It seemed like a one-in-a-million shot at the time.

In October 2014, the LSTA filed a lawsuit against the SEC and the Federal Reserve Board, claiming that CLOs should not be covered under Dodd-Frank’s risk retention rules. These rules, arising from the credit crisis, required parties that securitized assets to retain at least 5% equity in those vehicles.

The LSTA, the loan industry’s advocacy organization, argued (among other things) that CLO managers, unlike sellers of student loans or home mortgages, already had economic interests in their vehicles. Additional “skin in the game,” they said, was not required.

On Friday DC Circuit’s Court of Appeals agreed. In a 17-page ruling, the Court decreed that “given the nature of the transactions performed by CLO managers, the language of the statute invoked by the agencies does not encompass their activities.”

Much of the finding reads like a text in advanced semantics. The nuances of terms such as “retain,” “transfer,” and “securitizer” are thoroughly analyzed. The nature of collateralized loan obligations is examined relative to other securitized assets. And the loan syndication process is reviewed with attention to how loans are distributed, who buyers and sellers are, and why this differs from what triggered the Great Recession.