SE really should return your items and money. There is no one to blame but the person who took it. There is no blame on the FC that gave the guy the permissions to promote.

It is only fair one would assume that someone could not promote above their rank. I have known about this for a while. Promotion and demotion work both ways.

As long as I have promotion/demotion privs I can promote or demote anyone from any rank to any rank except master. The game does not let you promote yourself, but you can demote yourself strangely enough, I did that before I quit the game. I still lurk the forums, they are a never ending source of amusement when I am bored.
Master can only be assigned to a new person by the existing master.

To the FCs:
To make it clear.
Someone with promote/demote privs can promote/demote anyone to any rank except Master.
If the master leaves before passing on the rank, it is currently forever locked to that character.
They can demote themselves.
Master can only be assigned by the current master. There can be only one.