American singer and actress Selena Gomez has rejected fraud allegations leveled against her by investors who claim to have lost nearly $1.2 million after investing in Wondermind, a mental health company she co-founded with her mother.
Investors allege that Gómez failed to adequately support or promote the company despite being presented as an important part of its marketing strategy. They claim they were told the singer and actress would use her large social media following and public profile to help build the business.
Gomez’s attorney, Matthew Rosengart, strongly denied the allegations and asked a court to dismiss her from the case.
He described the claims as “frayed,” “vague, generalized and contradictory,” arguing that Gómez never agreed to manage Wondermind or assume the responsibilities that investors have attributed to him.
“The accusations against her are baseless, if not frivolous,” Rosengart said.
He also said the legal team was considering further action, including possible sanctions against the investors who filed the claims.
The dispute centers on Wondermind, a mental health platform founded by Gómez, her mother and another co-founder about five years ago. Investors say they were encouraged to pour money into the company because of Gomez’s involvement and influence.
According to the allegations, investors believed Gomez would play an active role as the company’s chief marketing officer.
However, her attorney maintains that she made no such commitments and should not have been included in the lawsuit.
The case also puts Gomez’s mother in the spotlight, as she remains involved in the fraud allegations along with Wondermind and another co-founder.
Crisis public relations expert Lauren Beeching said celebrity-led businesses that involve family members can create additional risks because personal relationships and business responsibilities can become difficult to separate.
He said celebrities who work with family members should establish clear responsibilities, independent oversight and formal safeguards in case problems arise.
“A family relationship should not be the governance structure of a company,” Beeching said.
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Despite the legal dispute, Beeching believes the case may have limited long-term consequences for Gomez’s reputation because his primary audience may not pay much attention to the allegations.
He said there was an important difference between generating negative headlines and causing lasting reputational damage.
Gomez rose to fame as a Disney Channel star before establishing a successful career in music, acting and television. She has also built a major beauty business and has millions of followers on social media.
The legal dispute comes as Gomez prepares for the release of the sixth season of Only Murders in the Building, in which she stars alongside Steve Martin and Martin Short.
For celebrities who use their personal reputation to promote businesses, Beeching advised them to consider not only what their fame can do for a company, but also how the company’s performance could affect their own reputation.
(BBC News)
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