/kəˈluʒən/ Show Spelled Pronunciation [kuh-loo-zhuhn] Show IPA Pronunciation
1. a secret agreement, esp. for fraudulent or treacherous purposes; conspiracy: Some of his employees were acting in collusion to rob him.
2. Law. a secret understanding between two or more persons to gain something illegally, to defraud another of his or her rights, or to appear as adversaries though in agreement: collusion of husband and wife to obtain a divorce.
You're circumventing the rules (trade deadline), secretly (I presume), to gain something (a new player). You do the math.
If there are no rules preventing this, then it seems perfectly fine. To me it's yet another reason to not have FCFS add/drops. In my main league you get wed night and sat night to make waiver claims and that's it. So if this happened in my league, everybody will have a fair shot at bidding on the dropped players in question.