Is it OK to say what you have?

[Jack10]

The other day I was playing in an annual home game tournament where you need to get as many points as you can in the first two games in order to make it to the final 6 person table. Early on in the second game, when no one is guaranteed a spot yet, the following hand came up:

About 6 people see the flop:
6 [img]/images/graemlins/spade.gif[/img]8 [img]/images/graemlins/diamond.gif[/img]9 [img]/images/graemlins/spade.gif[/img]

UTG bets, UTG+1 raises, 2 folds, MP calls, and CO goes all in. After the action gets back to the raiser, CO, who is the defending champion, and who will be knocked out of contention if he gets called an loses, says "Everyone fold, please, I have the best hand and I'll show. I don't want to get knocked out. Fold your flush draws" Most of us know him and believe him so everyone folds, including K and s [img]/images/graemlins/spade.gif[/img]Q [img]/images/graemlins/spade.gif[/img] and a top two pair hand, face up. CO then turns over 5 [img]/images/graemlins/diamond.gif[/img]7 [img]/images/graemlins/club.gif[/img] for the best hand, and gladly rakes in the pot.

I would really like to know for future reference how this type of thing is looked at ethics wise. Please choose one. Any comments would be helpful. Thanks.