BOSTON, AUG. 6 -- A Massachusetts official filed a complaint today accusing a Shearson Lehman Hutton Inc. agent of squandering the life savings of a 90-year-old widow.

A complaint filed by Secretary of State Michael J. Connolly's office alleges that George Prebola, a Shearson vice president and registered agent based in Boston, conducted unsuitable and highly speculative trading with money invested by Mary Dillon of Walpole, Mass., who was on a fixed income.

Connolly's office is seeking to have Prebola's license revoked and to have Prebola and Shearson return money made from her investments.

Steven Kaigen, a Shearson spokesman in New York, said the matter had been settled privately in May between Shearson and lawyers for Dillon's granddaughter, Bernadette Carty. He said the firm had had no previous problems with Prebola.

"We will work with the commonwealth of Massachusetts to resolve the matter," Kaigen said.

The complaint alleged that Prebola engaged in dishonest and unethical conduct that resulted in Dillon losing almost all of her initial investment of $150,000. Prebola earned commissions of about $87,000 and Shearson earned interest on margin debts of about $36,000, the complaint alleges.

Dillon, who has since died, sold her house when her husband died and sought to invest the proceeds, said Marty Meehan, a deputy secretary of state. Carty sought an agent in 1985 to invest her grandmother's money and provide her with a secure income. Prebola assured Carty that Dillon's funds would be safely and profitably invested, the complaint alleges.

But in 1986 and 1987, Prebola changed Dillon's investment objective from a conservative investment strategy of "appreciation with safety," to "speculative," the complaint alleged.

The complaint also alleges that on several occasions Prebola altered Dillon's personal account information to make her look like a younger, more experienced investor.

Meehan said that by October 1987 Dillon's money was gone.

The complaint also alleges that Shearson failed to properly supervise Prebola, allowing him to conduct improper trading in Dillon's accounts.