The French striker was being investigated for performing the 'quenelle' gesture after scoring in a Premier League match against West Ham United on December.
The symbol was determined to be anti-Semitic however Anelka argued that it was actually anti-establishment, in support of a French comedian friend, which lead to a personal hearing.
The hearing has found that Anelka is guilty and will now serve a five-match ban, pay an £80,000 fine and has been ordered to complete a compulsory education course.
An official FA statement read: "An Independent Regulatory Commission has found an aggravated breach of FA Rule E3 against Nicolas Anelka.
"Mr Anelka has the right to appeal the decision. Mr Anelka must notify The FA of his intention to appeal within seven days of receipt of the written reasons.
"The penalty is suspended until after the outcome of any appeal, or the time for appealing expires, or Mr Anelka notifies The FA of his decision not to appeal."
"West Bromwich Albion treats very seriously any such allegation which includes any reference to ethnic origin and/or race and/or religion and/or belief," read a statement on the club's official website.
"Upon both charges being proven, the club has suspended Nicolas Anelka pending the conclusion of the FA's disciplinary process and the club's own internal investigation.
"The club acknowledges that the FA panel 'did not find that Nicolas Anelka is an anti-Semite or that he intended to express or promote anti-Semitism by his use of the quenelle'.
"However, the club cannot ignore the offence that his actions have caused, particularly to the Jewish community, nor the potential damage to the club's reputation."
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