My friend wants to sell a second hand helmet, I strongly dissagree, am I correct? My friend has recently purchased a new bike. The guy who sold it to him was clearly giving up the sport, so he gave to said friend his helmet as well (MET parachute for MTB).

As my friend already had a functioning helmet, he is now trying to sell the second one (within our rough group of people with whom we ride primarily). Now I personally believe it is just morally wrong to do this as he cannot know what the helmet has lived through, although it appears to be free of dents and has few scratches.

So am I being silly or is it just wrong to sell a second hand bicycle helmet? 

Note: He sells the helmet he was given with the bike.
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.