Domain registrar, cu.cc, got their whole domain labeled as spam due to misuse of their customers.
Miro from cu.cc asked why his whole domain was labeled as having malware when it did not have malware on it.
Google's JohnMu replied to him in the Google Webmaster Help forums saying that subdomains can impact the parent domain. John said:
In situations where we find a significant number of subdomains with malicious content, our systems may assume that there is a general issue with the domain name and flag it accordingly. To make sure that users are not able to abuse your subdomains, I'd recommend using our Safe-Browsing API to scan for all known subdomains, as well as taking the usual measures on your side to prevent abuse proactively.
So when offering free subdomains and sites, be careful!
Forum discussion at Google Webmaster Help.