Board Thread:Lore Discussion/@comment-71.61.178.23-20130722105712/@comment-24489208-20130913194740

UESP, page on the lore of the Skeleton Key:

"Some time before 4E 201, the Key was stolen from the Twilight Sepulcher by Mercer Frey, a corrupt Nightingale. Its long-term loss resulted in a decline of the Skyrim branch of the Thieves Guild due to bad luck without Nocturnal's influence. The guild's influence declined until their only presence was in the Ratways beneath Riften. Mercer used the Key to bring himself luck, but he was eventually confronted by the Nightingales beneath the Great Statue of Irkngthand."