Carew was fined after he was spotted in a gentleman’s club last week just before the important Uefa Cup clash with Ajax on Thursday.
“John has been disciplined, he has breached the rules,” said O’Neill.
“He thinks there were mitigating circumstances and I am always prepared to listen, but I did and made a decision that he was wrong.
“It’s not a problem, he’s been pretty heavily fined and that’s the end of the issue.
“I’ve talked to him about it and about our age gap – and how I wish I was that age again myself.
“John assures me that it won’t happen again. I believe him. He might be questioning the size of the fine, but the players think it should be doubled!
“I used to do it myself – not in lap-dancing clubs. They weren’t called that in my day.”