The Premier League has charged West Ham with breaching their rules in relation to the signings of Argentine duo Carlos Tevez and Javier Mascherano in August.
Tevez and Mascherano joined West Ham at the end of August
Tevez and Mascherano joined the club in August, but their registration with third party Media Sports Investment may have broken Premier League regulations.
The Premiership strugglers, who are deep in the relegation zone, could be deducted points if found guilty.
The Hammers have announced they will "vigorously defend" themselves.
A points deduction would almost certainly condemn West Ham to the Championship - they currently sit 19th in the table, nine points adrift of safety.
Tevez and Mascherano joined West Ham on 31 August from Brazilian side Corinthians, but the deal was brokered by MSI, who owned the rights to the two players.
The Hammers reportedly failed to hand over vital documentation to the Premier League and have been charged under rule U18 concerning the influence of third-party ownership.
But the club released a statement on Friday, which read: "In light of the legal advice received, the club will vigorously defend itself against the charge and provide a detailed response as requested by the Premier League."
Midfielder Mascherano, who made seven appearances for West Ham, has since left Upton Park for Liverpool.
While striker Tevez has played 13 games for the Hammers, but is yet to score.
The Premier League said in a statement: "It is the board's complaint that there were agreements in relation to both these transfers that enabled third parties to acquire the ability materially to influence the club's policies and/or the performance of its teams in League matches and/or the competitions set out in Rule E10.
"The board's view is this constitutes a breach of rule U18.
"Furthermore at the time of the transfer agreements for both Carlos Tevez and Javier Mascherano, and until 24 January 2007, West Ham failed to disclose the third party agreements to the Premier League and/or deliberately withheld these agreements from the Premier League.
"The board's view is this constitutes a breach of rule B13, which states 'In all matters and transactions relating to the League each club shall behave towards each other club and the League with the utmost good faith'.
"West Ham United has 14 days within which to respond to these charges."
AFC Wimbledon are currently appealing an 18-point deduction for fielding an ineligible player in the Ryman Premier Division.
Those points were accrued in the 11 games which figured midfielder Jermaine Darlington, who did not have international clearance.
West Ham have only picked up five points in games featuring Tevez or Mascherano.