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Snapnames.com

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I bought a domain at the snapnames extended auction last week. They received payment for it and the name was transferred to my account with them.

Today, they sent me an email stating "Your .COM Domain Name has been moved to another Customer. You will no longer be able to Manage this Order from your Control Panel."

When I sent them an email asking why, the answer was "My apologies that I must inform you that your purchase of (domain) must be unwound. We have refunded your account in the amount of (purchase price) and transferred the domain back to the seller. This was a mistake of ours as the seller had opted out of this auction prior to it starting. Our apologies for any inconvenience that this may of caused."

The domain is valuable and I bought it at a good price. Does anyone know if snapnames.com had the legal right to do this?
 
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