With regards to a lot of people getting banned, I decided to look in the Terms of Use and the summoners code if they had any mention of this type of behaviour.
Then I came across this:

A. Agreement. Riot Games reserves the right, in its sole and absolute discretion, to revise, update, change, modify, add to, supplement, or delete certain terms of this Agreement as the Properties evolve; provided, however, that material changes to this Agreement will not be applied retroactively. Such changes will be effective with or without prior notice to you. You can review the most current version of this Agreement by clicking on the “Terms of Use” link located at the bottom of the Site. You are responsible for checking this Agreement periodically for changes. If any future changes to this Agreement are unacceptable to you or cause you to no longer be in agreement or compliance with this Agreement, you must terminate this Agreement and immediately stop using the Properties. Your continued use of any of the Properties following any revision to this Agreement constitutes your complete and irrevocable acceptance of any and all such changes. Please note that Riot Games may also revise other policies, including the EULA and Privacy Policy, at any time, and the new versions will be available on the Site. If at any time you do not agree with any portion of the then-current version of a particular Riot Games policy, including but not limited to this Agreement, you must immediately stop using the Properties.

The most interesting part from this is:

provided, however, that material changes to this Agreement will not be applied retroactively.

Riot did not have the policy to ban for false reporting prior to this ban wave, but they are violating their own Terms of Use by applying the bans retroactively to previous reports.

What are everybodies thoughts on this?
Especially someone more versed in Terms of Use law and contract laws