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The European Union is re-evaluating its antitrust probe into whether 13 of the world’s biggest banks conspired to shut exchanges out of the credit-default swaps market after a series of mishaps nearly derailed the four-year-old case, according to people familiar with the matter.

EU officials are weighing whether to send a revised antitrust complaint to smooth over cracks exposed at a May 2014 hearing, said one of the people, who asked not to be named because the matter is confidential. The review is nearly finished and regulators aim to decide on the next steps within a couple of months, the person said.

“The European Commission wouldn’t consider sending a new statement of objections if there wasn’t a hole in the case,” said John Schmidt, a lawyer at Shepherd and Wedderburn LLP in London. If the EU goes ahead, that means the banks did “a good job of closing down one door but not all doors.”

Goldman Sachs Group Inc., Bank of America Corp. and Deutsche Bank AG are among a group of banks accused of colluding to prevent exchanges from entering the credit default swaps business from 2006 to 2009. The EU’s swaps case added another potential scandal for the banking industry whose reputation was tarnished by worldwide probes into rigging the London interbank offered rate.

Royal Wedding

The CDS investigation was announced on April 29, 2011. The commission took the unusual step of naming the banks, and announced it on a holiday in the U.K., which was celebrating the marriage of Prince William to Kate Middleton.

The main part of the probe centered on allegations that banks abused their leverage over data provider Markit Group Ltd. and the International Swaps & Derivatives Association to block Deutsche Boerse AG’s Eurex and CMDX, a CDS electronic trading platform planned by the CME Group Inc. and Citadel Investment Group Inc., to maintain more lucrative over-the-counter trading.

The EU regulator went on the offensive with a 2013 statement of objections, which also targeted banks including JPMorgan Chase & Co., Citigroup Inc. and HSBC Holdings Plc.

A statement of objections allows the European Commission to set out its case, laying out where officials suspect a company has violated competition rules and citing evidence from complainants. The move took many by surprise and recipients soon set about attacking it.

One flaw that bank lawyers identified is that while the EU saw CME as a victim, investigators didn’t quiz the exchange before sending its complaint, according to some of the people.

During a six-day hearing in May 2014 lawyers also argued that officials had taken information out of context and wrongly relied on thin evidence that didn’t clearly prove that customers were harmed by the failure to develop central clearing for CDS, according to four of the people.

Possible Fines

Usually after a hearing the EU would move to the penalty stage. Instead, officials were forced to re-open the investigation and carry out a document-review at CME and at the banks, two of the people said.

There were other problems in the case. These include the freezing of a parallel probe into CDS clearing for lack of proof in 2012 and inadvertent leaks of evidence in the remaining investigation.

A handful of companies including Goldman Sachs, Deutsche Bank, Markit and ISDA met earlier this year with advisers to new EU Competition Commissioner Margrethe Vestager in an extra attempt to attack the EU case, according to people with knowledge of the meeting.

Another statement of objections “could push any decision into next year,” said Jeremie Jourdan, a lawyer at White & Case LLP in Brussels, who’s not involved in the probe.

Credit Crisis

Credit-default swaps are derivatives used to hedge against losses or speculate on companies’ ability to repay their debt. The contracts traded privately before the credit crisis in 2008, and allowed risk to build in the global financial system, leading to the U.S. bailout of American International Group Inc. Regulations enacted in the U.S. and Europe since then require most swaps to be backed by clearinghouses to lessen the effects of a default on the broader marker.

A key argument in the EU’s cases focuses on whether ISDA may have blocked CME from using its auction Final Price, a tool used to value debt tied to a CDS contract when a default occurs, three of the people said.

European lenders also under investigation by the EU in the CDS case are Barclays Plc, BNP Paribas SA, Credit Suisse Group AG, Royal Bank of Scotland Group Plc. and UBS Group AG. The other U.S. banks are Morgan Stanley and Bear Stearns Cos., which JPMorgan acquired in 2008.

Futures Exchange

All 13 banks, as well as Markit, ISDA, Deutsche Boerse, CME and the commission, declined to comment.

Markit “may be subject to substantial fines” depending on the outcome of investigations, including the EU’s probe and a parallel one conducted by the U.S. Justice Department’s antitrust division, the data provider said Wednesday in a U.S. regulatory filing.

Banks have argued that different companies are concerned with different parts of the case and are challenging the EU’s bid to connect the initiatives with alleged attempts to hinder Liffe, a futures exchange now owned by Intercontinental Exchange Inc., some of the people said.

(Updates with Markit filing in 19th paragraph.)