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Oscar-winning actress TATUM O'NEAL has been charged with misdemeanor drug possession following her arrest Sunday on suspicion of purchasing cocaine on a Manhattan street.

O'Neal, who arrived at the court wearing a gray tank top and her hair tied back in a pony tail, was arraigned Monday and released on her own recognizance after a brief hearing. Her next court date is July 28th. She was seen laughing and talking to court officers. 

A criminal complaint said a police detective recovered two plastic bags of cocaine from her right front pants pocket. The dealer who allegedly sold the drugs was also arrested and will be charged with a felony. 

O'Neal, the daughter of actor RYAN O'NEAL, won an Academy Award in 1973 for Best Supporting Actress for her role in 'Paper Moon.' In addition to her recent "Dancing with the Stars" stint, she has made regular appearances on the cable television series "Rescue Me" and starred in the feature film 'Saving Grace B. Jones,' directed by CONNIE STEVENS and due out later this year.

In a statement to ET, Connie says, "I have the utmost faith in Tatum. She made an impulsive choice which was a bad choice, however, everyone deals with things the way they deal with them. I know she will conquer what seems so insurmountable in her longtime recovery. Tatum is a delight and a part of my family. She was so brilliant in the upcoming film I directed, 'Saving Grace B. Jones.' People will be astonished at her work and I am doing everything in my power to get it released soon so people will truly see her true brilliance. She was a consummate actor and professional while we filmed and immersed herself in the work and wowed us all. She really cared about all of us and the project. I know in my heart she will overcome this obstacle. She's too good."