It would be better to notify the member that was banned IMHO. Letting the "reporters" know aids in giving them the satisfaction that they have the power to get rid of someone they don't like.
Reminds me of my high school days....
Letting the banned member know would be better.
Also, is the member banned from the forum for good or can they do something to redeem themselves?
I don't like the "lynch mob" mentality it might create (envisions members getting together vie t-mail to gang up on someone to get them banned) and the poor people that actually like that member wondering what happened to them.