As a mother of 2 one of each sex, i would keep my daughter away from the boy, he is 10 and she is 4? if he isnt related is there a need for the contact? if its because you want your 4yr old to play with other children and to interact why not try a controlled enviroment like playgroups or childcare??? You have seen the warning signs dont let it get to the stage where your daughter will be in danger stop it NOW!!!!!.
That boy has a problem. How did his mother react? What did she say. Is she going to take any action towards her son? As far as I can tell you have done all you can do for now, assuming it is the first time. The second time it happens you should bring social services, but warn the boy's mother. Maybe she will then take corrective action. But deffinately the third time, bring in the law. Then of course your daughter needs to be counseled either by you or a counslor. which ever you think will do. She needs to be told that she shouldn't let anyone but a doctor touch her there. The boy's behavior is somewhat normal, but it seems he can't stop. How did your daughter take it?