How do I deal with a little kid who stepped over the line?

This is the last straw with this boy on my street. He is in third grade with the cute little girl I watch in the afternoons. He is just a bratty kid yet his two sisters are not like him. . This past weekend he first got the little girl in trouble out front THEN after he sneaks a peek in the house where she was over her Mother lap getting a spanking with her shorts down (well off)....he teases her outside in front of other kids that she wears diapers. Maybe his sister both wear underpants like him and he finds humor in a girl wearing an actual panty. I want this to stop, what should I do?