Another day, another hedge fund casualty of Wall Street’s subprime mortgage debacle.

Braddock Financial Corp.’s $300 million Galena Street Fund, the most recent victim of the collapse of subprime mortgage bonds, notified investors earlier in the week that it will be closing its doors.

The Denver-based Galena Street fund appears to have fallen prey to the investor panic surrounding default-ridden subprime bonds. Shocked and scarred investors – prompted by the collapse of two Bear Stearns hedge funds – have been yanking assets from the hedge funds that invest in these bonds.

In turn, the hedge funds have been flooding the market with subprime mortgage bonds in order to raise cash needed to return to investors. That has driven down prices across the board, depressing fund performance and making the bonds less attractive as collateral for loans.

Investors are expected to learn over the next two weeks just how much damage hedge funds have sustained as a result of the subprime mortgage mess, and if the news is as bad as some market players expect, there is a fear that investors could pull out in droves.

Already, some wide swaths of the $6 trillion mortgage-backed securities market have sold off sharply, adding to the concern that there could be many more Galena Street scenarios forthcoming.

A letter to Galena’s investors, which was obtained by The Post, noted that as of June 30, nearly 60 percent of its investors sought redemptions. News about Galena was first reported in The Wall Street Journal.

Prior to being caught in the subprime crossfire, Galena Street gave little hint it was in trouble, reporting a 3.02 percent loss year-to-date, after returning 69.7 percent over the previous four-year period.

David Allon, a Braddock Financial principal, told The Post that the Galena liquidation not forced because it did not use any leverage, and that the fund’s investors would get the first 20 percent of their capital back within a week.