I have 2 teams in Dark (one D2, one D3) and it's never even crossed my mind to share FSS information.  If they were to ban this, all it would do is keep people quiet about it...and those are the ones that are more likely to do the cheating.  

5 teams in 1 division definitely feels like too much.  But if he is cheating, then he's the stupidest cheater ever for letting it be known he has that many teams.  He'll obviously have more scrutiny because of it.

A good way to end or limit this would be to have each school have to hire a scouting director , and have some randomization.  As it seems right now you pretty much  know what you going to get.  with having to hire a scouting director some would be better then others, and there would always be a chance that a recruit is not as good as you think he is, or better.   If you also add in some randomization where its possable for a walk-on to grow into a super-star or for that can't miss prospect to miss,  it would make it harder to cheat.

forget my last post, while I think it would make the game more enjoyable, there would still be loop-holes for people to take advantage of.