The Securities Act of 1933 forbids frauds against brokers as well as investors, the Supreme Court ruled 8 to 0 yesterday.

Neither the court nor Congree "has ever suggested that investor protection was the sole purpose" of the law, Justice William J. Brennan Jr. wrote.

"While investor protection was a constant preoccupation of the legislators, the record is also replete with references to the desire to protect ethnical business-men," Brenan said in the opinion for the court.

The decision reversed a ruling in a case involving Neil T. Naftalin, a Minneapolis registered broker-dealer and professional investor who in 1969 engaged in a $1 million "short selling" scheme that worked like this:

Picking five stocks that he assumed had peaked in price and were entering into a period of market decline, Naftalin placed orders with five brokers to sell shares of the stocks.

In doing this, Naftalin was gambling that by the time he had to deliver to the brokers the shares they had sold for him, he could buy other shares from other brokers at substantially lower prices.

Instead of the pri Thus, Naftalin couldn't buy the shares he needed to "cover" the sales made for him, and the five brokers, unable to deliver the shares they innocently had "sold" to other investors, had to buy replacement shares on the open market - at higher prices totaling more than $1 million - to make good.

A federal court convicted Naftalin of eight violations of the securities law's Section 17 (a), which makes it an offense for any person to use any any device to defraud "in" the offer or sale of any securities. He didn't deny that he defrauded the brokers; he contended, however, that the section applies solely to frauds aimed at investors.

The 8th U.S. Circuit Court of Appeals agreed with Naftalin but was reversed yesterday. The law "does not require that the victim of the fraud be an investor - only that the fraud occur 'in' an offer or sale," Justice Brennan wrote.

Justice Lewis F. Powell Jr. did not participate in the decision.