BOSTON (AP) — Massachusetts regulators reached an $8 million settlement yesterday with one of the so-called Bernard Madoff feeder funds that calls for full restitution for the state's victims.

The deal was struck less than 24 hours before New York-based Fairfield Greenwich Advisors was to appear at a state hearing. The hedge fund had earlier offered a $6 million settlement, but the state rejected that offer.

Secretary of State William Galvin filed a civil fraud complaint against Fairfield Greenwich in April on behalf of 10 state investors, saying its executives did not conduct adequate oversight of Madoff and misrepresented its lack of knowledge about Madoff's operation to investors. The firm has disputed Galvin's allegations, saying it was an innocent victim of the disgraced financier.

Galvin said the $8 million settlement announced yesterday is the first investor relief ordered by a regulator. The settlement includes a $500,000 fine against the company.

"I hope the full return will become the template for others, in terms of feeder funds," Galvin said.

Under the agreement announced yesterday, Fairfield Greenwich did not admit wrongdoing. The settlement also dropped the fraud charges included in the original complaint filed by Galvin.

"In agreeing to the settlement, Fairfield Greenwich's goal was to resolve the Massachusetts action in order to avoid drawn-out hearings and significant legal bills, so that the firm could focus its time and resources on other legal claims involving many more investors. Fairfield Greenwich already is in discussions that seek to settle these other claims," the company said in a statement.

In May, the New York trustee overseeing the liquidation of Madoff's's assets sued Fairfield Greenwich, claiming the firm ignored clear warning signs Madoff was orchestrating a giant fraud and seeking to return $3.5 billion to pay off claims from burned investors.

Galvin said the firm invested more than 95 percent of its Sentry Funds' $7.2 billion in assets in Bernard L. Madoff Investment Securities.

Madoff is serving 150 years in prison for defrauding investors in a multibillion-dollar Ponzi scheme.

The names of the Massachusetts investors were not made public, but previous media reports have identified Boston philanthropists Charles O. Wood III and Miriam Wood. They did not immediately return a call seeking comment on the settlement.