Penalty Records was started in 1995 as a joint venture between Tom Silverman (from Tommy Boy Records) and Neil Levine. A new version of Penalty Records was relaunched in 2003 through Rykodisc and operated, through EMI for a few years before disbanding. Penalty was notable for housing artists like Noreaga, The Beatnuts, Crooked Lettaz and Lord Finesse over its early years. On January 21, 2014, it was revealed that Penalty was relaunching as Penalty Entertainment and it would be distributed by RED Distribution. CEO Neil Levine will operate Penalty Entertainment as an independent entity with distribution by Sony RED. Upon the relaunching they announced the artists signed to the label were Hi-Rez and EMC, which includes Masta Ace, Wordsworth and Strick.