Topline
Investors in Selena Gomez’s struggling mental health startup, Wondermind, sued Gomez, her mother, and the company’s co-founder in federal court Thursday, accusing them of securities fraud for promising initiatives that never materialized without properly communicating with the investors whose money was allegedly “funding the collapse.”
Selena Gomez and her mother, Mandy Teefey, were both accused of securities fraud in the lawsuit. (Photo by Jack Plunkett/Invision/AP)
2024 Invision
Key Facts
Wondermind SRS 44 and Bespoke Wondermind SPV, limited liability companies claiming to have invested nearly $1.2 million in Gomez’s startup, filed the lawsuit in Delaware federal court on Thursday, accusing the defendants of multiple counts of fraud and breach of contract.
The plaintiffs asserted they invested in the company based on misleading information, believing it had the necessary infrastructure for success, including competent leadership and viable partnerships, alleging that these representations were false.
The lawsuit references a September 2025 article in The Cut, which detailed allegations of mismanagement and substance abuse by Gomez’s mother, Mandy Teefey, along with Gomez’s apparent attempts to distance herself from the company amid a rift with her mother.
Additionally, the lawsuit cites Forbes reporting that revealed co-founder Daniella Pierson had exaggerated her newsletter’s readership and valuation, claiming Teefey informed the plaintiffs that Pierson misappropriated investor funds following the publication of the Forbes article.
The fraud complaints include allegations that the company misrepresented Gomez’s expected involvement, Pierson’s business acumen, Teefey’s leadership capabilities, and the company’s growth trajectory.
Crucial Quote
“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 plaintiffs state in their complaint.
What Does the Lawsuit Say?
The investors allege they were misled consistently, citing a May 2022 meeting with Pierson and subsequent email exchanges where she falsely detailed the success of Wondermind and claimed partnerships with JP Morgan and Fidelity. Pierson suggested the company anticipated generating $5 million in advertising revenue that year and had reached 150,000 subscribers, asserting that the valuation could exceed $4 billion. These claims, now labeled as misrepresentations in the lawsuit, were revealed to be false after Forbes exposed the discrepancies. When investors sought clarification from Teefey regarding the revelations, she alleged that Pierson had earmarked company funds for personal expenses, including her New York apartment rent. The lawsuit highlights that many key initiatives, such as a planned app, never materialized, while the defendants allegedly continued making false claims about the company’s health as recently as April.
What Are the Defendants Accused Of?
All individual defendants, including Gomez, her mother, and Pierson, along with Wondermind itself, face accusations of securities fraud for purportedly misrepresenting the company’s financial status. They allegedly overstated Gomez’s involvement as the “head of marketing,” misrepresented Teefey’s competence in leadership, and misjudged Pierson’s business background, all while knowing that many initiatives were either unrealistic or compromised by the misuse of investor funds. Pierson is also specifically accused of making misleading statements about the company’s growth trajectory to attract investors and faces additional charges of conversion and unjust enrichment for allegedly using investor funds for personal gains. Furthermore, all defendants are charged with fraudulent inducement of the investors’ purchases, and Wondermind is accused of breach of contract.
What Do We Know About Wondermind?
Launched in 2022 by Gomez and her co-founders, Wondermind was based on the belief that mental health requires daily attention akin to physical fitness. The startup promised a suite of products, including a website and an app offering mental health resources. However, reports began circulating about the company’s troubles, such as an incident in May 2025 when it could not pay its employees. Teefey was reported to have taken out a loan to keep the venture afloat, while a spokesperson claimed the company had “rectified” its financial situation amid “growing pains.” Shortly thereafter, it was reported that Wondermind laid off nearly two-thirds of its workforce. A September 2025 investigation in The Cut revealed allegations of erratic behavior from Teefey, with some claiming she was “sometimes intoxicated” at work, which she has denied. The exposé suggested that Teefey had known the company was financially unsustainable by 2023 and that both she and Gomez had invested $8 million of their own funds to attempt to keep it alive.
Further Reading
Selena Gomez’s Struggling Mental Health Startup Lays Off Nearly Two-Thirds Of Its Employees (Forbes)
‘Smoke And Mirrors’: How This Entrepreneur Exaggerated And Self-Promoted Her Way Into Turmoil (Forbes)
