You are correct - the ruling was wrong.
It was the SBs responsibility to watch the action and say that he didn't check right away. Once the THIRD player checks (The guy after the BB), at that point, it's too late. CERTAINLY by the time 5 players check, it's too late.
At least that how I would have ruled if I was the floor. I mean, what if player 4 bet and player 5 raised? Would he still be able to say, "No no, I didn't check. I want to bet." And then what happens top Player 4 and 5s money?
That's just ridiculous. Bad ruling.
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