OK well your friend just got taken. Rearing is a very difficult vice to correct.
First thing you have to determine is why is he rearing. Is it fear, habit, discomfort or a bad attitude, etc.. Then from there you can start treating it. If it's out of discomfort that he's rearing then get the vet out to give him a good look over and get the chiro and saddle fitter out to evaluate him and his saddle fit. Then start doing a lot of groundwork and work on getting the pony to trust and respect you. When he rears he has to understand that it's unacceptable. When a horse rears, he is exposing his most venerable areas, the jugular and his stomach. To deter rearing, when he does it growl and "attack" his stomach. When he comes down, praise him for having all four feet on the ground and then continue your ground work.
I would not be putting a 3 year old on the pony until he is no longer rearing, ever. And still I would make sure the child always has a helmet on and is always under direct supervision by an adult to pull the kid off/catch it when/if the pony rears.