Here are the details of a lawsuit in Massachusetts relating to the use of confidential informant. You can find the original story here.
My sense is that this is going to be a hard one for the city to defend.
It is worth reading both the story and the lawsuit. There is a lot that can be learned. There is no reason why this type of conduct should be taking place in a police agency in the 21st century.
Systems and processes will mitigate the risks and good training for all involved goes a long way to educating staff as to these risks.
It is much more effective for a Chief of Police to invest now in systems and training than to wait for a lawsuit and then try to correct things.