I didn't know the details but I found the case on Wikipedia (
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) and it's a pretty interesting read. According to the article, he was in a custody dispute with his spouse and "someone" accused him of child abuse, instigating a search of his home where they found a stack of grade-a lolicon material.
Apparently the legal definition of CP (in Sweden)
was broad enough where it could include fictional drawings but it had never been tested in court before. At first they did charge him on lesser CP possession (basically, just a fine). But of course, no one wants to be labeled a pedophile for the rest of their life so he appealed.
By the time the case had reached the supreme court, none except one image could hold up to the legal definition (and it's unclear what was different about that one image). He was also acquitted on related charges because of his line of work as a manga translator and "an expert of Japanese culture". Basically tastes aside, the court concluded that this man was neither a child molester nor pornographer. He was just doing his job and the things he was translating were merely artifacts of Japanese culture and not the fault of his work as a translator.
This guy wasn't an artist though. He was accused of possession, related to a different case revolving an actual child. I'm not sure what the case would be for an artist producing loli art. I don't know for sure but my gut feeling is that artists would have an even higher legal standing because it'd fall under freedom of artistic expression. But the whole topic is a bit of a minefield. Although I doubt anyone will kick your door down for making suggestive drawings.
Interestingly, as a result of the case, they published the offending material (
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) and from now on, neither those images nor any similar image can be considered CP in Sweden. So yay.