After balking at a proposed settlement with Fairfield Greenwich Group last month, Massachusetts accepted a slightly richer offer from the Bernard Madoff feeder fund, it said this week.

Under the deal with Massachusetts Secretary of the Commonwealth William Galvin, New York-based FFG will pay a $500,000 fine and up to $7.5 million in restitution to its clients in Massachusetts who lost money in the Madoff Ponzi scheme. Last month, Galvin junked a settlement offer from FFG that would have returned $6 million to investors, which amounted to full restitution for the roughly dozen FFG clients who live in Massachusetts.

FFG did not admit or deny the charges levied in Galvin’s April lawsuit against the firm, in which he accused it of “flagrant and recurring misrepresentations” to its investors.

Galvin said he hopes that the deal, “the first investor relief ordered by a regulator in the Madoff scandal,” would “become a template for other resolutions.” That seems unlikely, given that most of the $65 billion involved in the scandal simply no longer exists.

For its part, FFG said it just wanted to put the Massachusetts lawsuit behind it.

“The settlement with Massachusetts was deemed very important because it promised to be a lengthy and expensive hearing if we had to go through it,” Thomas Mulligan, a spokesman for FFG, told Bloomberg News. “It made sense for Fairfield to try to settle this thing so we could focus on other pending litigation,” of which there is no small amount.

FFG lost more than $7 billion in the Madoff scandal, most of it from a single fund of funds that invested almost exclusively with the arch-fraudster. Earlier this year, the firm, which has been inundated with lawsuits, gave up control of most of its remaining hedge funds.