There were two bugs: One on the rules page, showing the long obsolete line that you cannot infiltrate a faction with the sole intention of causing harm.
The other one was that in the event of a faction leader's death, the 2IC (or in this case, the member with the highest privileges) didn't automatically become leader.
Thus, the GE's (or rather those of one character who is affiliated with the GE) actions were perfectly within the rules. The actions of the leaders of the factions owned by CSA however were bug exploits (as they would not have had time to transfer assets from their factions to their personal inventory before being replaced). Those actions have been or will be reversed.
The bugs that were involved in this have also been solved.