A federal lawsuit filed in Delaware has accused mental health startup Wondermind, co-founded by Selena Gomez , her mother Mandy Teefey, and entrepreneur Daniella Pierson, of defrauding investors. The complaint alleged that the company misrepresented its business prospects, leadership, celebrity partnerships, and product development.
The lawsuit alleged that Wondermind’s founders made several promises that never materialized. Additionally, they believed that Gomez’s engagement as a star with a sizable and devoted fan base was what made the company valuable.
Investors said that they were told the company would launch a dedicated Wondermind app, secure major advertising partnerships, and feature celebrity cover stories to drive growth. Wondermind promised that Gomez would be “intimately involved in the Company” as head of marketing and public relations, according to the lawsuit. It added, “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. A Forbes investigation titled “’Smoke And Mirrors’: How This Entrepreneur Exaggerated And Self-Promoted Her Way Into Turmoil,” revealed Daniella Pierson’s claims as CEO of the daily newsletter regarding reported audience figures and company valuations. The suit read, “The accounts in the Cut article collectively show that, from the outset, Wondermind had no plan for its future — much less a plan for achieving a multi-billion dollar valuation.”
