From what you say, your brother has a good relationship with your husband. (or at least thinks he does, by the comment about preferring him as a brother to you as a sister) If he truly believes this *rumor* to be factual, then he might believe he is doing the right thing by someone he cares about. If there's no basis for it, and he's just trying to cause trouble than you have every reason to
him. I think he should have talked to you first though.
I feel that people will either believe or disbelieve rumors based on past experience with those involved and the reliability of the source. I have two brothers...one who I love dearly, (and the feeling is mutual) and another, who if he's still alive somewhere I would not waste the energy to spit on. I guarantee you that if the same uncomplimentary rumor were started about me by both, people would consider the source before either believing or disbelieving it. If your brother is in the habit of stirring up trouble, I should hope your family takes that into account. On the other hand, if you're miffed at him for telling on you, well....that's a whole 'nother can of worms.