Several investors have filed a lawsuit against Selena Gomez and other leaders of her mental health startup Wondermind, alleging they were misled about the company’s performance and the singer’s involvement in the business.
Wondermind was launched in 2021 as a mental fitness media platform offering users “easy, doable ways to put your mental fitness first every day.” According to the lawsuit filed on Thursday, Gomez was identified as a co-founder, “chief impact officer,” and head of marketing.
The five plaintiffs invested a combined $1.2 million in the company in 2022. They said they expected Gomez to use her global profile and extensive social media reach to help expand the platform and attract a large audience.
However, the lawsuit claims the investors were not informed as Wondermind’s financial position deteriorated.
“For three years, while the Company quietly collapsed around them, not one of its founders, officers, or directors said a word to the investors whose money was funding the collapse,” the lawsuit alleged.
Gomez’s mother and Wondermind co-chief executive Mandy Teefey was also named as a defendant, alongside former business partner Daniella Pierson. The case includes allegations of securities fraud, common law fraud and breach of contract, among other claims.
The plaintiffs are seeking the return of their investments, as well as additional damages and legal fees.
Wondermind was reportedly valued at $95 million in 2022. Investors allege they were presented with plans for corporate partnerships involving companies such as JPMorgan, along with advertising agreements, celebrity cover stories and the development of a new app.
“The partnerships did not exist. The initiatives never materialized. The app was never built,” the investors alleged.
According to the complaint, investors only became aware of Wondermind’s difficulties after The Cut published an investigation last year detailing internal power struggles and strained relationships within the company.
The lawsuit draws heavily on that report and alleges Gomez failed to meet her contractual responsibilities because of “her long-running personal struggles with her mother.”
Gomez, Teefey and Pierson together controlled nearly 90% of Wondermind’s shares, according to the lawsuit.
The filing also alleges Teefey told investors that Pierson had used company funds to help cover rent on her New York City home, reportedly costing about $60,000 per month. Pierson departed Wondermind in 2023.
Pierson rejected the accusations in a statement issued Thursday, saying she “denies the allegations against her and welcomes the opportunity to present concrete documentation and financial records that establish the facts.”
She also denied using investor money to pay for personal expenses.
