U.S. regulators on Monday proposed fining Toyota Motor Corp the maximum penalty of $16.4 million, saying the company failed to notify the government in a timely way about accelerator pedal flaws that were the subject of a massive recall in January.

The Transportation Department's National Highway Traffic Safety Administration accused Toyota of failing to notify regulators about the defect for at least four months even though Toyota knew of potential risks to consumers.

The penalty being sought would be the largest fine ever levied against an auto manufacturer by the U.S. government.

The previous largest fine was $1 million against General Motors because of a windshield wiper failure in 2002-2003 model vehicles.

Auto manufacturers are legally obligated to notify regulators within five business days if they determine that a safety defect exists.

Regulators learned through documents obtained from Toyota that the company knew of the sticky pedal defect since at least September 2009. The recall of approximately 2.3 million vehicles in the United States was announced in late January.

A representative from Toyota could not immediately be reached for comment.

(Reporting by John Crawley; Editing by Toni Reinhold)

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