Unfortunately, most of the time, this gets swept under the rug. This way, at least that background check will actually reveal information once the relevant data is collected.
Imagine the havoc that could be caused by a publicly shamed VC with a board seat and a 10% chunk of the company. And, as we learned from the tale of Peter Thiel and Gawker, one of the advantages of being a billionaire is you can afford to squander millions of dollars on petty vengeance.
Two reports triggering an exclusion from YC demos and rounds would be a strong incentive. But one report leading to an inquiry from YC might prevent incidents in the future, too, for fear of losing a key deal flow.
This is what a hostile environment looks like, guys.