A spokesman for the New York Police Department confirmed to the news outlet that the 35-year-old actor was charged with two misdemeanors: the criminal possession of a controlled substance (cocaine) and criminal possession of marijuana.
Officers reportedly watched the married father of two smoke marijuana from an e-cigarette while standing outside a building on West 48th Street in Manhattan at around 10:46 p.m. He was placed under arrest and searched by officers, who then found a small amount of cocaine in his possession.
Pally, who currently stars in the Fox comedy Making History with Leighton Meester, has since been released. According to the NYPD, he was issued a desk appearance ticket and released once his arrest had been processed, but must return to court in June.
The actor, who has also appeared in Dirty Grandpa and Iron Man 3, has not yet publicly commented on his arrest, but has been active on Twitter since Tuesday night.
Pally had spent much of the week preparing for his role as male lead Billy in the upcoming film Most Likely to Murder, which was been billed as a "Rear Window for stoners." Pally stars opposite Crazy Ex-Girlfriend's Rachel Bloom in the film, which began filming yesterday, the day after his arrest. His character is a man who tries to solve the murder of his former high school classmate's mother.
He's also been making the late-night talk show circuit in recent weeks. In early March he entered the Jimmy Kimmel Live! set in a giant hamster ball, and a week later he joked about getting fired by Ellen Burstyn while on speakerphone with his dad during an appearance on The Late Late Show with James Corden.
Pally's representatives have not yet responded to our request for comment about his arrest.