My friend wants to sell a second hand helmet, I strongly dissagree, am I correct?
I personally would not sell or give away a bike helmet that is not brand new, kept in its packaging or is guaranteed to be unused and undamaged.

Bike helmets protect the head in a collision by absorbing energy and breaking down. Any prior damage takes away from the ability to absorb energy. It's impossible to truly know what damage a used helmet has sustained, therefore, you should not use such a helmet yourself nor pass on a helmet on to anyone else because you have no idea how it will perform in a crash. Yes, you can inspect the helmet for marks on the shell that would indicate if the helmet has taken any impacts, but it's not reliable enough, IMHO.

However, if your friend fully discloses how he got the helmet and that its history is unknown then he is acting ethically, because your friends can decide to take the risk or not.