A major hedge-funder in prison for insider trading is being sued by his brother for $14.5 million

NEW YORK (Reuters) - Galleon Group founder Raj Rajaratnam, who is serving an 11-year prison term for insider trading, and his hedge fund have been sued by his younger brother for $13.5 million he claims is owed him in unpaid commissions and legal costs.

Rengan Rajaratnam, who in 2014 was cleared of criminal insider trading charges following his older brother's conviction three years earlier, filed the lawsuit on Wednesday in New York state court.

In the lawsuit, Rengan Rajaratnam, 45, said Galleon failed to pay him $8.3 million on profits of $83 million he made for the hedge fund as a portfolio manager in 2009.

He said Galleon also wrongly did not pay him up to $1 million for telecommunications stock recommendations he made in his other role as an analyst, and also failed to advance his legal fees and costs during the insider trading case.

As a result, Rengan Rajaratnam said he had to pay $2 million in legal fees out-of-pocket and may owe another $2 million. Galleon also failed to help cover any of the $840,000 civil settlement he reached with the U.S. Securities and Exchange Commission after his acquittal, the lawsuit said.

Lawyers for Raj Rajaratnam and Galleon, which wound down in 2009 after its founder was charged, did not respond to requests for comment Thursday.

Rengan Rajaratnam was indicted in 2013 on charges that he had participated in an insider trading scheme with his brother involving technology companies Clearwire Corp and Advanced Micro Devices Inc in 2008.

Rengan Rajaratnam's July 2014 acquittal in the criminal case represented the first trial loss in an insider trading crackdown pursued by Manhattan U.S. Attorney Preet Bharara. The crackdown has led to 96 people being charged since 2009.

Raj Rajaratnam, 58, was found guilty at trial in 2011 of engaging in an insider trading scheme that resulted in $63.8 million in illicit profit.