[startupethics]

I'd be willing to risk lawsuit, if there is an official channel in the incubator to report ethics violations. And a general practice by the incubator to keep such reports and investigations relatively confidential. I think this would make risk/reward ratio to be good enough for me.

I don't know, if there is value for incubators to spend resources on that mechanism (maybe wealthier in a long term, if nerds could keep their lunch money? as per http://www.paulgraham.com/wealth.html ).

If there is no such established mechanism, I don't think risk/reward of reporting ethics violations is good enough. Precisely because the most likely outcome is being sued into a small ball of carbon.