Gomez denies fraud allegations in mental health startup lawsuit

Selena Gomez is forcefully refuting accusations that she misled investors in her mental health startup Wondermind, just two days after backers filed a federal lawsuit alleging securities fraud. On Saturday, an attorney for the pop star, entrepreneur, and Only Murders in the Building actor denied that Gomez and Wondermind made false promises to investors who put $1.2 million into the company. “The allegations that Selena Gomez engaged in any way whatsoever in any purported ‘fraud’ or other wrongdoing are completely meritless, both factually and legally,” litigator Mathew S. Rosengart told People magazine. “We will vigorously defend these false allegations and indeed are filing a motion to dismiss the baseless claims against her.”

The lawsuit was filed Thursday in U.S. District Court in Delaware by the investment groups Wondermind SRS 44 and Bespoke Wondermind SPV. The plaintiffs accuse the defendants of securities fraud, common-law fraud, breach of contract, and other claims. They are suing to recover their entire $1.2 million investment, plus damages and legal fees. The suit alleges that the startup’s three principals—Gomez, 34; her mother, Mandy Teefey, 50; and former business partner Daniella Pierson, 31—“falsely represented” that Wondermind had “the infrastructure, leadership, and resources necessary for the company to launch into a profitable, one-of-its-kind mental health and wellness platform.” The plaintiffs claim Wondermind overstated Teefey’s leadership ability, Pierson’s business acumen, and Gomez’s “intimate involvement” in developing and promoting the business with initiatives that were supposed to include corporate partnerships with J.P. Morgan and Fidelity, advertising deals, and a “new” mobile app.

“The partnerships did not exist,” the lawsuit says. “The initiatives never materialized. The app was never built. And 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.” Their concern grew last September when a story questioning Wondermind’s shaky leadership, financial health, and “state of utter disarray” appeared on New York magazine’s website, The Cut. In May, Forbes said Wondermind failed to pay its vendors and 15 employees in March and soon laid off all but four of its staff members. People later reported that a source pushed back on those allegations. “Selena has invested millions of dollars over the years into Wondermind to support her mother and their shared passion for mental health, including when she was alerted about the most recent financial setback,” the anonymous person was quoted as saying. Gomez “immediately invested more money,” the source added, while her mother chose “to take the lead with a personal loan to invest in the future of the company.”

Co-founder denies misuse of funds, mother silent on the matter

Teefey has not commented on the lawsuit. Pierson, who served as co-chief executive with Teefey until leaving the company in 2023, told The New York Times that she “categorically denies the allegations,” including charges that she spent investor funds on personal expenses. Pierson said she “welcomes the opportunity to present concrete documentation and financial records that establish the facts.” Wondermind was launched in 2021 by Gomez, Teefey, and Pierson as a mental health-focused media and wellness company aimed at helping users improve their “mental fitness.” The company drew swift, significant attention because of Gomez’s involvement and her massive social media following. Its three leaders, seeking a $5 million investment, reportedly told potential investors during the first round of funding that it had an initial valuation of $95 million, according to the Times. It could eventually reach more than $4 billion, they said.