Investors sue Selena Gomez for alleged fraud over mental health startup

Selena Gomez faces a lawsuit from five investors who backed Wondermind Global, a mental health company she founded with her mother. The shareholders claim that Gomez failed to fulfill promises to actively build the brand, leading the company to a "state of financial calamity." The lawsuit seeks to recover around $1.2m in invested funds, as well as costs and damages.

Gomez set up Wondermind five years ago with her mother Mandy Teefey and businesswoman Daniella Pierson. The 34-year-old singer, known for her music career and cosmetics line Rare Beauty, has over 500 million social media followers and an estimated net worth of nearly $1bn. However, the lawsuit alleges that Wondermind's founders misrepresented their positions by promising a "full slate" of ad deals, celebrity cover stories, and app initiatives, while Gomez allegedly did not take an active role as head of marketing.

According to the complaint, Wondermind failed to meet basic obligations, such as timely payments to employees and vendors. The investors were unaware of the company's difficulties until an investigative news story by The Cut surfaced in September 2025, revealing financial issues and management problems. The lawsuit claims that none of the founders, officers, or directors informed the investors of these issues during the three years the company quietly collapsed.

The five investors, based in New York and Florida, are seeking restitution of around $1.2m, as well as additional costs and damages.