The ability to print Grade Certification labels has be one of the most corruptive forces on earth. It's basically the ability to print money, at will.
That one guy appears to have had access to PGX's equipment for years now. A situation that could've been resolved in short order. That it has never been dealt with leaves the impression their entire enterprise was founded around that purpose.
It would be like allowing a CGC employee to buy, grade, label, and encapsulate their own books. Opens up all kinds of temptation for abuse. "Hey, I need $2k so I'll buy raw 'Book X #1 4.0,' call it a PGX 7.0, sell it and go on about my business." The same example applies as the OP stated regarding cracking lower grade CGC's to make them higher grade PGX's.
Sadly, I don't know what type of legal recourse could occur because grading IS subjective and PGX could say that the grade is "their interpretation" of the condition of the book.