As the common name suggests, it's found predominently, but not exclusively, with Sphanum; similar wet and boggy areas with other mosses are suitable. Considering the vast areas of this habitat, especially in the north, it's not often recorded

References: 
Smith & Singer (1964) A Monograph of the Genus Galerina
Hann & Walleyn (2006) Studies in Galerina. Galerinae Flandriae (2)
Watling & Gregory (1993) British Fungus Flora 7: Cortinariaceae
Gulden (2010) Galerinas in Cold Climates