Wall Street had computers. It also had people writing trades on paper, typing the same information into different systems, and sorting out the disagreements afterward. To Seth Merrin, this arrangement seemed to have one conspicuous merit: it offered someone an opportunity to replace it. An expensive habit had acquired the dignity of a procedure. He was insufficiently impressed.
In 1985, he founded Merrin Financial. Its order management, compliance and electronic routing systems helped move the institutional trading desk from paper to software. Decades later, he would return to that episode when explaining his approach to business. The useful question was why an accepted process existed at all. The personal computer was available. The willingness to reconsider the work was harder to find.
That question followed him into Liquidnet, the institutional trading network he co-founded in 1999 and launched in 2001. It follows him now into Claritai, where he is founder and CEO. Different technology, different customers, familiar irritation. Merrin has made a career of treating business inconveniences as invitations that everyone else has politely declined.
A political science degree meets the trading desk
There was no ancestral software empire waiting for him. His father, Edward Merrin, ran an ancient-art gallery on Fifth Avenue; his grandfather had a jewelry business. Objects, customers, judgment and entrepreneurship were familiar territory. A global electronic market was a departure.
After the Bronx High School of Science, Merrin spent a precollege year in Israel, participating in a program involving work and philanthropic projects. At Tufts, he studied political science. The education matters to the portrait: his route into financial technology began with an interest in the world, rather than a computer science credential.
He worked as a risk arbitrage trader at CIBC Oppenheimer before starting his first company. By 1996, Merrin Financial had been sold to ADP. In 1997, he co-founded VIE Systems, which worked on integrating financial services applications. The problems kept changing their clothes, but information that failed to move cleanly between people and systems remained a recurring acquaintance.
Adoption was hardly automatic. An early account of Merrin Financial describes a trading platform developed in 1987 and a first customer signing in 1990. Those dates put some useful friction into the polished founder story. Recognizing a problem, building a product and persuading somebody to pay for it are three separate appointments. Customers have a habit of arriving late.
How to sell a large position without announcing a parade
Liquidnet addressed a problem of scale and discretion. A fund manager handling a large stock order could move the price against itself while trying to complete the trade. Finding another institution willing to take the other side could involve intermediaries and the risk of revealing too much along the way.
For a pension fund, that execution cost ultimately belongs to people whose retirement savings are being managed. Merrin’s argument was that the institutions had outgrown the market arrangements serving them. Large customers were trying to conduct wholesale business through infrastructure that did not adequately accommodate their size.
Liquidnet connected institutions electronically so they could find trading interest and negotiate large transactions anonymously. In plain English, it offered a way to locate the other large buyer or seller without first telling the entire room what you wanted. Discretion became part of the product.
Merrin was outspoken about market structure. In a 2012 interview, he distinguished between high-frequency trading generally and activity he considered predatory toward institutional orders. He also resisted the suggestion that regulatory shortcomings could simply be explained as corruption. His diagnosis was more practical: regulators struggled to keep ahead of rapidly changing markets while dealing with each new emergency.
He wanted the underlying arrangements reconsidered. The same instinct that had made handwritten tickets seem unreasonable now made him ask whether wholesale and retail investors needed different trading environments. It was an argument about who a market was designed to serve.
The first 38 mattered
Liquidnet began with 38 buy-side firms. By 2017, its network had grown to more than 850 firms trading across 44 markets. That growth tells a more useful story than a solitary launch date: a network becomes useful when enough of the right people agree to participate.
For Merrin, the work also required keeping the company technically alert. Roughly a third of Liquidnet’s more than 400 employees were technologists in 2017. A trading venue could not afford to regard its software as a finished piece of office furniture.
His willingness to discuss errors is part of the appeal. “I made tons of mistakes,” he said in 2017. He had put the experience into a book, The Power of Positive Destruction, written with Carlye Adler. A founder admitting mistakes is welcome; a founder admitting enough to require a book is rather more promising.
A book with an impolite question
Published by Wiley in late 2016, the book moves from identifying an opportunity to building an advantage and leading a business. Its table of contents includes a chapter called “Ask WTF.” The language is economical. Few strategy committees could improve it by adding a slide.
Merrin’s examples reach beyond finance. Discussing the book in 2017, he pointed to businesses borrowing useful ideas from other industries, including a cement company applying just-in-time principles. The attraction was practical transfer: an approach already working somewhere else might expose an unnecessary limitation at home.
He urged founders to examine what customers endured as routine. Technology could make a different arrangement possible, but the starting point remained a concrete inconvenience. His interviews kept returning to that order of operations: understand the problem, then decide what deserves to be built.
At Liquidnet Labs, this philosophy acquired a rather less literary form: traders trying prototypes and giving feedback. Members could submit ideas, test concepts and attend sessions with products still being developed. Merrin described people coming after their workday to spend hours at the keyboard. The customers were helping determine whether the clever idea was actually usable.
There is a pleasing tension here. He likes questioning conventions, yet gives the intended user a seat in the workshop. A blank slate is useful at the beginning. Eventually, someone has to trade on it.
The company culture came with homework
Merrin’s interest in education continued well beyond his own degree. He joined the Tufts board of trustees in 2004, supported scholarships and returned to speak to students. At a 2009 campus lecture, students heard about discipline, charity and continuing education as company values.
Liquidnet’s employees were expected to take continuing education classes through its corporate university. The detail gives his enthusiasm for reinvention a daily consequence. It is easy to advise an organization to keep learning. Putting learning into the calendar makes the advice considerably less decorative.
The students also noticed his attention to their questions. One described how he tried to understand where the questioner was coming from. For someone building networks, that is a useful interpersonal habit: the person across the table may be bringing information your own screen does not contain.
“Business is just a set of problems to solve.”Seth Merrin, The Power of Positive Destruction
A village, and a careful allocation of credit
His philanthropic work includes Agahozo-Shalom Youth Village in Rwanda, established with Anne Heyman. In explaining its origins, Merrin credited Heyman with investigating how an Israeli youth-village model could be adapted to Rwanda. He described her as the driving force, and his own contribution as comparatively small.
The project combined a home, a community and an education. Liquidnet’s involvement extended to employees, and even their families, participating in social engagement. Merrin described matching donations and volunteer time, and giving new staff a charitable gift card after orientation. Giving had been assigned an entry point in the working day.
He recalled visiting students who, after months at the village, were presenting lessons to visitors in English using PowerPoint slides they had made. The businessman accustomed to demonstrating software had become a member of the audience. It is a detail worth keeping: education had produced something people could show him.
Another industry, another accepted inconvenience
In February 2020, Brian Conroy succeeded Merrin as Liquidnet CEO, while Merrin moved into the executive chairman role. TP ICAP completed its acquisition of Liquidnet in March 2021. By the sale agreement, the network served more than 1,000 buy-side clients across 45 markets. The small opening circle had become a substantial international business.
Merrin then joined Neuravest as executive chairman, working with co-founder and CEO Erez Katz on AI-driven portfolio construction. His attention had moved toward helping institutions make sense of growing quantities of data, an extension of his long interest in how investment work gets done.
His current venture, Claritai, turns toward service industries, starting with accounting. Its stated approach combines technology, operational change and co-investment. Its first solution, NEO, is intended to help accounting firms offer financial intelligence to small businesses. Jennifer Merrin is a co-founder.
These are the company’s ambitions, with results still to be earned. They fit the pattern of his earlier work: find a familiar business process, examine what new tools allow, and reconsider the service itself. Four decades after founding Merrin Financial, he is again asking established businesses to entertain an inconvenient possibility. Perhaps the accepted way of working is simply overdue for a better question.