; among the public accusations are stories of Handler telling a woman he had just met to kiss a random stranger, making crass comments to a teenage girl and walking off without apology when confronted, referring to a stranger as a "hot blonde" and making a "uni-ball" double entendre in front of young children. The incident is part