I don't think there's something wrong if your best friend is dating your younger sister so long as his intentions are genuine. Perhaps you tend to be so wary about this because as you said, he has a reputation of dating multiple girls. However, I think your sister won't like it if you will stand between them. My advice is that for you to let them be and show them your full support. That way, she will know that she can trust you, and that she can tell anything to you.
As a best friend, I think he also doesn't intend to hurt your sister because he respects both of you. So just believe in them, and have faith that all people can change no matter how complicated their past is.