Everybody saying "lawyer", ignore, that's expensive and bad advice, you already know what the lawyer is going to say, lawyers are incredibly cautious and not particularly flexible or business savvy in helping you, all you'll get is a bill and no help with anything except what you already know couched in terms of a lot of statements designed for future "I told you so"s
Fire: probably, but not because this infraction was so bad or impossible to deal with (the victim herself said so) but because the guy appears to be a bad egg, just really bad judgement and other employees or customers might not be as adept as she is at dealing with it. So, unless his contract somehow protects him, or he is God's Gift to Business Development and your company is down the tubes without him (in which case you'll still need to figure out a way to head-off/handle his future infractions (promote her above him?)), you don't need to spend more time dealing with this.