I wouldn't blame only the wife! I would certainly talk to her and ask her how it makes her feel.She may just be afraid to go off on the brother in fear of being the cause of a ruined relationship between yall. You should let her know that it's not ok and you should give her the ok to tell him to hit the road. If she doesn't then there's a problem. It would be best if she is the one who tells him to stop though. I still think you should have a little chat with the both of them seperately just to make sure everyone understands. If he keeps on, I'd definitely distance myself from him.
I have a twin sister and she used to do things to get attention from my partner and it is very hurtful. I also have an older sister who certainly doesn't care to go out of her way to try and get attention from my partner. It's so wrong and I would never, no matter what allow anything like that to go on between myself and my sister's men. I believe in keeping to yourself. There is no reason for hitting on or allowing people to hit on you when you're with someone. A line must be drawn.