I have an older friend who is crushing on my baby sister! Idk what to do?

I lost my mom 2 years ago to cancer but before that even happened I took on the responsibility of her and my sister who was only 15 at the time. We are 8 years apart. I met this guy who was pretty cool before my mom even ped. Around the same time I met another guy who I'm about to marry in June. The 1st guy me and him were always just really good friends. Nothing more. I always acted like my sister was my kid. Even when she was 1 and I was 9 I felt that way and acted like I was the "mom". So now as an adult it only comes naturally. Nigher of us had a dad so It was all on me when Mom died. So I depended on my friends *due to lack of family* for support. If one got me something, I'd ask for something for my sister or I'd get her something. (like food) My friend, he always got me and my sister something. Then me and my soon to be husband got really close. He moved in and was taking care of us. My friend was out of the picture for about 9 months then came back. (He lived far away but moved close to us) He got a teaching job at the middle school here and I have set him and my fiancee up to room together. We did a lot of "family" stuff together, the 4 of us. And sometimes with other friends. Even spent holidays together. Well.. It started before Christmas. My friend, right before we came home from the bar (my sister at home asleep) he tells me he has always dreamed about cuddling with my sister. Nothing ual just cuddling. - His exact words. He was a lil messed up but I had sensed a lil crush going on and I told him straight up, even if my sister was his age, she wouldn't give him the time of day. He said ya.. and then it was droped. On Christmas, he went crazy and bought my sister almost everything she asked for, except for a new car. I am the spoiling type of parent. I want my kids to get what they want.. ofc if they deserve it. So I didn't get upset or anything but in the back of my head I was worried about what was to come of all of this. Then New years comes around and we decided to stay home and invite friends over. We did that, and I've never put my sister in an unsafe environment. She had one of her girl friends spend the night to bring in the new year with, on top of that the rest of my friends are like me, very over protective... so I thought nothing would happen. I guess while everyone was sleeping my friend laid down beside my sister and like caressed her back or something. She said he didn't touch her nono spots. Because we were all sleeping in the same room, my sister told me I had moved or something and he jumped up and ran to the bath room. Since then I've not really hung out with him but once, and that was recently. I wanted to punch him in the face, or talk to him. Tell him that its wrong and she isn't grown although she will be 18 in July she is still a junior in high school and he is a teacher for Gods sake! But I can't say nothing because he is rooming with my fiancee and he will cause a lot of problems. He hasn't seen my sister since New years. Not thinking tho, my sister changed her status on face book saying she is engaged to her b/f who don't even live here. My friend got mad and is acting like they broke up or something. He is 28. She is 17.. 18 in July. She is my Maid of Honor, and he is one of his Grooms men. Idk what to do. :( I hate that he is acting like this cuz I'll always have my sisters back. He keeps sending my sister emails and stuff and the last one said.. "You prob don't care but I'm moving to Fl this summer." and wen he found out about her and her b/fs fake "engagement" he wrote her again and was really shitty with her. What would you do if you were me?