Manly are facing a hefty fine but have been spared the prospect of losing competition points after the NRL accused the club of salary cap breaches.
The Sea Eagles vowed to defend themselves against the allegations of salary cap rorting over the last five years following the NRL's announcement on Monday that the club had been issued with a breach notice.
The NRL said the Sydney northern beaches club was facing a "significant" penalty after the integrity unit concluded its investigation.
Two officials, accused of orchestrating the scheme, have been handed show-cause notices and face being deregistered.
Manly are accused of making some payments to players that weren't declared under the salary cap.
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If that is proven, any money promised to players for the 2018 season will be included in next year's salary cap, meaning they could be forced to shed players.
This could have a significant impact on the club's pursuit of a replacement for playmaker Blake Green, who was released to join the Warriors.
The club had flagged its interest in Todd Carney and Trent Hodkinson however an adjusted salary cap would rule them out of the running.
Manly CEO Lyall Gorman said the club planned to defend the charges.
"Based on our legal team's preliminary review, there is disagreement with several of the NRL findings and consistent with our rights under the NRL rules and regulations have commenced a path of legal review and response," Gorman said.
"As we have consistently stated, if there are historical compliance issues, we will work both internally and with the NRL to identify those issues and remedy them."
The club has five days to respond however Gorman indicated they would be asking for an extension.
It's believed that Manly's salary cap breaches are not as serious as the ones which led to Parramatta being stripped of premiership points and fined $1 million in 2016.
Because the Sea Eagles are in a position to be cap compliant in 2018, they are not facing being stripped of premiership points.
Allegations of players accepting secret payments came to light during a long-running NSW Police Organised Crime Squad investigation into match-fixing.
While Strike Force Nuralda could find no evidence that four Manly games in 2015 and 2016 had been fixed, other revelations came to light.
