“However, we have learned that one may not act on hearsay, which would mean that one cannot possibly offer reproof unless he personally witnessed the transgression. Consequently, it would be one’s responsibility to find an effective means of reproving himself, or to ask the rav to either personally investigate the situation or tactfully discuss the matter with that individual without making accusations. (Chofetz Chaim, A Lesson A Day by Rav Shimon Finkelman & Rav Yitzchak Berkowitz, Day 53)”.
It seems to me that according to this, perhaps you would only have been allowed to “discuss the matter with that individual without making accusations.” Even though you witnessed the action, it was not a bad action without the information that you were not permitted to accept. So it would seem that you were not really a first-hand witness.
I am not clear on what exactly you did – I am not sure if you spoke to him privately or embarrassed him publicly. It seems to me that embarrassing him publicly could possibly have been a problem. And even speaking to him privately might have been a problem if it took the form of an accusation.
Again, I don’t know what the halacha is; I am just pointing out the possible arguments for saying that it was a problem. I would like to hear what you think.