Is interesting that even a football sim game is not immune from a Patriots-like cheating scandal. I mean realism for reals and stuff :D
Bummer that the ability to change position has to get limited but I can't think of a better solution to try and deter this type of thing (especially now that everyone is aware of the exploit now). I think changing players to a new position is kind of a fun thing.
I believe they already froze his alternate accounts (unless I read that incorrectly). I think the most fair thing to do is to reverse the transactions given that the feeder/farm teams were robbed of players that they should rightly still control - so when they become AI controlled/available for new owners, they will be more hosed than they should be not to mention any salary cap shenanigans. Having said that, given the number of leagues involved it could be a bit of a chore to review and implement.
I'm not crazy about cutting the good players - I think that only benefits a different team. Its tough to punish DarkRogue's teams that benefitted from these trades given that he could just abandon those teams and then the punishment only impacts whoever takes those teams over.
Tough call on how to proceed but yeah if the trades/roster moves can be reversed, I think that is the most fair option. Just a matter of whether that is feasible.