What is the etiquette for improper sparring?

Take him aside and let him know he's going too far. Frankly, if it's a problem, the sensei should be the one saying something. In fact, I'd approach your sensei first. But if he starts going all out with you, let him know that you can give as good as you get.

Confront him yourself. If he argues, remind him you are of higher rank, and he should listen and make him aware you are going to make a complaint against him. (No "Straiten up or I make a complaint." It's "I am making a complaint against you. This is just a head's up.")

As a senior student, you should have the leverage to make a complaint against him to the head instructor and have it taken seriously. I don't recommend hurting him back (at least not while you have other options), because likely that will result in you facing a lawsuit if not charges for assault. (But I do understand how it could be tempting.) I wouldn't wait for the instructor to notice and reprimand him.

I would also speak with other senior students as well before making the official complaint. See if they noticed the same thing. If someone hasn't noticed, don't try to persuade them into saying they saw something they didn't. Stick with what they have observed. You'll probably find you're not the only one concerned about this. Ask them to come with you to make the complaint.

If the school does nothing, threaten to tell the kid's parents, with full intent to carry it out if things are not dealt with. Once parents realize this guy is beating up on their kids and the school doesn't intend to do anything, they'll start pulling them out, and they will talk and tell anyone else who's thinking about joining martial arts.

Lastly follow up. The head instructor doesn't have to disclose all details about what actions he took, but he should have at least done something. I would personally ask the man to leave. The last thing we need is a whole new generation thinking martial artists are nothing more than bullies. But this jerk's punishment will be determined by the head instructor. If he's not expelled, then keep observing him, and make sure whatever lesson he got sticks.

If the lesson doesn't stick, and school won't throw him out, this will be the only time I say this. But I think it's more than justified because you have done everything you could. Knock the bastard out cold if he starts beating a child up. Be careful not to lose control and avoid causing permanent damage. Just knock him out. And when he comes to, make sure he knows why. Usually people like him need to realize they are not the tough men.

I would have to ask why in the world a 40 year old student is training with kids to begin with? Any dojo, in my opinion, that puts adults and kids together in a class is a mcdojo. Secondly if the Sensei has not reprimanded him yet then it is definitely a mcdojo. The 40 year old should not be sparring kids anyway.

nwohioguy and I are one the same page on this one. I will only add this. If this is going on, why don't you speak to the head instructor about this. If he is OK with an adult sparring with children and knocking them around, then you might want to think about finding another school to train at. If this continues, someone is going to get seriously injured. Then there will be law suits to follow.

I wouldn't break his knee lol. leave that to the head instructor.

I cannot speak for your sensei but I would turn a blind eye if you decided to spar this guy without pads, after class away from the kids. (not beat him up/ send him to the hospital but bloody his face a little) that is assuming he is lower in rank and you are high up- you can spar with control in high intensity)

Not saying I condone what he is doing but let me play Devil's advocate. when I go to a school I tell the instructor "if I drop my hands nail me, if you see an opening take me down" because I want realistic training. If a kid faces a situation where he has to defend against an adult he wants to be prepared for it and not have it come as a shock when some pervert isn't as gentle with him as his classmates were in the dojo. What is the guy's attitude like at other times? Find out if the kid or the parents have asked the instructor for more realistic training.

who ever is in charge of the sparring sessions should stop this person from doing this, or talk to him yourself and tell him what he is doing is wrong he should help teach the younger people not pelt them and if that doesn't work you could always go full force with him and give him a taste of his own medicine

Where is the instructor? Tell Him.

If nothing happens, tell the owner.

If it's the same person, bring other concerned parents and students and just tell him that it's you or the Dork.

You could kick his ***, but it won't help if the instructor / owner is a spineless or clueless twit.