Sean Diddy's sex trafficking arrest shakes music industry as record label execs brace for fallout

Diddy was jailed on Tuesday without bail to await trial in his federal sex trafficking case.

Sean 'Diddy' Combs' arrest and incarceration in connection with a federal sex trafficking case has sent shockwaves through the music industry, with several high-profile executives potentially at risk as they brace for the fallout from the ongoing legal proceedings.

An insider told Dailymail.com on Tuesday that the situation surrounding the three-time Grammy winner, 54, has prompted music executives and labels to create contingency plans in case damaging information is made public following Combs' arrest on Monday.

“There are at least five execs who have been advised to explore their options as they will not be protected by the shareholders if any allegations emerge,” a source revealed to Dailymail.com.

The source added that “the labels are petrified because recording companies tend to be dragged into lawsuits,” and encouraging executives who may pose a liability to "clean up their acts" is a way for the companies to safeguard themselves.

Combs was sent to jail on Tuesday to await trial in his federal sex trafficking case, after a magistrate judge ruled that he be held without bail in a case accusing him of overseeing a corrupt empire involving sexual crimes.

The music mogul pleaded not guilty on Tuesday to charges of racketeering conspiracy and sex trafficking. He is accused of coercing both female victims and male sex workers into drug-fueled, sometimes days-long sexual activities known as 'Freak Offs.'

The indictment also claims that Combs abused and manipulated women for years, using blackmail and extreme violence to control his victims. It alludes to an attack on his former girlfriend, R&B singer Cassie, that was reportedly captured on video.

Prosecutors argued for Combs to be jailed. His defense team suggested a $50 million bond with home detention and electronic monitoring. However, U.S. Magistrate Judge Robyn Tarnofsky sided with the prosecution.

Combs took a long drink from a water bottle before being escorted out of the courtroom without handcuffs. As he left, he glanced at family members in the audience.

“Mr. Combs is a fighter. He's going to fight this to the end. He's innocent,” his attorney, Marc Agnifilo, stated after the hearing, adding that they would appeal the decision to deny bail.

The founder of Bad Boy Records is accused of physically assaulting women by hitting, punching, and dragging them, as well as throwing objects at them and kicking them. He allegedly enlisted personal assistants, security, and household staff to help conceal his actions.

“Not guilty,” Combs said in court, rising to speak after listening to the allegations with his uncuffed hands clasped in his lap.