By first buying the credit default swaps and then trying to affect market sentiment by going short on the underlying bond, investors can make large profits without a change in the fundamental value of the reference entity and, worse, to its detriment.   Third, credit and liquidity risk management should not become a force of procyclicality for the financial system as a whole.
This was a groundbreaking verdict that for the first time explicitly established that a public authority – in this case the police – cannot pursue the public good in full discretion without any limitations to the sacrifice of individuals and their legal positions.