Gamal and Alaa Mubarak, with seven other men, were charged with violating stock market and central bank rules to make unlawful profits through dealing of shares in Al Watany Bank of Egypt.

Mubarak's eldest son, Alaa, is a businessman. His brother Gamal, a former banker, was widely viewed as being groomed for Egypt's top job until Mubarak was toppled in February 2011.

Wearing white prison uniforms, they sat in a steel cage reserved for defendants in the court at a Cairo police academy as a prosecution official read out details of the charges. The other executives wore suits.

"This has absolutely no basis in fact. I deny these charges in whole and in their details," Gamal Mubarak told the judge. His brother said: "Unfortunately, sir, this is all lies and defamation."

Mubarak, 84, was given a life sentence on June 2 in the first trial in an ordinary court of an Arab leader ousted in a popular uprising. Charges against his sons were dropped in that trial because a statute of limitation had expired.

Yasser El Mallawany and Hassan Heikal, board members and joint chief executives officers of investment bank EFG-Hermes , are also charged in the case.

Mallawany looked irritated and unsettled when the judge called his name. He stood after the judge called for him a second time and he rose to his feet, saying: "This hasn't happened sir. None of this is true."

EFG has said it is confident in the "soundness of its legal position" regarding the 2007 acquisition of Al-Watany by National Bank of Kuwait. EFG said it would defend the two executives against the accusations and said the operations of EFG-Hermes had not been affected.

Heikal did not appear in the dock.

Gamal Mubarak took an 18 percent stake in EFG's private equity arm when it was formed in 1997. EFG Hermes Private Equity accounts for no more than 7 percent of EFG Hermes Holding's total consolidated revenues, the bank said.

"We did nothing wrong," former Al-Watany general manager Hussein Fathy, who was not among the accused, told Reuters outside the court.

"When we were approached by the state's largest brokerage company, EFG Hermes, asking us if we would like to sell, we said OK as they made us a good offer," he added.

He said he did not know how Alaa and Gamal Mubarak were linked to the case.

The Mubaraks' lawyer Farid el-Deeb asked for his clients to be released, saying they were arrested for a misdemeanour and not a felony, meaning that, by law, they cannot be in prison for more than six months, which they have already served.

Farid el-Deeb also accused authorities of holding his clients without justification, saying they were being discriminated against simply because of their father's name.

"Why are they the only ones still behind bars? Everyone has been released but them. I ask you, why?" he told the court.

Egypt has witnessed 17 turbulent months since Mubarak's overthrow and has been run by a military council until Islamist President Mohamed Mursi took office on June 30.

In a move that threatens more political uncertainty, Mursi on Sunday risked his first showdown with the army after recalling a parliament full of his allies the generals had dissolved last month.