There was nothing in the Terms of Service that say any authors forfeit content ownership rights. However, as rawr pointed out, since he now "owns" the content he is responsible for all content, including everything illegal (and there is PLENTY). Not to mention he is using tactics to make it appear as through his website is receiving more traffic to gain profit.
Regardless, I wonder how his ISP and sponsors would feel if he was the owner of a site that hosted a vast array of unlawful activities. Killing cats? Child Porn? Every drug imaginable? Copywritten material from other sites (ironic)? I wouldn't want to business with a man like that.
By refusing authors to edit/control their own posts and banning the author, Rick has assumed control and responsibility of the content. My advice is that he deletes every post from all banned members just to keep himself out of legal trouble.
EDIT: Modify your posts a little anyway... Rick may not have a leg to stand on, but it's a courtesy for Jeff.