Is it not possible to 1. Fix the problem and 2. Launch a full scale investigation to ban all those who are gaining massive levels all at once?
It's difficult to believe that something that blatant wouldn't show up in a log SOMEWHERE.
Unfortunately it might not be possible to fix the problem in any sort of reasonable timeframe. If, as I suspect, the client has most of the control in this game, then fixing the problem isn't as simple as patching a couple lines of code. It would involve an overhaul of the client-server relationship. Besides the fact that something on that scale takes a long time, SE may not have the infrastructure necessary to put MORE demand on their servers. We've already seen what happens when their servers are overloaded, and that's under current conditions.
Basically it sounds like they've gone from one extreme to the other. At 1.0's launch, the server was responsible for signing off on EVERYTHING, including menu navigation. It seems that now we've shifted to the other extreme where it does almost nothing to verify that what the client is telling it is legit.
It's possible to fix this, but I'm not sure it can be done in a reasonable amount of time on a live product. I honestly don't know what they should do from here, and I'm not sure they do either.