Selena Gomez has forcefully denied allegations of fraud leveled against her and her mother, Mandy Teefey, by investors in their mental health company, Wondermind. The lawsuit, filed by Wondermind SRS 44, LLC and Bespoke Wondermind SPV I, LLC, claims the founders "falsely represented" the company as poised for success while it was in a state of collapse.
Gomez's attorney, Mathew S. Rosengart, stated that the accusations are "completely meritless, both factually and legally." He added, "We will vigorously defend these false allegations and indeed are filing a motion to dismiss the baseless claims against her." The investors are seeking a jury trial, alleging they were unaware of the company's problems for over three years before an exposé was published.
The plaintiffs allege that Wondermind's founders, including Gomez, Teefey, and Daniella Pierson, misrepresented the company's infrastructure, leadership, and resources. Specifically, they claim investors were told Gomez, a globally recognized figure, would be actively involved in marketing, co-CEO Daniella Pierson was a highly successful executive with major partnerships, and that revenue-generating initiatives were already underway. According to the suit, these representations were false, with partnerships not existing, initiatives not materializing, and an app never being built.
The lawsuit further contends that for three years, the company's founders concealed its financial collapse from investors. The plaintiffs only learned of the extent of the company's troubles through an exposé published by The Cut. The company, inspired by the founders' personal mental health struggles, had reportedly laid off 60% of its employees amid a financial crisis.
The Cut exposé detailed allegations of disarray behind the scenes, including accusations of erratic behavior by CEO Mandy Teefey. The lawsuit references these claims, stating they proved the company's operations, personnel, and financial prospects were a "fiction."
Investors reportedly sought to rescind their investments after The Cut's report. However, the suit alleges that Teefey continued to reassure them, claiming the company was "on track to release products in the first quarter to straight profit." Despite assurances and claims of ongoing negotiations, the lawsuit states that no investment funds were returned and that Teefey deflected inquiries about repayments.
The suit also alleges that investors were misled about Gomez's potential involvement due to her strained relationship with her mother, claiming founders were aware their "undisclosed personal disputes" would make her active participation "impracticable." Furthermore, the plaintiffs claim Teefey's alleged substance abuse issues made her "unfit to manage the company," a fact that was also concealed.
Co-founder Daniella Pierson's business background and achievements were also allegedly misrepresented. The lawsuit claims Pierson falsely represented her previous company's revenue and valuation.
The plaintiffs assert that the defendants actively concealed the company's true condition, leading them to believe it was thriving. The investors are seeking rescission of their investments, damages, costs, and attorney's fees.
Wondermind, which provides articles and interviews on mental health topics, is also facing a separate lawsuit for unpaid rent. Pierson reportedly departed the company in 2023.