In documents obtained under the Freedom of Information Act by Wharton Professor, Kenneth Thomas, it has been revealed the US Fed Chairman, Ben Bernanke, met with numerous Wall Street executives and money managers shortly before the Fed lowered rates by 50 basis points.

Bloomberg reported that Bernanke met with legendary Wall Street figure, Lewis Ranieri, and Raymond Dalio, president of Bridgewater Associates. After the meetings, the US Fed stunned markets by cutting its discount rate by 50 basis points to 5.25%.

Bernanke’s decision to meet with Ranieri and Dalio was an interesting one.

Ranieri is best known for his role at Salomon Brothers (and featured fairly prominently in Michael Lewis’ classic book, Liar’s Poker). Growing up in Brooklyn, and without a college education, Ranieri worked his way up from Salomon’s mail room to run its mortgage department (which was the most profitable part of the bank). Ranieri was a mortgage bonds salesman who developed the “collateralized mortgage obligation” (or CDO) and became known as “the father of securitization”. He was later summarily fired by colourful Salomon’s boss, John Gutfreund in 1987, after allegedly falling out with Gutfreund and former Salomon President, Tom Strauss.

Ranieri faded from public view after leaving Salomon, but later struck it rich with his Hyperion private equity fund. The fund made a fortune in 2000 when it sold Texas-based Bank United to Washington Mutual for US$1.5 billion.

However, not all of Ranieri’s plays have been quite as successful as Hyperion.

Ranieri is the Chairman of American Financial Realty Trust (and has been chairman since the trust listed in 2003). American Financial sought to purchase property and securitize rental payments. The Trust listed at $14.85 per share in 2003. Its performance since then certainly couldn’t be described as outstanding. Yesterday, the listed trust closed US$7.43 per share – around half of its float price.

Ranieri also received unfavorable media attention when it was revealed that as Chairman of Computer Associates, he racked up US$160,000 of airfares for himself and his wife on the company dime. Ranieri later agreed to relinquish US$187,500 in director’s fees following the controversy.

Finally, Ranieri was a director of another property trust called Reckson Associates. Reckson was, according to Investment Dealers Digest, subject to “at least nine shareholder lawsuits for breach of fiduciary duty” arising out of the sale of assets to former board members for below market value. Ranieri was a director of Reckson at the time of the sales.

Meanwhile, Bernanke’s other informal advisor, Raymond Dalio (who is estimated to be worth upwards of US$4 billion by Forbes), was recently in the business press in a different sense. If you are wondering how Dalio made his money, the answer may lie in the fact that last year, he was paid US$350 million to run a hedge fund. Proving that success and wealth aren’t always closely correlated, Dalio’s fund returned a pitiful 3.4% (well below the benchmark index which was up just over 18% last year).

Ranieri is no doubt one of the finest minds that Wall Street has produced, and Dalio manages more than US$30 billion in assets. However, it is fair to question why the chairman of the Federal Reserve is taking advice from significant players, with colourful histories, who happened to have a fair bit riding on the Fed’s decision.