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Sarbanes-Oxley Act Offers Recording Artists Potent Tool for Challenging Label Operations

By Jay Rosenthal
February 27, 2007

The corporate scandals of the past decade generated sensational headlines and demands for dramatic corporate-governance reform. In response, the government initiated a tidal wave of legislative reform and shareholders went on the march. Their new battle cry was 'corporate responsibility.'

Historically, recording artists have not paid too much attention to the corporate boardroom, except for those few artists owning their own label or working as a major-label executive. Disgruntled artists traditionally opted for filing lawsuits against their record labels claiming, among other things, underpayment of royalties, breach of fiduciary duty or outright fraud. Corporate governance was simply not on their radar.

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