BOSTON (AP) _ State securities regulators have accused a Boston investment firm of failing to supervise two agents who allegedly sold unregistered hedge funds to investors that cost some their life savings.

According to a civil complaint, James Pangione of Sterling and Timothy Rassias of Holden, representatives of Cantella Securities Inc., solicited investments for unregistered securities in 1999.

Secretary of State William Galvin's office, which oversees securities regulation, said it became aware of the actions last June following a lawsuit by a client who lost $100,000 in one fund. Overall, customers lost more than $3 million, Galvin's office said.

The civil complaint seeks to return an estimated $3.5 million to Cantella customers who invested in the two funds, an unspecified fine and a cease and desist order.

Mike Frasier, who identified himself as a compliance officer at the company, said Cantella had not received the complaint and would have no comment.

Hedge funds pool money from investors and invest it in various ways in an effort to get the highest return. Unlike mutual funds, they mostly are not required to register with the Securities and Exchange Commission and therefore are subject to few controls.