Blackpool have been fined £25,000 by the Premier League for fielding an understrength side against Aston Villa last November.
Manager Ian Holloway sparked controversy when he made 10 changes for the Villa Park clash on November 10 in order to rest players during a busy week.
The club issued a statement this afternoon to confirm they had been found guilty of breaching Premier League rules B13 and E13 and now have 14 days to appeal.
Holloway was almost vindicated as his makeshift team were narrowly beaten 3-2 after a last-minute goal from James Collins.
After the game Holloway was unrepentant about his team selection and threatened to resign if punished by the Premier League.
It remains to be seen if he will keep to his word, but he did later qualify that by saying he would only go if chairman Karl Oyston agreed it was in the club's best interest.
Blackpool's statement read: "Blackpool Football Club can confirm the Premier League Board has found the club guilty of breaches of Rules B.13 and E.20 in relation to the team fielded by the club in its fixture against Aston Villa on 10 November, 2010.
"As a result of this breach of rules Blackpool FC has been fined £25,000."
It continued: "In reaching a decision the Board took into account the team fielded by Blackpool in its match against West Ham United on November 13, 2010 and in subsequent league matches."
Premier League rules now stipulate that all clubs must select from a 25-man squad.
Holloway argued that because he had fulfilled this obligation a case for fielding an understrength side could not be mounted against him.
However, the Premier League - who punished Wolves for a similar offence last season - have said they consider this an extreme case.
The statement added: "The board was also mindful of the fact that as recently as June 10, 2010, following the introduction of the league's new homegrown player and squad rules, the clubs considered but ruled out removing Rule E.20 and the board is therefore committed to applying it in such extreme cases."
The club have also confirmed that Holloway's team selection for their FA Cup third-round loss at Southampton was also taken into consideration before the verdict.
Holloway made nine changes for that game earlier this month as he prioritised a Premier League game against Liverpool the following week.
He effectively said he was prepared to write off the FA Cup because his team had little chance of winning the competition and avoiding relegation should be his prime aim.
The statement added: "The board also considered the team fielded in the FA Cup third-round tie versus Southampton and Ian Holloway's comments concerning the team selected for that game."Reuse content