Superstar Selena Gomez and her mother are accused of defrauding investors of their mental health startup, Wondermind, in a federal lawsuit filed Thursday.
Wondermind, which was co-founded by Gomez; her mother, Mandy Teefey; and Daniella Pierson in November 2021, touts mental fitness practices and tools.
The suit accuses Wondermind and its founders of falsely representing the company’s infrastructure, leadership and partnerships to investors and concealing the alleged fraud for more than three years.
The founders told investors they would build a Wondermind app, boasted advertising deals and secured celebrity cover stories, none of which came to fruition, the complaint says.
Investors poured nearly $1.2 million into Wondermind, but the trio falsely represented the company’s plans to make it profitable, the suit says.
It alleges that investors were kept in the dark until two bombshell media reports portrayed Wondermind as a company in utter disarray.
The suit was filed in federal court in Delaware by Wondermind SRS 44 LLC and Bespoke Wondermind SPV I LLC, limited liability companies that invested in the startup.
They accuse the company and the founding trio of securities fraud, common law fraud and breach of contract and are seeking rescission — meaning a legal cancellation of a contract — of their investment, as well as damages.
Representatives for Wondermind, Gomez, Teefey and Pierson did not immediately respond to requests for comment Thursday.
Investors say in the suit that they believed the money they gave Wondermind would rapidly scale and build a full suite of company products, including an app, a podcast, an editorial publication and other wellness products.
They also believed that the company’s value lay in Gomez’s involvement as a celebrity with a massive, loyal fan base. The suit alleges that Wondermind had indicated that Gomez would be “intimately involved in the Company” as head of marketing and involved in publicity.
But none of those things happened, the suit says.
“Gomez purported to sign a contract obligating her to perform and then ignored it. The partnerships did not exist. The initiatives never materialized. The app was never built,” it says. “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 investors also allege in the suit that the defendants did not provide timely updates about the status of their investments and the company’s operations unless they were pressed.
In the limited updates they did provide, “they both affirmatively misrepresented the status of the Company’s operations and concealed material information about ongoing issues at the Company,” the complaint says.
