All perfect praise be to Allah, the Lord of the worlds. I testify that there is none worthy of worship except Allah and that Muhammad, sallallahu ʻalayhi wa sallam, is His slave and Messenger.
If this young man had an illegitimate affair with a woman and has not repented of this sin, then you did well by refusing to marry him; an unchaste man is not an eligible suitor for a chaste Muslim woman. Allah, the Exalted, says (what means): {The fornicator does not marry except a (female) fornicator or polytheist, and none marries her except a fornicator or a polytheist, and that has been made unlawful to the believers.} [Quran 24:3] The religious commitment and character of such a man are not acceptable according to the hadith which reads, “When someone whose religion and character you are pleased with proposes to you, then accept his proposal.”
Nevertheless, you have committed a plain error by advising him to marry your friend. The Prophet, sallallahu ʻalayhi wa sallam, said, “None of you truly believes until he loves for his brother what he loves for himself.” [Al-Bukhari and Muslim] By the same token, a believer dislikes for his brother what he dislikes for himself. Your action in this regard contradicts the enjoined offering of sincere advice to fellow Muslims. Tameem Ad-Daari, may Allah be pleased with him, narrated that the Prophet, sallallahu ʻalayhi wa sallam, said, “The religion is (built on) advice.” The people asked, “To whom?” The Prophet, sallallahu ʻalayhi wa sallam, replied, “To Allah, to His Book, to His Messenger, to the leaders of the Muslims, and to their common folk.” [Muslim]
If you know that this young man has repented to Allah, then there is no problem. Assuming that he married her, then it seems – Allah knows best – that you are not obliged to tell her of his sin because she had the chance to ask about him and the like.
You may advise her not to marry him and mention some of his flaws that would urge her to refuse his marriage proposal without saying anything about the adultery, because it may be considered slander.
Ibn Hajar Al-Haytami wrote about the situations wherein backbiting is allowed:
"In principle, backbiting is prohibited; it may be obligatory or allowed in certain cases for a valid purpose that cannot be realized except by it. (He then listed the cases in which backbiting is allowed) ... It also includes pointing out the flaws, even if one was not consulted, of a person who proposes for marriage or who wishes to mix with others for religious or worldly affairs if one knows that that person has a flaw that is ugly and repulsive, such as immorality, religious innovations, greed, or other flaws, like the poverty of the suitor proposing to marry...” [Az-Zawaajir]
He also wrote, “If the addressed person responds to advice simply by telling him 'do not do this' or 'he is not suitable as a husband' or 'there is no good in him for you' or the like, then it is impermissible to disclose his flaws.” [Al-Athkaar] In other words, if the evil is repelled by disclosing some flaws, it is impermissible to disclose all of them.”
Lastly, we would like to point out that this young man should have repented to Allah and concealed his sin instead of disclosing it to others. Please refer to fatwas 84052 and 83573.
Allah knows best.