FINRA Exam Test With Complete Solution
Mediation - ANSWER Arbitration and ______ are two distinct methods of resolving
securities disputes between two or more parties. Disputes, claims or controversies arising
out of business dealings with any FINRA brokerage firm can be resolved in arbitration or
______.
Arbitration - ANSWER ______ is a formal dispute resolution process in which the
parties—customers, brokers, or brokerage firms making or responding to a claim—select
a neutral, third party called a(n) ______, to listen to the arguments set forth by parties,
study the testimonial and/or documentary evidence, and render a decision on the matter.
By ______ your claim, you forego the opportunity to have the same matter decided by a
court of law because an ______ award is final and binding.
Mediation - ANSWER ______ is an informal, voluntary and non-binding process. A(n)
______ facilitates negotiations between disputing parties. The ______'s role is to help the
parties find a mutually acceptable solution to the dispute.
First - ANSWER Arbitration and mediation are important methods of dispute resolution
that have been used successfully by the securities industry and others, but they generally
should not be your ______ steps.
Arbitration - ANSWER ______ is a method of resolving a dispute between two or more
parties by neutral, qualified individuals, who serve as decision-makers after weighing the
facts of each case presented. The decision-makers are called ______. ______ of securities
disputes against brokerage firms, brokers, or both provides a prompt and inexpensive
means of resolving issues. There are certain laws governing the conduct of an ______
proceeding. The most important of these is perhaps the fact that an ______ award is final
and binding, subject to review by a court only on a very limited basis. Parties should also
recognize that ______ their claims precludes them from pursuing the same claims through
the courts.
,Request for Mediation - ANSWER You may file a ______ ______ ______ at any time,
whether or not you have already filed an arbitration claim. However, ______ is a voluntary
process — no party is required to ______ a dispute. When we receive your request, FINRA
Dispute Resolution staff will contact the other party or parties to the dispute to explain
the ______ process, and seek their agreement to ______.
Mediation - ANSWER Initiate a ______: This is the first step of the ______ process. When
one party expresses an interest in ______, FINRA will contact the other parties to
determine their interest, The parties may submit all or some of the issues in dispute to
______, and may ______ selected substantive or procedural issues.
Complaint - ANSWER If you file a ______ with the Investor ______ Center, FINRA can
investigate any potentially fraudulent or suspicious activities by brokerage firms or
registered representatives. You must initiate an arbitration or mediation to pursue
monetary damages or other restitution.
Attorney - ANSWER You should consider hiring an ______ to represent you during the
arbitration or mediation proceedings to provide direction and advice. Even if you do not
choose to hire an ______, brokerage firms are generally represented by an ______. If you
cannot afford an ______, some law schools provide legal representation through securities
arbitration clinics. You can also check: (1) American Bar Association;
(2) Public Investors Arbitration Bar Association; (3) Martindale - Hubbell
Database - ANSWER FINRA's Arbitration Awards ______ enables users to search online
for FINRA and NASD arbitration awards free of charge, seven days a week.
Exchanges - ANSWER FINRA provides dispute resolution services for several ______ that
are not able to staff or operate a dispute resolution program. These services include
administration of the ______'s member-member, member-investor and member-employer
securities-industry related disputes. The term "member" may include brokerage firms that
are not members of FINRA.
,Code of Mediation Procedure - ANSWER This Code contains the official FINRA rules
governing mediations. (7 pages)
Statement of Claim - ANSWER The arbitration process begins with a party filing a ______
______ _____ with FINRA. The party who files the ______ ______ ______ is called a
claimant. The party against whom the ______ ______ ______ is filed is called the
respondent. The ______ ______ _____ should provide the details of the dispute, including
relevant dates, names of entities and individuals involved, and the type of relief requested
and the respondents from whom the claimant is seeking relief or damages. The type of
relief a claimant may request, includes, but is not limited to, actual monetary damages,
interest, and specific performance.
Answer - ANSWER An ______ is a written document that specifies the relevant facts and
available defenses to the Statement of Claim. A respondent files an answer to the
claimant's Statement of Claim.
Number - ANSWER The ______ of arbitrators appointed to a case depends on the amount
and type of relief requested in the Statement of Claim.
Initial Prehearing Conference (IPHC) - ANSWER Once the panel is appointed, FINRA
schedules the ______ ______ ______ (______). The ______ is the first time that the parties
and arbitrators meet to set the schedule for the case and usually held by telephone.
During this telephone conference, the arbitration panel will schedule evidentiary hearing
dates, establish discovery deadlines, set briefing and motion deadlines, determine whether
mediation is desirable, and address other preliminary matters.
Discovery Process - ANSWER The ______ ______ allows the parties to obtain facts and
information from other parties to the arbitration in order to support their own case and
prepare for the hearing. The Codes of Arbitration Procedure require parties to cooperate
with each other to the fullest extent practicable in the voluntary exchange of documents
and information to expedite the arbitration process. The Codes contain rules that govern
the ______ ______, including making ______ requests, responding to such requests,
objecting to ______ requests, and arbitrator authority to issue sanctions against parties for
, ______ abuses.
Closing - ANSWER After ______ the record, the arbitration panel considers all of the
evidence, deliberates together, and decides what relief the claimant is entitled to, if any.
Unanimous - ANSWER In a three-arbitrator panel, an award is based on the vote of a
majority of the arbitrators; a ______ decision is not required.
(Rules) Announcements - ANSWER ______ provide recent updates, changes, and
notifications about Dispute Resolution rules, proposals, and procedures.
Filing - ANSWER The party filing a claim must pay a ______ fee at the time the party files
a Statement of Claim. The amount of this fee is based on the total amount of the claim
including any punitive and treble damages requested, but excludes interest and expenses.
Fee waiver - ANSWER Parties may submit a written request for a ______ ______ stating
the reason(s) that would make payment of the filing fee a financial hardship.
In support of the request, parties should include the following information with the
written request:
a copy of the most recently filed tax return;
two of the most recent pay stubs; and
documentation of garnishment or lien, or other documents that evidence hardship.
Refund - ANSWER FINRA will issue a partial ______ of the filing fee, less any fees or costs
owed by that party, if the party notifies FINRA that the case is settled or withdrawn more
than 10 calendar days before a scheduled hearing, Any ______ will be paid directly to the
Mediation - ANSWER Arbitration and ______ are two distinct methods of resolving
securities disputes between two or more parties. Disputes, claims or controversies arising
out of business dealings with any FINRA brokerage firm can be resolved in arbitration or
______.
Arbitration - ANSWER ______ is a formal dispute resolution process in which the
parties—customers, brokers, or brokerage firms making or responding to a claim—select
a neutral, third party called a(n) ______, to listen to the arguments set forth by parties,
study the testimonial and/or documentary evidence, and render a decision on the matter.
By ______ your claim, you forego the opportunity to have the same matter decided by a
court of law because an ______ award is final and binding.
Mediation - ANSWER ______ is an informal, voluntary and non-binding process. A(n)
______ facilitates negotiations between disputing parties. The ______'s role is to help the
parties find a mutually acceptable solution to the dispute.
First - ANSWER Arbitration and mediation are important methods of dispute resolution
that have been used successfully by the securities industry and others, but they generally
should not be your ______ steps.
Arbitration - ANSWER ______ is a method of resolving a dispute between two or more
parties by neutral, qualified individuals, who serve as decision-makers after weighing the
facts of each case presented. The decision-makers are called ______. ______ of securities
disputes against brokerage firms, brokers, or both provides a prompt and inexpensive
means of resolving issues. There are certain laws governing the conduct of an ______
proceeding. The most important of these is perhaps the fact that an ______ award is final
and binding, subject to review by a court only on a very limited basis. Parties should also
recognize that ______ their claims precludes them from pursuing the same claims through
the courts.
,Request for Mediation - ANSWER You may file a ______ ______ ______ at any time,
whether or not you have already filed an arbitration claim. However, ______ is a voluntary
process — no party is required to ______ a dispute. When we receive your request, FINRA
Dispute Resolution staff will contact the other party or parties to the dispute to explain
the ______ process, and seek their agreement to ______.
Mediation - ANSWER Initiate a ______: This is the first step of the ______ process. When
one party expresses an interest in ______, FINRA will contact the other parties to
determine their interest, The parties may submit all or some of the issues in dispute to
______, and may ______ selected substantive or procedural issues.
Complaint - ANSWER If you file a ______ with the Investor ______ Center, FINRA can
investigate any potentially fraudulent or suspicious activities by brokerage firms or
registered representatives. You must initiate an arbitration or mediation to pursue
monetary damages or other restitution.
Attorney - ANSWER You should consider hiring an ______ to represent you during the
arbitration or mediation proceedings to provide direction and advice. Even if you do not
choose to hire an ______, brokerage firms are generally represented by an ______. If you
cannot afford an ______, some law schools provide legal representation through securities
arbitration clinics. You can also check: (1) American Bar Association;
(2) Public Investors Arbitration Bar Association; (3) Martindale - Hubbell
Database - ANSWER FINRA's Arbitration Awards ______ enables users to search online
for FINRA and NASD arbitration awards free of charge, seven days a week.
Exchanges - ANSWER FINRA provides dispute resolution services for several ______ that
are not able to staff or operate a dispute resolution program. These services include
administration of the ______'s member-member, member-investor and member-employer
securities-industry related disputes. The term "member" may include brokerage firms that
are not members of FINRA.
,Code of Mediation Procedure - ANSWER This Code contains the official FINRA rules
governing mediations. (7 pages)
Statement of Claim - ANSWER The arbitration process begins with a party filing a ______
______ _____ with FINRA. The party who files the ______ ______ ______ is called a
claimant. The party against whom the ______ ______ ______ is filed is called the
respondent. The ______ ______ _____ should provide the details of the dispute, including
relevant dates, names of entities and individuals involved, and the type of relief requested
and the respondents from whom the claimant is seeking relief or damages. The type of
relief a claimant may request, includes, but is not limited to, actual monetary damages,
interest, and specific performance.
Answer - ANSWER An ______ is a written document that specifies the relevant facts and
available defenses to the Statement of Claim. A respondent files an answer to the
claimant's Statement of Claim.
Number - ANSWER The ______ of arbitrators appointed to a case depends on the amount
and type of relief requested in the Statement of Claim.
Initial Prehearing Conference (IPHC) - ANSWER Once the panel is appointed, FINRA
schedules the ______ ______ ______ (______). The ______ is the first time that the parties
and arbitrators meet to set the schedule for the case and usually held by telephone.
During this telephone conference, the arbitration panel will schedule evidentiary hearing
dates, establish discovery deadlines, set briefing and motion deadlines, determine whether
mediation is desirable, and address other preliminary matters.
Discovery Process - ANSWER The ______ ______ allows the parties to obtain facts and
information from other parties to the arbitration in order to support their own case and
prepare for the hearing. The Codes of Arbitration Procedure require parties to cooperate
with each other to the fullest extent practicable in the voluntary exchange of documents
and information to expedite the arbitration process. The Codes contain rules that govern
the ______ ______, including making ______ requests, responding to such requests,
objecting to ______ requests, and arbitrator authority to issue sanctions against parties for
, ______ abuses.
Closing - ANSWER After ______ the record, the arbitration panel considers all of the
evidence, deliberates together, and decides what relief the claimant is entitled to, if any.
Unanimous - ANSWER In a three-arbitrator panel, an award is based on the vote of a
majority of the arbitrators; a ______ decision is not required.
(Rules) Announcements - ANSWER ______ provide recent updates, changes, and
notifications about Dispute Resolution rules, proposals, and procedures.
Filing - ANSWER The party filing a claim must pay a ______ fee at the time the party files
a Statement of Claim. The amount of this fee is based on the total amount of the claim
including any punitive and treble damages requested, but excludes interest and expenses.
Fee waiver - ANSWER Parties may submit a written request for a ______ ______ stating
the reason(s) that would make payment of the filing fee a financial hardship.
In support of the request, parties should include the following information with the
written request:
a copy of the most recently filed tax return;
two of the most recent pay stubs; and
documentation of garnishment or lien, or other documents that evidence hardship.
Refund - ANSWER FINRA will issue a partial ______ of the filing fee, less any fees or costs
owed by that party, if the party notifies FINRA that the case is settled or withdrawn more
than 10 calendar days before a scheduled hearing, Any ______ will be paid directly to the
