March marks the start of spring, when the natural world awakes from its slumber and focuses or growth and new beginnings. In the world of finance, March also marks a number of important beginnings (and some ends) that have left an indelible print upon the market.

Blue Skies for Investors
March was the host of two major financial overhauls in the world of finance. The first happened in 1911, when Kansas adopted the Blue Sky Laws. These state laws were meant to protect investors from worthless securities issued by unscrupulous companies and pumped by promoters. They are basic disclosure laws that require a prospectus in which the promoters (sellers/issuers) state how much interest they are getting and why. Then, the investor is left to decide whether to buy. This was one of the first attempts to protect the investing public and, would eventually be incorporated into the Securities and Exchange Commission (SEC). (For further reading check out How The Wild West Markets Were Tamed.)

Markowitz and Modern Portfolio Theory
The second overhaul occurred when Harry Markowitz published his portfolio theory in the March 1952 edition of the Journal of Finance. Markowitz's paper consisted mostly of charts and some elegant math that confirmed an old saying: "Don't put your eggs in one basket."

The idea that a diversified portfolio offered the best risk-reward trade-off was destined to change the world of investing once John Bogle got a hold of it, but the paper collected dust for many years before its true value was understood. Interestingly, Bogle would use the S&P 500 as one of the indexes that he mirrored in his fund - the S&P 500 was introduced in March, 1957.

New Beginnings
Alexander Graham Bell, the inventor of the telephone, was born on March 3, 1847. Bell's name continued on in the form of Ma Bell, until the telecommunications giant was broken up into the Baby Bells in 1984. (For more on Ma Bell's break-up, see Monopolies, Corporate Triumph And Treachery.)

March 6, 1926, marked Alan Greenspan's birth. Greenspan headed the Federal Reserve from 1986 to 2006. Greenspan faced a crash within a year of taking up the post and has caught a lot of flak for the crash that followed his exit. To be fair, he was also responsible for the Goldilocks economy that was bookended by these downturns.

March 2, 1995, also hosted a birthday of sorts. Yahoo! Was incorporated with the ticker YHOO. The company survived the internet bubble and the growing pains that followed, and is now teaming up with Microsoft to fight another internet giant, Google (NYSE:GOOG).

Spring Mischief
The beginning of spring is not all flowering and birdsong. Four different scandals were exposed in past years during this very week - all of them recent enough for investors (and tax payers) to flinch as they recall them.

On March 1, 1999, the U.S. General Accounting Office's audit found that the IRS had chronic record-keeping problems and lacked the basic control and organization necessary to fulfill its mandate. The study found $222 billion of unpaid assessments due to internal errors.

On March 2, 1995, Nicholas Leeson was finally arrested in Germany. The rogue derivatives trader lost more than $1 billion in unauthorized trades at Barings Bank, sinking the 200-hundred-year-old institution. Leeson held the world title for losses by a rogue trader until Jerome Kerviel lost $7 billion of Société Générale's money in 2008. (For further reading, see Trading's 6 Biggest Losers.)

On March 6, 2003, the NASD filed a suit against Credit Suisse First Boston banker Frank Quattrone. Quattrone and CSFB were suspected of spinning IPOs and inflating their analysts' recommendations for friendly firms. This violation of the Chinese Wall was part and parcel with the speculative bubble that grew up around the internet boom.

Seeds, Weeds and Blooms
So this week we have anniversaries for the germinal forms of the SEC and index investing, as well as the capture of the "first" rogue trader. However, next week will mark an anniversary that eclipses even modern portfolio theory. We'll see you then.