American pop star Selena Gomez is being sued in federal court by several investors in her mental health startup Wondermind over allegations of fraud.
Five investors filed the lawsuit claiming they were misled into investing $1.2 million in 2022 after being promised that the company would launch an innovative app and sign lucrative advertising deals.
Gomez co-founded Wondermind in 2021, serving as chief impact officer and head of marketing for the multimedia platform. The company was launched to provide practical daily mental health resources for users, inviting visitors to subscribe to a newsletter on its official website.
The plaintiffs state that they expected Gomez to leverage her massive global fame and social media presence to promote the business. However, the complaint alleges that for three years, while the company quietly collapsed, none of the founders or executives communicated with the investors.
Allegations of misleading promises
According to the lawsuit, Wondermind claimed a valuation of $95 million in 2022. At the time, investors were allegedly led to believe that the company was preparing corporate partnerships with major institutions, including JPMorgan, as well as celebrity features and advertising agreements.
The lawsuit alleges that these proposed partnerships did not exist, the planned initiatives never materialized, and the advertised application was never created.
The legal action also names Gomez's mother and co-chief executive Mandy Teefey, along with former business partner Daniella Pierson, as co-defendants. Together, Gomez, Teefey, and Pierson held nearly 90 percent of the shares in Wondermind.
Internal conflicts and misspent funds
All three executives face charges of securities fraud, common law fraud, breach of contract, and other counts. The plaintiffs are seeking to recover their original investments alongside compensatory damages and legal fees, CNN reported.
Investors reportedly learned about the company's financial distress after media outlet The Cut published an article last year detailing internal power struggles. The lawsuit relies heavily on that report, alleging that Gomez failed to fulfill her contractual obligations because of ongoing personal conflicts with her mother.
The filing further states that Teefey informed investors that Pierson had used investor money to help pay for her personal rent in New York City, which totaled roughly $60,000 per month. Pierson subsequently departed Wondermind in 2023.
In a statement cited by CNN, Pierson denied all allegations against her, specifically denying that she used investor funds for personal expenses. She added that she welcomes the opportunity to present financial records and concrete documentation in court to prove the facts.
