I think that you should not interfere in someone else' personal life. But since your own wife is involved in the matter, you must discuss the matter with her.
In such a conversation, try to understand the opinion of all the parties involved- your wife, her friend and further the opinion of the husband (friend's spouse).
Analyse if your wife is giving a wrong advice to her friend. And, correct her on that.
If tomorrow any mishappening would take place, somewhere her friend can blame your wife for that matter.
Ask your wife to call up her friend at your home and then you all can have a conversation on this, provided you share a friendly and a close equation with your wife's friend.
You have the right to be a part of this matter as your wife too is involved in it.
And you, on your part, try to give a fair opinion. Do not impose your suggestions but share it so that both your wife and her friend can have a second thought before they overstep any boundaries.
It's very sinful to cheat on someone. Make your wife realize that she shouldn't put herself into a mess. Rather, try to help her friend to take the right decision keeping in mind the sensitivity of the situation.