didsburyblu - do you really think that this is somehow City's fault?
You are responsible for your physical card and for the person who is using it.
If you use the new ticket exchange, your ticket, if sold, means your card is made null and void for entry to the game in question and your legal responsibility for the seat no longer applies.
Due to the stupidity of the idiot that ended up having your card, you have a three game ban that could be extended to life if you, or someone using your card, commits any other offence. Your friend who gave the card away has a huge responsibility for this and if he really was you friend he would offer to write to the club and take the blame with the 'Life ban' threat transferred to him (if he too has a card). That said the club would probably be in their rights to put a life ban threat onto both of you - so that might not be a good idea.
If you feel strongly about the current situation or want to take it forward then it will cost money as you need to contact a solicitor who does conveyancing and should thus know about contract law and can go through your options. That said, unless the idiot you got you the ban comes clean I doubt you have a leg to stand on. Oh and for goodness sake be civil and humble in all dealings with City over this. If you get someones back up at City it could end badly for you in the long term.