The U.S. Supreme Court has upheld the Securities and Exchange Commission’s jurisdiction over alleged securities fraud. In a decision, released today, the court ratified the SEC’s longstanding interpretation of federal securities law.

The court ruled that the commission has properly alleged securities fraud in its complaint against a broker who emptied a client’s investment account and used the proceeds for his own benefit. “There is no place in the securities marketplace for brokers who sell their customers’ securities in order to steal the proceeds,” says SEC chairman Harvey Pitt.

“For over 50 years, the SEC has viewed this type of misconduct as securities fraud. In addition to referring such brokers for criminal prosecution, the SEC has imposed the toughest available civil sanctions on them, including kicking them out of the securities industry for good,” says Pitt. “We are gratified that the Supreme Court, by its unanimous ruling today, endorsed the SEC’s longstanding position and enabled the SEC to continue aggressive enforcement action against brokers who abuse their clients’ trust in securities transactions.”

The Supreme Court reversed the appeals court, ruling that the commission is entitled to deference in its interpretation of the anti-fraud provisions of theSecurities Exchange Act. The Supreme Court sent the case back to the U.S. district court so it can proceed.

The case involves a broker, Charles Zandford of Maryland, which the SEC says opened a joint investment account for an elderly client and his mentally handicapped daughter. The client had intended the proceeds of the account to provide for his daughter, but without the client’s knowledge. Zandford sold the securities in the account and converted the proceeds to his personal use.