Selena Gomez sued by investors over alleged fraud involving mental health startup

Selena Gomez and her mother face lawsuit from mental health startup, Wondermind, investors alleging fraud

Selena Gomez and her mental health startup Wondermind have been sued by investors who allege they were misled about the company’s finances, leadership and plans.

Two limited liability companies, Wondermind SRS 44 and Bespoke Wondermind SPV, filed a lawsuit in federal court in Delaware on Thursday, accusing Gomez, her mother Mandy Teefey, co-founder Daniella Pierson and Wondermind of securities fraud and other claims.

The plaintiffs say they invested nearly $1.2 million in the company.

According to the lawsuit, investors were told Wondermind had the infrastructure, leadership and partnerships needed to operate successfully.

They allege they were also led to believe Gomez would be “intimately involved” in the business as its head of marketing.

The plaintiffs claim several initiatives promised by Wondermind never materialised, including a planned mobile app.

They also allege the company had represented that it had partnerships with JP Morgan and Fidelity and expected $5 million in advertising revenue in 2022.

“The partnerships did not exist. 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,” the complaint states.

The lawsuit further alleges that investors only became aware of serious problems after reporting about Wondermind's financial difficulties and internal issues emerged.

The plaintiffs also cite claims concerning Pierson's business background and allegations that investor funds were misappropriated for personal expenses. The allegations have not been proven in court.

Wondermind was launched by Gomez, Teefey and Pierson in 2022 with a focus on mental health and “mental fitness”. The company planned to offer digital content and an app featuring articles, interviews and advice.