First Fidelity Securities Corp.'s decision to settle fraud charges involving its municipal bond underwriting activities shouldn't be a major setback for its new parent, First Union Corp., or for the banking industry at large, experts said Wednesday.

The broker-dealer is paying $2.3 million to settle Securities and Exchange Commission charges that two former employees gave kickbacks to a New Jersey government official and an adviser to secure lead underwriter status in certain bond offerings. The unit - whose parent, First Fidelity Bancorp., merged with First Union Jan. 1 - neither admitted nor denied wrongdoing.

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