Selena Gomez and her mental health startup accused of fraud

Key Points:

• Several investors in Selena Gomez’s mental health startup Wondermind have filed a lawsuit alleging they were misled about the company’s success and Gomez’s involvement, claiming they invested $1.2 million in 2022 expecting her star power to boost the business.
• The lawsuit accuses Gomez, her mother and co-CEO Mandy Teefey, and former business partner Daniella Pierson of securities fraud, common law fraud, breach of contract, and other claims, seeking to recover investments, damages, and attorney’s fees.
• Investors allege the company’s touted $95 million valuation and promised partnerships with firms like JPMorgan, as well as advertising deals and a mental health app, never materialized, and the business quietly collapsed without communication to investors.
• The suit references a 2023 article by The Cut highlighting internal power struggles and claims Gomez did not fulfill contractual duties due to personal issues, while also accusing Pierson of misusing investor funds for personal rent, which she denies.
• Gomez, Teefey, and Wondermind have not responded to requests for comment, while Pierson has denied the allegations and expressed readiness to provide financial evidence to refute the claims.