Two mortgage-related funds that collapsed at Bear Stearns earlier this year amid the intial subprime credit meltdown are now the subject of a criminal investigation, the Wall Street Journal reported today. From the story:

The U.S. attorney in Brooklyn has made a request to Bear Stearns for information related to the hedge funds, whose failure cost investors $1.6 billion, said these people. The probe is in the early stages, the people added, and has not generated subpoenas. The specter of a criminal investigation is clearly bad news for the embattled Wall Street firm, which is already under the microscope by the U.S. Securities and Exchange Commission.

The two funds in question — High-Grade Structured Credit Strategies Fund and the High-Grade Structured Credit Strategies Enhanced Leverage Fund — imploded earlier in the year, with Bear Stearns telling investors in July that the Funds were essentially worthless. In the meantime, the investment bank went on the positive offensive today, saying it was not seeking an infusion of capital. Per Bloomberg:

“I’m confident that Bear Stearns will weather the storm and come out a stronger, more diversified and a greater organization,” Chief Executive Officer James Cayne said at the conference. “We’re not looking for an equity infusion.”

Commentary appearing in the WSJ suggests that Bear faces an uphill climb to get there:

… Cayne would need to pull a great result out of a weak hand. That is tough, given everyone knows roughly what cards he holds. This is bridge, not poker, and opportunities to cover weakness with bluffing are few and far between.