Opponent caught sneeking a peek what supposed to happen now?

[arod15]

Just curious as to what the offical rule is.
Last week while at the foxwoods this situation occured.
After I had folded my hand, the opponent to my left showed me his hand as he was about to muck.

What we didnt know was that the player to his left purposly looked over his shoulder and saw the cards.
When asked he at first denied it altogther, but after badgering by the dealer he admitted seeing the cards.
The dealer than warned him and showed the table the mucked cards.

At first I did not care what happened but the more I think about it the more I believe further action should have taken place.

Thoughts? Let's discuss...

Thanks in advance