Selena Gomez and her mental health startup accused of fraud
By CNN, August 14, 2026Selena Gomez and her mental health startup, Wondermind, are facing legal challenges after several investors filed a lawsuit accusing the company of fraud.
According to court documents filed on Thursday, August 13, five investors who contributed a combined $1.2 million, which is Ksh155,376,000, to the company in 2022 claim they were given a misleading picture of Wondermind’s financial position and plans.
Wondermind was launched in 2021 as a media platform focused on mental health and daily emotional well-being. Gomez was introduced as the company’s co-founder, chief impact officer, and head of marketing.
The lawsuit argues that investors expected the singer to use her influence and large social media following to help expand the company and attract more opportunities.
Investors claim promises were never fulfilled
According to the legal complaint, investors believed the company would secure major business partnerships, advertising agreements and celebrity-driven projects. The lawsuit states that Wondermind was presented as a company valued at Ksh12,288,250,000 in 2022.
Investors also believed the company was preparing to launch a mental health application while building partnerships with large organisations. However, the lawsuit argues that many of those plans never became reality.
“The partnerships did not exist. The initiatives never materialised. The app was never built,” the investors stated in the lawsuit.
The investors further stated that they were not informed about the company’s difficulties as problems continued behind the scenes. “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 lawsuit claimed.
Gomez’s mother and former business partner also named
The lawsuit does not only target Gomez. Her mother, Mandy Teefey, who served as the company’s co-chief executive officer, was also named in the case.
Former business partner Daniella Pierson was included in the lawsuit as well. The investors are pursuing several claims, including securities fraud, common law fraud and breach of contract.
They are seeking the return of their investments, additional damages and legal fees.
Questions raised over company finances
The legal complaint also raised concerns about how company funds were managed. According to the lawsuit, Teefey told investors that Pierson had used investor money to cover personal expenses, including rent for a New York apartment.
The lawsuit claims those monthly expenses reached approximately Ksh 7,770,000. Pierson has strongly denied those allegations.
“I deny the allegations against me and welcome the opportunity to present concrete documentation and financial records that establish the facts,” Pierson said in a statement.
She also insisted that she never used investor funds for personal expenses.
A company built around mental health now faces public scrutiny
Wondermind was created to encourage conversations about mental health and provide practical ways for people to prioritise emotional well-being. However, the company attracted attention last year after reports highlighted internal disagreements and leadership struggles.
Those reports have now become part of the legal battle. At the time the lawsuit was filed, Gomez, Teefey and Wondermind had not publicly responded to requests for comment.