Beyond the Match: Can Mosaic's MERIT System Fix Trading's Hidden Flaws?

NEW YORK, NY – April 27, 2026 – A new alternative trading system (ATS) launched today, aiming to rewire the fundamental logic of market interactions. Mosaic ATS, the brainchild of electronic trading veterans John Cosenza and Joe Wald, has gone live with a novel interaction model driven by a proprietary scoring system called MERIT (Market Execution Rating for Informed Trading). Instead of matching orders based solely on the decades-old logic of price and time, Mosaic’s platform prioritizes "trading compatibility," a move designed to tackle the costly and often invisible risks that plague investors long after a trade is executed.

The launch introduces a compatibility layer into the US equities market, a crowded space with over 30 competing ATSs, or dark pools. Yet, Mosaic’s founders argue that the market doesn't need another venue, but an entirely new way to interact. Their system promises to analyze and rate the behavior of counterparties to facilitate higher-quality matches, directly addressing a problem that has become more acute as markets have grown faster, more fragmented, and more complex.

The Market's "Blind Spot"

For years, the primary goal of trading venues has been to execute trades at the best available price as quickly as possible. However, this focus on the moment of the match ignores the critical aftermath. Institutional investors moving large positions often suffer from post-trade "buyer's remorse" as the market moves against them, a phenomenon known as adverse selection. This occurs when their orders interact with more informed, short-term participants who exploit the information imbalance. Other significant risks include footprint leakage, where an institution's trading intentions are unintentionally revealed, and signaling risks, where predatory algorithms detect and trade against a large order.

"Market centers have been engineered to optimize the match – but trading performance lives in the minutes and hours that follow," said John Cosenza, Co-CEO of Mosaic Platforms, in a statement. "This disconnect between system design and trading intent is a non-trivial market blind spot."

These challenges are amplified by modern market structure. As Cosenza noted, the trend of "higher quality liquidity" being internalized by large broker-dealers means the orders that reach the broader public market are often more difficult to trade, increasing the potential for negative outcomes. While the industry has made strides in improving execution metrics on small "child" orders, Mosaic contends that the larger, more strategic "parent order problems" have been left unsolved.

A New Model Based on MERIT

At the heart of Mosaic’s approach is MERIT, its independent, quantitative compatibility scoring system. The platform segments its order book into two distinct classifications—investors and risk providers—and systematizes the context of each order to measure its potential price effects on counterparties. This proprietary score then becomes the primary criterion for a match to occur. The goal is to create compatible pairings that protect an investor's footprint and minimize the information leakage that leads to poor post-trade performance.

This marks a significant departure from traditional dark pools, which primarily offer anonymity to reduce market impact but still operate on a price-time matching logic. Mosaic’s system doesn't just hide orders; it actively seeks to curate better interactions.

"Matching models optimize price and time availability – without accounting for what happens next. MERIT changes that and allows investors and risk providers to share meaningful value, driving two-sided network effects and compounding performance benefits," said Joe Wald, Co-CEO of Mosaic Platforms. "We believe this represents the next evolution for market centers."

By focusing on compatibility, the platform aims to create a more trusted ecosystem where long-term investors and legitimate liquidity providers can interact with greater confidence, reducing the hidden costs associated with trading in a fragmented and high-speed environment.

The Pioneers' Playbook

The vision behind Mosaic is anchored by the extensive experience of its co-founders, who are widely regarded as pioneers in electronic trading. Their careers have not only tracked but actively shaped the evolution of market structure over the past three decades.

John Cosenza brings a 25-year track record from the highest levels of global markets. During his tenure at Goldman Sachs as Head of Electronic Trading in the Americas, he was instrumental in growing the firm's U.S. equity ATS into one of the largest market centers globally. His deep involvement in market structure is further evidenced by his board memberships at IEX, Bids Trading, and PureStream. Before Goldman, he led the electronic trading division at Cowen Group after it acquired Algorithmic Trading Management (ATM), a firm where he was a key executive.

Joe Wald complements this with a powerful entrepreneurial history of identifying market inefficiencies and building technological solutions. He co-founded and served as CEO of Clearpool Group, an algorithmic trading platform that was acquired by BMO Capital Markets in 2020. Before that, he co-founded EdgeTrade Inc., a trailblazer in agency-only, liquidity-seeking algorithms that was acquired by Knight Capital Group in 2008. His career has been defined by a continuous drive to give traders more control and transparency.

This combined experience—spanning market-making, agency trading, platform building, and strategic leadership—provides Mosaic with a unique depth of credibility. The new platform is not an outsider's experiment but an insider's solution to problems they have witnessed firsthand.

Navigating a Crowded and Complex Field

Launching a new trading venue is a formidable challenge. The primary hurdle is the classic "chicken-and-egg" problem: a venue needs participants to create liquidity, but participants are only drawn to venues that already have it. Furthermore, convincing broker-dealers to undertake the technical integration and traders to adopt a new behavioral mindset presents a significant barrier.

Mosaic appears to have anticipated these challenges. The company has secured strategic investments from industry heavyweights Guggenheim Securities and RBC Capital Markets. Crucially, RBC has already signaled its intention to be an "early adopter," a powerful vote of confidence that could help jumpstart the initial liquidity pool. In a statement, RBC's Head of US Cash Equities Execution, Doug Crofton, noted that Mosaic is "strategically positioned to improve performance."

To handle the immense technological lift, Mosaic has partnered with Nasdaq, leveraging its Eqlipse Trading technology for market infrastructure and surveillance. This allows Mosaic to focus its resources on its key differentiator: the MERIT matching logic. While the platform operates as a fully regulated FINRA/SIPC member, its unique approach adds a new dimension to the regulatory concept of "best execution." The industry will be watching closely to see if a more compatible match can be proven to deliver a superior outcome for investors, potentially setting a new standard for how trading performance is measured and achieved.