Regulators have discovered some nail polishes found in California salons contain high levels of substances known to cause birth defects despite carrying labels that identified them as being free of certain toxic chemicals. A report due to be released today found 10 out of 12 products that claimed to be free of the chemical toluene actually contained it, with four products containing a dangerously high level. The report says nail products could harm thousands of people who work in California nail salons, as well as their clients.