The CSC commissioned an independent laboratory to analyze the contents of 48 products marketing for use by babies for the two cancer-causing chemicals formaldehyde and 1,4-dioxane.  The real concern is not neccessarily that one product may contain small amounts of these dangerous chemicals but that many of them would and the small amounts would add up and potentially lead to illness.  Both of these chemicals are known carcinogens and are associated with a number of health problems.  Many countries have laws restricting the use of these chemicals in care products, the United States is not one of those countries.  Formaldehyde and 1,4-dioxane are not intenionally added to products.  Formaldahyde is a by-product of many commonly used preservatives.  1,4-dioxane is a by-product of chemical processing and can be removed from the product but manufacturers are not required to do so under current law.  Common ingredients likely to be contaminated with 1,4-dioxane include PEG-100 stearate, sodium laureth sulfate, polyethylene and ceteareth-20.

source: The Campaign for Safe Cosmetics