This will probably sound very alarmist.
Personally, I would not continue to communicate with the school until contacting a psychologist and, based on what the psychologist has to say, possibly a lawyer.
Maybe I am just too steamed by your story, but I don't understand how a teacher can get away with traumatizing a child this way (or any way). I am talking about having some validation and force behind requesting to get this teacher either the proper training or removed from the profession, I am not talking about a lawsuit.
On the bright side, kids are extremely resilient and with the proper re-enforcement I am sure he will bounce back to his old self. I just hate thinking of him actually crying over this terrible teacher's negative attitude about learning.
