The British National Party's Richard Barnbrook faces a six month suspension as City Hall considers whether found he brought his office, the GLA and his council into disrepute.
The London Assembly member and councillor at Barking and Redbridge admitted knowing that murder claims he made on YouTube were false.
He wrongly stated on a video that three murders had taken place in the East London borough when in fact the trio were on life-support.
Breach of code - Standards Board for England?
Under section five of the code, assembly members are warned they must not conduct themselves in a manner which could reasonably be regarded as bringing their office or authority into disrepute.
As well as a suspension, being forced to apologise, and undergo training he could face the Standards Board for England who may impose tougher sanctions.
Valerie Rush, executive member of Barking and Dagenham with responsibility for safer neighbourhoods and policing, lodged the complaint.
Refused to comment - expresses "regret"
Barnbrook told investigators he knew there had been no fatalities when he stated a young girl had been murdered inside an educational institute and two people had died in knife attacks in the borough in the video clip in September.
The Goresbrook ward councillor declined to comment after receiving "legal advice".
He has "expressed regret" over the false claim but refused to issue an unequivocal apology.
"Came out wrong" but recoding was not live
He claimed he had meant to say the young girl was from Barking and Dagenham but murdered in Newham and that it "came out wrong" because of the "speed of delivery".
But the investigation showed the video had not been a live recording and he had refused to take it down.
A GLA report on the murder claims stated:
"We find that Mr Barnbrook has failed to comply with the code of conduct of both the GLA and the London Borough of Barking and Dagenham, by bringing his office and the respective authorities into disrepute.