Selena Gomez and her mom Mandy Teefey are in hot water with two investment companies over their failed company.
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According to a lawsuit obtained by TMZ, two companies, Wondermind SRS 44 LLC and Bespoke Wondermind LLC filed a suit against Gomez, Teefey, and their former business partner Daniella Pierson over Wondermind, a mental health company started by the pop star in 2021.
The companies say they invested over $1 million in Wondermind based on being told that Gomez was going to heavily promote the project. They also claim that Gomez and Teefey made false representations about the infrastructure, leadership, and resources necessary to make the company launch and be profitable.
But they say none of that ever happened.
The suit claims that “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 report from NBC News says the lawsuit accuses the three of securities fraud, common-law fraud, and breach of contract, and are seeking rescission — which is a legal cancellation of the investment contract, and damages.
The investors allege in the suit that the defendants didn’t provide timely updates about the status of the investments and the company’s operations unless pressed.
In their limited updates, “they both affirmatively misrepresented the status of the Company’s operations and concealed material information about ongoing issues at the Company,” the complaint says.
The investors claim they had no idea how bad things were going until two bombshell articles about Wondermind: one from Forbes focusing on Pierson, and one from The Cut that alleged Teefey had a substance abuse problem.
In a statement to NBC News, Pierson categorically denies the allegations against her and “welcomes the opportunity to present concrete documentation and financial records that establish the facts.”
“To be clear, she has never used investor funds for personal expenses. Quite the opposite: Daniella invested her own money into the business and did not draw a salary from the company,” she said.