The video, posted in June, told viewers that "f***ing Jews" were tracking people’s smartphones and purported to show them how to disable potential tracking devices – which, it alleged, were monitoring their photographs.
The Charity Commission ordered the post to be removed and opened a compliance case on the charity in July, which revealed what the commission described as "governance failings" when it reported back in September with an action plan.
In a statement released today, a commission spokesman said: "The action plan required the trustees to complete certain actions within specified timeframes.
"The trustees failed to comply to the commission’s satisfaction with one of the actions required, nor did they comply with the requirement to report completed actions to the commission within specified timeframes.
"Consequently, the commission opened an inquiry into the charity on 18 November."
The inquiry will look into the administration, governance and management by trustees and the financial controls in place, as well as the conduct of trustees and whether they had fulfilled their duties under charity law.
On Monday, the commission issued the charity with a legal direction to complete a number of specified actions to address the commission’s concerns, although it did not make public any further detail as to what these actions were.
The commission had also reported the Facebook video to the police, the spokesman said in a statement. The video has since been removed.
The inquiry has been welcomed by the charity Campaign Against Antisemitism, which submitted a complaint to the commission about the video.
Gideon Falter, chair of Campaign Against Antisemitism, said: "When charities engage in inciting hatred, it is vital that the firmest regulatory action is taken, and we are very pleased to note the Charity Commission’s decision to use powers reserved for the most serious concerns in dealing with this vile antisemitic incident.
Ghulam Mustafa, a trustee at the charity, said the same people would continue to run the charity, but declined to comment further.