Selena Gomez is hitting back against a lawsuit accusing her of fraud in connection with Wondermind Global, her mental health startup.
Mathew S. Rosengart, an attorney representing the “Only Murders in the Building” star, slammed the fraud and breach of contract lawsuit that was recently filed against Gomez and her former business partners in a statement shared with USA Today on Sunday.
Investment fraud targets the human desire for financial growth by promising high returns with “low to no risk.”
- Ponzi Schemes: Named after Charles Ponzi, these schemes pay “returns” to earlier investors using the capital brought in by newer investors. There is no actual underlying business; the system collapses when new recruitment slows down.
- Pyramid Schemes: Similar to Ponzi schemes, but participants are usually required to sell a product or service. The primary “profit” comes from the recruitment fees of new members rather than actual product sales.
- Pump and Dump: Fraudsters spread false, positive rumors about a cheap stock (the “pump”) to drive up the price. Once the price peaks, they sell their shares (the “dump”), leaving other investors with worthless stock.