P.M. BRIEFING : Lloyd Bridges Settles Suit Over Commercials for Failed Firm

Lloyd Bridges agreed to a settlement today in a lawsuit charging that his appearance in TV commercials for a company that bilked investors out of millions of dollars made him liable for the losses.

The actor’s lawyer said the case established a trend in federal courts toward holding celebrities and advertising agencies accountable for even innocent misrepresentations in advertising.

The settlement was approved during a brief hearing before U.S. Bankruptcy Judge Robert E. Ginzberg. It included a confidentiality agreement barring disclosure of settlement terms.

The Bridges case was an offshoot of bankruptcy proceedings involving A. J. Obie & Associates, an investment firm for which he did a TV commercial, and its companion firm, Diamond Mortgage Corp.

The two firms--both owned by the same parties--filed bankruptcy in 1986, leaving investors with claims totaling more than $40 million.

It was later discovered that the companies were engaged in a confidence game known as a “Ponzi scheme,” in which investors’ money was used to pay off prior investors, giving the illusion of success, or else was pocketed by the companies’ owners.