I have a student that occasionally when he's told no or if he's bored he will pull his pants down during class. It's gotten to the point he will take his penis out and play with it during circle time.
Contact the parents. The child needs early intervention and a behavioral management plan made.
The parents do need to contacted.
The child needa to be monitored and watched.
Explain the student what is right and wrong, yet set up a system in which they wont do that again.
The parents do need to be involved, and administration contacted.