Ranieri Solutions, the blockchain startup of Salomon’s Lewis Ranieri, gets funding
A Uniondale startup founded by a Wall Street executive considered the “father” of the mortgage-backed securities market is raising funds to advance its blockchain technology.
In December, Ranieri Solutions LLC, founded by CEO Lewis S. Ranieri, raised $500,000 in debt financing, the first part of a $1.2 million round, according to the Securities and Exchange Commission.
It was unclear who provided the funding, and the company did not respond to requests for comment.
Ranieri Solutions, which has raised a total of $9.5 million, according to Standard & Poor’s Global Market Intelligence, is working with technology companies to create and apply blockchain technology in the real estate and mortgage markets.
Ranieri, once a vice chairman of Wall Street investment bank Salomon Brothers, played a leading role in establishing the market for securities backed by a bundle of mortgages that were wrapped into bonds by Wall Street firms. Mortgage-backed securities allow banks to sell their mortgages to financial institutions, which combine them into securities that can be sold to institutional investors.
These securities played a leading role in the global financial crisis of 2007-2008 when lenders began aggressively marketing mortgages to borrowers with low credit scores. These mortgages were packaged into securities that led to a subprime lending bubble.
Ranieri was one of the personalities depicted in the Michael Lewis book “Liar’s Poker,” about the author’s days at Salomon Brothers in the 1980s, when the investment bank was known for a take-no-prisoners culture.
Ranieri left Salomon Brothers in 1987 and a decade later Salomon was acquired by Travelers Group, which merged with Citicorp the following year.
Ranieri is also listed as founding partner and chairman of Ranieri Partners, which is located at the same Uniondale address on Charles Lindbergh Boulevard as Ranieri Solutions. Ranieri Partners is a private company that invests in distressed commercial real estate and mortgages.
Blockchains are a type of ledger developed for cryptocurrency transactions. Blockchain transactions are recorded identically in several places, which provides security. “Smart contracts” that will execute when certain conditions are met can be built into a blockchain. Such smart contracts can theoretically eliminate intermediaries, and reduce the costs of transactions.
The price of risky assets, including cryptocurrencies, has fallen sharply over the past year, leading to a liquidity crisis and bankruptcy filings by some cryptocurrency companies, including Sam Bankman-Fried’s FTX.
Mark Grabowski, who teaches cyber law at Adelphi University and is the author of “Cryptocurrencies: A Primer on Digital Money,” said that while some may be wary of blockchain technology because of its association with cryptocurrency, it can be useful in streamlining real estate . transactions.
“It can cut out the middleman, processing fees and time,” Grabowski said.
In December, a technology partner of Ranieri Solutions, Manhattan-based Symbiont.io Holdings Inc., filed a Chapter 11 filing in the US Bankruptcy Court for the Southern District of New York. Symbiont’s clients include Nasdaq and investment giant Vanguard.
Ken Schachter covers corporate news, including technology and aerospace, and other business topics for Newsday. He has also worked at The Miami Herald and The Jerusalem Post.
