I think I gotta go with MerelyC's advice. On this one.
An important thing to remember is you aren't direct;y responsible for the players behavour but you are responsible for your own. Your reaction tells more about you than about the player. I think What MerelyC said is the fair and "Grown up" way of dealing with it.
Wickett also has a point of notusing Game mechnics to solve what is an out of game problem. The character isn't doing anything the player is. If the rest of the players are going along (Which it sounds like the do) you need to let them all know this is not polite, nor respectful or nice to do. Let them know however in nice, polite, and respectful ways otherwise you aren't any better than them. (though there are times not being better is fun but only sometimes
)
I know its tough but an even hand and polite response from you lets you know you did the right thing even if everything goes to crap.
Later
An important thing to remember is you aren't direct;y responsible for the players behavour but you are responsible for your own. Your reaction tells more about you than about the player. I think What MerelyC said is the fair and "Grown up" way of dealing with it.
Wickett also has a point of notusing Game mechnics to solve what is an out of game problem. The character isn't doing anything the player is. If the rest of the players are going along (Which it sounds like the do) you need to let them all know this is not polite, nor respectful or nice to do. Let them know however in nice, polite, and respectful ways otherwise you aren't any better than them. (though there are times not being better is fun but only sometimes

I know its tough but an even hand and polite response from you lets you know you did the right thing even if everything goes to crap.
Later