Singer and actress Selena Gomez is being accused of fraud by investors in Wondermind, the mental health startup she co-founded in 2021.
They claim she failed to deliver on promises to leverage her global fame and social media following to promote the brand.
Investors also allege they were misled about the company’s leadership and prospects.
Gomez and her team have denied the allegations.
Here’s what you need to know.
Selena
Gomez got her start as a child actress on ‘Barney & Friends’ before landing a lead role in Disney’s ‘Wizards of Waverly Place’ in 2007.
Since then, she’s built a music career, earned an Emmy nomination for ‘Only Murders in the Building’, and launched Rare Beauty, now valued at over $US2 billion.
She’s also Instagram’s most-followed woman, with 403 million followers.
In 2021, Gomez co-founded the mental health media platform Wondermind after going public with her own mental health struggles, including a bipolar diagnosis.
The pitch was this: a mental health and “mental fitness” platform built to scale fast, combining an editorial arm, a mobile app, a podcast, and wellness products.
Gomez would act as a “Head of Marketing” and be involved in promoting Wondermind’s ventures.
The startup raised $5 million in 2022 at a $100 million valuation despite no revenue, later landing Gomez on Inc.’s Female Founders 250 list.
Investigations
A Forbes story published in August 2025 alleged Wondermind co-founder Daniella Pierson had repeatedly inflated the revenue, investment and subscriber numbers of her own newsletter, The Newsette, and her venture capital firm, Chasm.
By the time these allegations came out, Pierson had already left Wondermind two years prior.
Following the article, Mandy Teefey, Gomez’s mother and Wondermind’s CEO admitted Pierson had misappropriated the company’s funds, including to cover rent on her New York apartment.
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In September 2025, U.S. publication The Cut ran a much bigger feature on Wondermind itself, describing a company falling apart under Teefey’s erratic leadership.
It alleged she’d been abusing drugs and sleeping at the company’s LA office.
It also detailed staff going unpaid and a fraught, distant relationship between Gomez and her mother.
Investors say these two articles were the first they’d heard of any issues.
Lawsuit
Last week, two investor groups sued Wondermind, Gomez, Teefey and Pierson in a Delaware court.
Together they’d put in roughly US$1.2 million back in 2022 in exchange for shares in the company.
Among the alleged misrepresentations were that Gomez would be “actively building the company as its head of marketing”, that Pierson was a “$200 million executive” who had already secured partnerships, and that a “full slate of revenue-generating initiatives” had begun.
None of it happened, they say.
They’re now suing for fraud and breach of contract.
They are asking for their investment back, plus damages.
Response
Gomez’s lawyer calls the claims “completely meritless” and plans to seek a dismissal of the case.
A rep for Pierson has also pushed back, denying she misused investor funds and saying she put her own money into the business without ever taking a salary.
Teefey and Wondermind are yet to respond directly to the lawsuit, and the company’s social media accounts have been dormant for over a month.
It’s not yet been determined if the case will actually go to trial.
