I don't want any young referees to get confused by this post. Unsporting behavior is not a sending off offense; it is only a caution. Violent conduct is a send off offense, and it is the only option in this case.
Why didn't he get a 2 match ban then? Unsportsmanlike behavious is the vaguest term in the laws of the game. And it is intentionally left this way Pepe did abussive gestures towards Muller which can be a red card. My source is Craciunescu the former chief of the Romanian referees who is up to date to all this stuff a man who goes to all FIFA refereeing convention (or how the hell they are called)
The internet... where people can argue about things that they don't know the answer to, or, well, they could just go find the answer: http://www.fifa.com/mm/document/affederation/administration/50/02/75/discoinhalte.pdf Article 47 defines the seven sending off offences, directly from the LOTG. Article 48 is what you want to look at, though. FIFA divides Violent Conduct into 48.c and 48.d. It's almost like "light violent conduct" and "real violent conduct." Real VC ("assaulting") gets you a 2-game minimum. Anything that doesn't meet that threshold ("unsporting conduct toward an opponent") gets 1-game. I have no idea if the referees make the determination between 48.c and 48.d or if they simply fill out "violent conduct" and then then FIFA makes the determination. I don't think the answer to that part is on the internet! So, in the end, you're both right. He was sent off for Violent Conduct, but he was suspended, per the FIFA Disciplinary Code, for "unsporting conduct toward an opponent."
While vauge and subject to the opinion of the referee, USB can ONLY be a caution. Insulting, abusive, or offensive language or gestures is a separate offense, which is a send-off offense. (But even USB is note entirely openended -- IFAB's Interpretation and Guidelines sets out examples for what it means.)
Sometimes you got to wonder if FIFA is intentionally wanting the controversy. How much of a ref nerd do you have to be to not confuse "unsporting behaviour" and "unsporting conduct"???