William Galvin, Secretary of the Commonwealth of Massachusetts, has become the latest US regulator to act on improper hedge fund-related activity.

Galvin has filed a civil complaint against Cantella Securities, a US house, for failing to supervise two brokers accused of selling unregistered hedge funds to unqualified buyers. Galvin said investors lost almost all the $3.5m (€2.8m) they invested in hedge funds created by two brokers affiliated with Boston-based Cantella. According to the complaint, James Pangione and Timothy Rassias, representatives of Cantella, were given approval by Cantella in 1999 to create and sell their hedge funds, Hercules Hedgehog Fund and Agrippa Fund, but their activities were never supervised.