Investment Company and. Variable Contracts Products Principals (Series 26) Practice Exam

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In the event of noncompliance with an arbitration award, what type of sanction could FINRA impose?

Fine
Suspension
Bar
Warning

The correct answer is: Suspension

In the context of noncompliance with an arbitration award, the correct sanction that FINRA could impose is a suspension. When a party fails to comply with an arbitration award, FINRA aims to ensure that its arbitration process remains effective and respected. A suspension serves as a significant measure to hold members accountable and encourage compliance with the decision made by arbitrators. Suspensions can temporarily remove a member from the ability to engage in activities regulated by FINRA, thereby emphasizing the seriousness of adhering to arbitration awards. This action highlights the importance of resolution in disputes and reinforces the integrity of the arbitration process within the financial industry. While fines, bars, and warnings are potential actions that may be associated with various violations, a suspension specifically directly addresses the noncompliance issue in a way that can effectively compel adherence to arbitration results, making it the most fitting sanction in this scenario.