For nearly two years, the Government has been investigating possible trading fraud on the Chicago Merc and the Board of Trade, the nation's largest commodities markets.

The bank incurred a net loss of 4.9 billion euros-said to be the largest trading fraud in banking history.

Gary G. Lynch, the attorney who conducted the investigation into trading fraud at Kidder, Peabody & Company, is no stranger to the misdeeds of Wall Street.

The trial is the first stemming from the extensive undercover inquiry of trading fraud in Chicago's futures markets.

LEAD: After a 12-week trial, a Federal jury convicted two Wall Street arbitragers yesterday of insider trading, fraud and other counts linked to the so-called Yuppie Five scandal.

Daiwa Admits Fraud Daiwa Bank agreed to pay $340 million, pleading guilty to charges it covered up a trading fraud.

Federal prosecutors told more than a dozen brokers in Chicago that they had concrete evidence of one type of trading fraud, defense lawyers said.

Earlier he had been under pressure having assumed the full responsibility for the USD 2.3 billion loss resulting from a trading fraud.

Three former futures traders accused in the Federal Government's undercover investigation of trading fraud in Chicago's futures markets are scheduled to go on trial here on Tuesday.

At the time of the loss it was the largest trading fraud in history.