Selena Gomez and her mental health company accused of fraud
Several investors in Wondermind, a mental health startup co-owned by Selena Gomez, filed a lawsuit against the American pop star on Thursday, alleging they were misled about the company’s success and the extent of her actual involvement.
Launched in 2021, the company listed Gomez as a founding partner, “Chief Impact Officer,” and head of marketing, according to the complaint. The media platform was designed to provide users with “easy, practical ways to prioritize mental health daily,” according to its website, while directing visitors to subscribe to a newsletter.
Five investors stated in the lawsuit that they invested $1.2 million in 2022, expecting Gomez to leverage her widespread fame and massive social media following to grow the company.
Instead, the complaint alleges that “over the course of three years, while the company quietly crumbled around them, none of its founders, executives, or board members said a word to the investors whose money was funding this collapse.”
The lawsuit also names Mandy Teefey, Gomez’s mother and co-chief executive officer, and their former business partner, Danielle Pearson. The defendants face allegations of securities fraud, common law fraud, breach of contract, and other claims, as the plaintiffs seek to recover their investments, along with monetary damages and legal fees.
The company announced a valuation of $95 million in 2022, a period during which investors were allegedly misled about the existence of corporate partnerships with major firms such as JPMorgan, as well as “advertising deals, magazine cover features, and a pioneering, innovative app,” according to the complaint.
Investors claimed that “there were no partnerships, the initiatives never saw the light of day, and the app was never developed in the first place.”
Investors learned of the company’s troubles through a controversial article published last year on The Cut, which revealed internal conflicts over power and personal relationships.
The lawsuit further alleged that Gomez, Teefey, and Pearson collectively owned approximately 90% of the company’s shares, and that Teefey informed investors that Pearson had used investor funds, according to the allegations in the complaint, to help pay for her New York City apartment rent, which amounted to approximately $60,000 per month. Pearson left Wondermind in 2023.
