Ranieri Resigns Post as Salomon Vice Chair

Lewis Ranieri, revered on Wall Street as the “father of the mortgage securities market” and the man many regarded as heir apparent to Salomon Bros. Chairman John H. Gutfreund, resigned Tuesday to “pursue private entrepreneurial interests.”

His surprise resignation is viewed as a setback for Salomon, whose dominance of this important segment of the securities business is already under intense attack from such competitors as First Boston and is now expected to be further threatened with the loss of Ranieri.

“I about fell out of my chair when I heard the news,” said Barry Friedberg, a Merrill Lynch vice president. “On Wall Street, he’s a legendary figure.”

The Brooklyn-born Ranieri started with Salomon Bros. 19 years ago as a $70-a-week mail clerk and worked his way up to vice chairman last year. In the interim, he took a virtually nonexistent business--converting home mortgages to securities--and built it into a hugely profitable operation that transformed the mortgage-lending business. Today, every Wall Street investment firm is in the mortgage-backed securities business, which Salomon still dominates.

Although Ranieri’s departure coincides with a round of massive bond trading losses that have blindsided most Wall Street investment firms this quarter--including Salomon--analysts and Salomon competitors were skeptical Tuesday that the timing was more than coincidence.

Many on Wall Street consider it more likely that Ranieri and Gutfreund may have parted ways over the firm’s direction. That speculation was swiftly denied by Salomon Managing Director Robert Salomon, who dismissed it as “unfounded.”

Ranieri, who was not available for comment, merely has “other interests” and wanted more time to pursue them, Salomon said.

In fact, Ranieri was quoted by some of his Wall Street colleagues Tuesday as having remarked recently that “you can only get so rich.”

At age 40, “he is just tired of the race and wants to do other things,” one Wall Street acquaintance said.