Please describe two of your most substantial, recent wins in practice.
I worked with FalconX to become the first cryptocurrency-focused swap dealer registered with the Commodity Futures Trading Commission. The move allows FalconX to provide institutional investors access to trading in the fast-growing over-the-counter crypto derivatives market through a CFTC-registered entity. We’ve continued to work with FalconX to expand regulated trading in this market, which is a critical step for the growth of the crypto derivatives industry.
I am also excited to be part of the S&C team handling the landmark FTX bankruptcy, focusing on strategic regulatory interactions, the sales of FTX’s US-regulated subsidiaries and possible reorganization of its offshore exchange. As part of efforts to recoup assets for the estate, I advised FTX on CFTC regulatory matters concerning the sale of its derivatives trading platform LedgerX for $50 million, which was completed in May. To date, the firm has helped recover $7.3 billion in liquid assets for FTX’s creditors.
What is the most important lesson you learned as a first-year attorney and how does it inform your practice today?
It’s incredibly important to be curious and take initiative. Dealing with sophisticated clients on their most critical matters, there rarely is a set playbook where a young associate (or even senior lawyer) can just plug in.
I first encountered this when researching how a private equity client could make an investment in a specialized financial institution in 2007 just as the subprime crisis was developing; there was no treatise or memo that I could just update and repeat back to the partner or the client. Instead, I had to dig into how the target institution was organized and regulated and understand the type of investment my client wanted to make and why.
Ever since then the importance of being curious about the full context of a client’s matter has remained critical to my practice, both on the legal issues involved but often more importantly, the business objectives and context.
How do you define success in your practice?
For me, success usually involves delivering creative solutions that provide long-term foundations for my clients’ businesses. This means navigating difficult and unfavorable terrain to get meaningful practical results that work durably for all stakeholders on a matter, whether it’s a regulatory matter, a transaction, or a litigation.
For example, when we were helping our global banking clients navigate the post-financial crisis regulatory reform agenda, a significant concern related to extraterritorial regulation of their non-US businesses, which the US regulators viewed as a major risk to US financial stability.
An obvious solution would have been for those clients to restructure their operations to minimize cross-border touch points, but this would have had major negative impacts on their businesses. Another approach would have been to push for broad-based exemptions, but this would have been politically unacceptable and easily reversible down the road.
So instead, we developed a framework that carefully identified which rules should apply overseas and which should not, and for those that did apply overseas we argued for US regulators to defer to their foreign counterparts. That framework has now persisted for almost 10 years and been embraced by policymakers across multiple administrations.
What are you most proud of as a lawyer?
I’m most proud of the relationships that I’ve developed. Law practice is fundamentally about interacting with people, understanding, and seeking to address their goals and concerns. It’s not enough just to have encyclopedic legal knowledge or be an expert draftsperson.
So, it’s critically important to be someone who people trust and depend on to exercise careful judgment, be attentive, and act with integrity and respect. And it’s not sufficient to do this with those most senior decision-makers, or just with your own clients and colleagues.
Over time, people get promoted and move from job to job both within and across public and private sectors. So, I’ve sought to live up to these aims in all my professional interactions, and I’m proud of the long-term relationships I’ve developed with clients, colleagues and former colleagues, and policymakers.
Who is your greatest mentor in the law and what have they taught you?
My greatest mentor in the law is Ed Rosen, a now-retired Cleary Gottlieb partner who led the firm’s derivatives practice when I was an associate. I owe many things to Ed, but there are two lessons to which I find myself returning repeatedly. The first is to constantly push yourself; every legal analysis could benefit from at least one more (and usually several more) close reads of the statute, rule or case at hand, and every contract, brief, or comment letter could benefit from one more (and usually several more) edits to make it more precise and concise.
The second is the importance of earning and maintaining credibility. A lawyer who always takes the most aggressive positions for a client will seldom be the most effective negotiator or advocate. Over the longer term, better results will be achieved by taking positions that further the client’s core interests while also recognizing legitimate interests of other stakeholders and the commercial and legal contexts in which the positions are being taken.
Tell us your two favorite songs on your summer music playlist.
“As It Was” by Harry Styles. My wife first started listening to Harry last summer around the time the two of us went on a road trip with our dog, and this song must have been on repeat. I have to say, I didn’t really mind! It’s catchy and well-constructed, and now brings back a lot of fond memories of that trip.
“All My Friends” by LCD Soundsystem. This song addresses that moment in your life when you transition from young adulthood to middle age, and it came out right around the time I graduated from law school. Even though I was still relatively young at the time, the song struck a chord with me. Each time I’ve listened to it in the years since, it continues to reward with new layers of meaning.
Colin Lloyd is a co-head of Sullivan & Cromwell’s Commodities, Futures and Derivatives Group and a partner in its Capital Markets Group. Lloyd often lectures on financial market regulation before the American Bar Association, Columbia University Law School, and elsewhere. He has also published numerous articles on securities and derivatives regulation.
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