Selena Gomez and her mom sued for alleged fraud by mental health startup investors

Selena Gomez and her mother, Mandy Teefey, are facing a lawsuit from investors who allege they were misled into putting more than $1 million into their mental health startup, Wondermind.

According to Reuters, The case centers on claims that investors were given an overly positive picture of the company's leadership, resources and prospects while serious problems were allegedly developing internally.

The lawsuit also names Wondermind Global and former co-founder Daniella Pierson as defendants.

The investors say they put around $1.2 million into the company after being encouraged by representations about Gomez's involvement and the potential for the business to grow.

They are now seeking to recover their investment, along with other damages and legal costs.

Wondermind was launched in 2021 by Gomez, Teefey and Pierson as a platform focused on mental health and wellness.

Gomez's celebrity profile was reportedly a major part of the pitch to investors, with the lawsuit claiming she promoted the company through television appearances and interviews.

The investors allege that Gomez appeared to be closely involved with the business before their money was committed, but that her participation later became limited. (Photo by Christopher Polk/2026GG/Penske Media via Getty Images)

What is Selena Gomez accused of in the Wondermind lawsuit?

Investors allege that Gomez appeared to be closely involved with the business before their money was committed, but that her participation later became limited.

The complaint reportedly claims she was supposed to play a significant role in marketing Wondermind and help develop the business, but did not fulfill those responsibilities after the investment was made.

Investors have also accused Pierson of making misleading claims about her previous business achievements and the financial returns they could expect.

At the center of their complaint is the allegation that they were not properly informed as Wondermind's financial and operational situation deteriorated.

They say they only became aware of the extent of the problems after an investigation published by The Cut in September 2025.

That report described serious difficulties at the company, including problems paying employees and vendors. It also contained allegations concerning Teefey's management of Wondermind and claims about substance use.

Teefey has denied those accusations.

Mandy Teefey has denied the substance abuse claims and that the company was a mess. (Photo by Nicholas Hunt/Getty Images)

In a statement Teefey said it was 'unfortunate' that former employees could spread what she described as lies about her and claimed the media had distorted the situation.

She said: "It's unfortunate that a few disgruntled employees with an ax to grind can spread lies about me and distort the truth.

"Even more disappointing that the media is willing to amplify their lies."

What went wrong at Wondermind?

The latest lawsuit follows a difficult period for Wondermind.

Forbes reported in 2025 that the company had struggled to pay employees, freelancers and vendors, while almost two-thirds of its staff were eventually laid off.

Teefey also told employees she had taken out a loan against her home to help cover company debts.

Wondermind had previously raised $5 million in a 2022 funding round that reportedly valued the startup at $100 million, highlighting the scale of expectations surrounding the business.

The investors now allege that the problems had been concealed from them for years, arguing they were effectively funding a company whose position was already deteriorating.

The lawsuit seeks unspecified damages, including repayment of the investors' money. The allegations have not been proven in court.

UNILAD has approached Wondermind, Mandy Teefey Selena Gomez for comment.