Is it legal for an employer to rollover a 401K account without written or verbal consent from the employee?

In short: yes. Their possible alternative was just to mail you a check but, if you did not get the money back into an IRA (or other qualified vehicle) in time (usually 60 days), you'd get taxed on the money as a distribution (regular tax rates). Plus, if you're under 59.5 years old, you'd get penalized for an early withdrawal. (There are many exceptions to what I just wrote, this is the "short" answer.) Recently, pension administrators have decided the "friendlier" course of action is to put the money in an IRA for the (ex-)employee so they don't run into the bad consequences above. This is usually a cost-free IRA so it is hard to see how the employee is damaged. With all due respect to you, this is usually done after several unanswered letters to have (ex-)employee do the transfer him or herself. (You may not have gotten these communications.)

You may be angry that the money was in a fund that went up and it was converted to cash for the transfer so you missed out on the upswing. It may not have been possible to transfer the fund to the new IRA. In all events, it would not have been possible for you to remain in the 401k for several reasons (including the actual dissolution of the plan).

So how have you been damaged? It sounds to me like they were trying to protect your interests as best they could given the dissolution. Your privacy has not been invaded -- the employer knew your balance anyway and the new IRA custodian is legally bound not to disclose your balance, etc. If unhappy with the new custodian, just transfer the money -- it usually takes about a week and is free.

This is not legal advice, it is just a general comment on an interesting (factually incomplete) scenario. No attorney/client privilege is sought or established. If you wish a more complete answer, please consult a pension specialist, be they an attorney, accountant or investment advisor.