Yes, regulators should enforce our regulations, if that's your question. Force the nonprofit to not profit; prevent frauds from defrauding.
In this case, a nonprofit took donations to create open AI for all of humanity. Instead, they "opened" their AI exclusively to themselves wearing a mustache, and enriched themselves. Then they had the balls to rationalize their actions by telling everyone that "it's for your own good." Their behavior is so shockingly brazen that it's almost admirable. So yeah, we should throw the book at them. Hard.
If so, how do you enforce that against what might be demonstrably misaligned/colluding/rogue leadership?