Creative problem for you to solve!

My friend has a H1B valid from 2009 till 2012. He has been paid bi-weekly since 2009. He just get a call today from IPO told him "sorry, we made a mistake last year and cancelled you H1B ...we will get it back for you" However, my friend has been working and paid until the end of May! Can my friend transfer his H1B to a new company where he just get a job offer? How should this IPO or school get punished for their "mistake"? Is it true that IPO could cancel the H1B when my friend was still in employment? THANKS!