The referee allowed this to stand. Should he have done so? If so, why? If not, why not?
Answer (June 4, 2014):
I was asked this question twice and answered the first one from the Laws, based on how the referee perceived the incident.
INTERPRETATION OF THE LAWS OF THE GAME AND GUIDELINES FOR REFEREES
LAW 14 – THE PENALTY KICK
Feinting in the run-up to take a penalty kick to confuse opponents is permitted as part of football. However, feinting to kick the ball once the player has completed his run-up is considered an infringement of Law 14 and an act of unsporting behavior for which the player must be cautioned.
The second time I decided to suggest something more commonsense, an idea supplied by a friend in Eastern New York (and I quote directly):
“as soon as that player goes down, my whistle sounds…
‘the player fell…so you have to go and check on his welfare…cause you know he might have hurt something…and since it’s clearly an attempt to deceive I might have a word with him about it in the process…”
A final comment: Whatever works for your personality as a referee and conforms with the Laws is always the best thing to do.