The only thing about what he did that was against the T&C of Eve was converting his credits to real money.

Eve online is modeled after a frontier, and as such, many things that are strictly banned in other MMOs are actually encouraged in Eve. If you manage to gain the trust and passwords of someone high up in some alliance, and transfer all his assets to yourself, it's considered good intrigue and gameplay by CCP.

There's an entire bounty system set up in game, if you've got a problem with someone you either deal with it yourself or pay someone stronger to deal with it for you. It's a very simple system, and I'm unsure why so many people are using the 'banks' in game, because it's essentially handing money over to someone who can now buy an unstoppable ship.

Personally my 'bank' account was collecting ores in secure stations.