A few years ago, Selena Gomez and her mother Mandy Teefey co-founded Wondermind, a start-up company that advertised itself as a "mental health ecosystem." Gomez, a pop star who is famous for her mental health struggles and advocacy, lists herself as Wondermind's "founder/CIO" in the bio of her extraordinarily popular Instagram account. Now, a number of investors are suing Gomez and Teefey for fraud, claiming that Gomez misrepresented her role in the company in her efforts to secure funding, and the star is seeking to have the case dismissed.
As People reports, two limited liability companies, Wondermind SRS 44 LLC and Bespoke Wondermind LLC filed a federal lawsuit against Gomez, Teefey, and their former business partner Daniella Pierson last week. Those investors claim that the three of them "falsely represented" the structure of the company, presenting Gomez as its face. Jeffrey Neiman, a lawyer for the plaintiffs tells TMZ that Gomez's involvement was the main reason that investors were interested: "Selena wasn't simply associated with the pitch. She was the pitch."
The lawsuit claims that investors expected Gomez to use her social media following to promote Wondermind but that she distanced herself from the company once they had the plaintiffs' $1.2 million investment secured. They also allege that Wondermind's founders presented an overly positive image of the company without disclosing its financial and leadership problems, learning about them in a story that appeared in The Cut last year. The claims against Gomez include securities fraud, common law fraud, and breach of contract. They're seeking to rescind their investments, and they're also looking for damages and other relief.
Last week, Selena Gomez's attorney Mathew S. Rosengart told Law Commentary that the defendants would file to dismiss that lawsuit, calling the allegations "completely meritless, both factually and legally." As People reports, Rosengart filed that motion for dismissal on Wednesday, claiming that she's innocent of fraud and not liable to the plaintiffs. In his motion, Rosengart writes:
Ms. Gomez agreed to support her mother Mandy Teefey, who co-founded Wondermind… Although she invested in and holds a minority stake in the Company, Ms. Gomez never agreed to and did not manage the Company...
Management was vested in Ms. Gomez’s mother, Mandy Teefey, and Ms. Pierson, who ran the Company as co-CEOs and board members. The Company, in turn, retained Ms. Gomez as a consultant and conferred on her the title of Chief Impact Officer (“CIO”).
Rosengart argues that the lawsuit is "completely meritless if not frivolous" and that those investors "never should have dragged Selena Gomez into this case," threatening retaliatory legal action. Last year, Forbes reported that Wondermind was having difficulty paying employees and that Teefey told employees that she took a loan out against her own home to cover payroll.
