The same has been happening as long as commercially exploited folk and trad. music has existed, I suppose. People who run a record label have to have an acute business sense, and sometimes it's too astute for their own (and their artists') good. Heard the same about Transatlantic years ago from a victim, a close friend.
I once asked a musician why so many artists (his own band included) were joining Greentrax' books. Five words: "Because Ian Green is honest!"
I hope the 'Five' will get what is due to them (and blaze a trail for others in the process) without Green Linnet going down.