Selena Gomez mental health startup sued alleging fraud

• Selena Gomez sued over Wondermind startup.
• Investors allege fraud and breach of contract.
• Lawsuit claims promised deals never materialized.
• Investors cite internal turmoil at company.

Pop star Selena Gomez, her mother Mandy Teefey, and former business partner Daniella Pierson are facing a federal lawsuit after investors accused them of fraud, breach of contract, and misleading backers regarding the success and operation of their mental health startup, Wondermind.

The media platform launched in 2021 with Gomez listed as co-founder, "chief impact officer," and head of marketing, while Teefey served as co-chief executive officer. Designed to offer users "easy, doable ways to put your mental fitness first every day," the platform's website directed visitors to sign up for a newsletter.

In 2022, five investors put $1.2 million into the venture, expecting Gomez to leverage her star power and massive social media following to build up the company. However, the lawsuit alleges that the company hid its decline for years while continuing to utilize investor funds.

"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.

Failed initiatives, unbuilt app, and unfulfilled corporate deals

When seeking investment in 2022, Wondermind claimed a $95 million valuation. According to the lawsuit, investors were led to believe that corporate partnerships with major institutions like JPMorgan were underway, alongside planned "advertising deals, celebrity cover stories, and a groundbreaking app".

None of these projections ever came to fruition.

"The partnerships did not exist. The initiatives never materialized. The app was never built," the investors alleged in the complaint.
The suit claims that Gomez, Teefey, and Pierson collectively owned almost 90% of the company's shares.

Exposé reveals internal turmoil, financial misuse claims, and legal responses

Investors reportedly only learned about Wondermind's internal demise through an explosive article published by The Cut last year, which outlined operational failures, power struggles, and relationship conflicts within the company.

The article forms a major foundation for the lawsuit, which cites the reporting in asserting that Gomez failed to fulfill her contractual obligations due to "her long-running personal struggles with her mother".

The filing also details accusations between the co-founders. According to the lawsuit, Teefey told investors that former business partner Daniella Pierson—who departed Wondermind in 2023—used investor funds to pay for her personal rent in New York City, which amounted to approximately $60,000 per month.

In a statement released Thursday, Pierson strongly disputed the allegations:

"Denies the allegations against her and welcomes the opportunity to present concrete documentation and financial records that establish the facts," Pierson stated, adding that she never used investor funds for personal expenses.

Gomez, Teefey, and representatives for Wondermind did not immediately return requests for comment. The plaintiffs are seeking to recoup their original investments in addition to damages and attorney's fees.