Massachusetts’ top securities regulator on Wednesday alleged a Bear Stearns Cos. unit failed to notify investors about a conflict of interest in its trading with two Bear Stearns-managed hedge funds that suffered billions of dollars in losses.

A civil complaint by Massachusetts Secretary of State William Galvin says Bear Stearns Asset Management Inc. violated securities laws and its own rules by failing to notify the hedge funds’ independent directors that it was trading securities from its own accounts with hedge funds it also advised.