Last week, for instance, brought a fresh spate of news that suggest more people are treating Bitcoin as a serious form of money rather than a science fiction experiment. Here’s a roundup (if you want to meet people backing Bitcoin, come to our free meetup in San Jose on May 16):

Bitcoin is becoming more liquid

Gift card site Gyft has started accepting Bitcoin as payment. The significance here is that average consumers now have a forum to use their Bitcoins on a wide variety of familiar consumer brands. As Techcrunch noted, other merchants’ Bitcoin announcements (like that San Francisco cupcake shop) are largely marketing gimmicks; the Gyft news creates a real source of practical liquidity.

This development also coincides with the arrival of mini-machines that convert cash to Bitcoins and the first ATM for the currency in San Diego.

Real investors are starting to take Bitcoin seriously

Last month’s collapse, which saw Bitcoin fall from $266 to $105 in a single day, rattled speculators and undermined faith in the currency’s viability.

But that hasn’t deterred investors — including big and respected ones like Andreessen Horowitz — from putting more money into new BitCoin ventures. This week, the WSJ reported that Fred Wilson’s Union Square Ventures is investing $5 million in Coinbase, a service that provides an online wallet and easy conversion between BitCoin and traditional currencies.

Bitcoin is getting easier to understand

BitCoin discussions were once the province of quants, libertarians and cyber-geeks. Now, people are explaining how the currency is made and how it works in easy-to-understand stories. Last week, for instance, Forbes reporter Kash Hill kept a day to day diary of how she lived on BitCoin (albeit with difficulty) in San Francisco for a week.

Meanwhile, Wired’s Robert Macmillan offers a cogent account (including a video) of how his office now has a Bitcoin machine quietly mining away while using less power than the coffee maker.  (For an excellent general primer on BitCoin, see my colleague David Meyer’s “Yes, you should care about Bitcoin, and here’s why” from last month).

The government wants a piece of Bitcoin

Despite its newfound respectability, Bitcoin is still catnip for criminals, hackers and market manipulators. This notoriety led the financial crimes division of the Treasury Department to issue guidelines about Bitcoin and money laundering.

Now, Commissioner Bart Chilton of the CFTC — the agency that regulates futures contracts  – says he’s thinking of regulating BitCoin. Chilton cited the currency’s volatility and  said the government should make sure it’s not a “house of cards.”

Regulation will be tricky, however. As I explained last week, Bitcoin’s status as a currency, not a security, means it’s beyond the purview of the SEC. And while the CFTC might regulate some types of Bitcoin transactions, its overall power is limited.

“Only derivatives. We can regulate any Bitcoin future, option or swaps. I’ve not said we could regulate the actual currency–although for all I know some might have reported such. The currency could be regulated by Treasury or the Fed,” Chilton said in response to an email query.

Meet the engineers and entrepreneurs behind Bitcoin

On Thursday, May 16, GigaOM is hosting experts — including CEOs who use Bitcoin everyday as well as engineers from Facebook and Google — to explain where Bitcoin is going next. The meet-up, which costs exactly zero Bitcoins thanks to our friends at Ribbit Capital, is taking place at the San Jose Tech Museum from 6 to 9 — with time for cocktails and networking.

The new feature, which Bloomberg announced on Tuesday, comes after the Securities and Exchange Commission updated its disclosure rules to say that public companies can now reveal important news on social media platforms like Twitter and Facebook.

For practical purposes, Bloomberg’s decision means traders will not have to monitor a separate screen to watch for companies or executives that announce news on Twitter. While most market-moving news still arrives by way of traditional news wire agencies or official websites, social media sites are becoming an increasingly important tool for distributing such information.

The SEC’s rule to allow social media disclosures comes after an investigation into Netflix CEO Reed Hastings’ decision to share relevant corporate information through a Facebook post.

Under the new rule, public companies that want to use social media platforms for market-moving news must first tell investors that they are doing so.

The Securities and Exchange Commission responded by telling Netflix and its CEO that they are in hot water for violating rules about corporate disclosure. The company said this week that it has received a Wells Notice, meaning Netflix and Hasting are under investigation by the SEC.

So what exactly did Netflix and Hastings do to trigger a federal securities probe? The answer is that they used a Facebook page with more than 200,000 fans to share the news instead of a more traditional method like a press release. In theory, this means that they didn’t give everyone a fair chance to react to a “material event” that affected the share price.

This is silly, of course. As Mike Isaac of All Things D notes, if you want to spread news then the world’s largest social network is a pretty good way to do so. And given the viral nature of the internet, the news will spread far beyond Facebook almost instantly. This should easily meet the legal requirement that companies use a well-read news or wire service or “any other non-exclusionary method.”

What has happened here is that the SEC has gotten caught up in technicalities rather than looking at why we have the rule in the first place. That rule, by the way, is a good one — every investor, and not just insiders, deserve to know when something important happens at a public company. And, in this case, Netflix and Hastings respected the spirit of the rule.

In the bigger picture, the Netflix incident shows how regulators can fail to grasp the massive changes in our communications and transportation infrastructure. Just as mid-20th century taxi laws are ill-suited for the age of car services like Uber, it doesn’t make sense for the SEC to pretend we’re still in the age of the fax machine. As Bloomberg notes, companies like Tesla are using everything from Twitter to company blogs to communicate with investors. The SEC will only lose credibility if it keeps trying to stuff this digital genie back in the bottle.

(Image by DM7 via Shutterstock)

In documents filed Friday in Seattle, investors led by a Rhode Island pension fund proposed a $6 million settlement to compensate them for losses they incurred in January, 2011.

At that time, Coinstar’s stock price tanked in response to the company’s revelation that major studios had forced Redbox to delay new releases by 28 days. The studios imposed the delay as part of a “windowing” strategy to ensure Redbox’s $1 rentals didn’t undercut store sales.

The delay hurt Redbox’s business strategy and, by extension, Coinstar, which counted on Redbox for 80% of its revenue.

In a series of lawsuits filed in early 2011, investors claimed Coinstar and its executives committed securities fraud when when they failed to disclose the delay and instead issued artificially rosy earnings predictions.

The proposed settlement claims that $6 million is a reasonable recovery of the $96 million that investors allegedly lost when Coinstar’s share price fell.

The settlement, which came after months of negotiations, must be approved by the court. If a judge gives the go-ahead, the money will then by divided proportionally among investors who file claims. Lawyers typically take 25 percent of any class action award.

Coinstar’s video rival Netflix (NSDQ: NFLX) is embroiled in a similar lawsuit. Last month, investors sued Netflix and its executives on the grounds that they failed to disclose that the company would be forced to pay significantly more for its content.

Coinstar did not immediately return a request for comment. The company’s share price closed today at $58.22 which is approaching the $66 high it reached in fall of 2010.

Proposed Coinstar Settlement

The guidelines, issued in October, came after Senators complained that companies often fail to disclose losses they incur at the hands of hackers. American firms have been victimized by such attacks for years, including a notorious 2010 incident in which Chinese hackers stole source code from Google (NSDQ: GOOG), Adobe (NSDQ: ADBE) and at least 20 other companies.

The SEC document is supposed to help companies determine when they must disclose “cyber incidents” to investors through routine public filings or special Form 8-K notices. While guidelines aren’t the same as laws, they shape compliance officers’ perceptions of what they have to report, and thus will shape information public companies include in their filings.

The agency notes that it is mindful that disclosures could provide a “roadmap” for intruders who may be snooping around for things like security manuals and blueprints, but the SEC nevertheless asks for very specific information. Here, for example, is what a firm should disclose if an attacker steals its intellectual property:

“the registrant should describe the property that was stolen and the effect of the attack on its results of operations, liquidity, and financial condition..”

Roland Trope, a lawyer and professor at West Point, says such rules are well-intentioned but misguided. Trope worries that the disclosures will be of interest not only to investors but also to hackers wishing to calibrate future attacks. He says the SEC filings could be akin to damage reports used by a military after a bombing raid.

Trope and fellow security expert Tom Smedinghoff shared these concerns in a letter this month to the ABA‘s subcommittee on cybersecurity, saying that disclosures “would undermine a company’s cybersecurity by providing precisely the sensitive cyber defense information that an adversary seeks in order to plan and execute a cyberattack on the enterprise.”

For now, it is unclear how many companies will disclose hacking attacks or what they will report. The Financial Times, however, has noted that executives may feel impelled to report on incidents ahead of whistle blowers who can receive large awards for tipping the SEC about when a company is not complying with the law.

In an interview with paidContent, Trope said that for now company lawyers will likely use vague language in an effort to avoid spilling too much. More broadly, Trope thinks the SEC is right to push for an end to the silence surrounding cyber-attacks but that it should instead focus on teaching companies how to nail down their high priority assets. This includes not just intellectual property but also internal manuals on cyber security — which too often are placed online where they can be siphoned by an intruder.

Instead, Trope advocates a form of security known to techies as “air gapping” and which, to the rest of us, sounds like something out of James Bond. An “air-gapped” security system involves placing sensitive information on a computer that is not connected to the internet at all. The computer should in turn be placed under guard in a secure room and only available to a handful of executives, who should also be monitored to ensure they do not download anything.

This form of old school security may sound heavy handed but it has been used for years by the nuclear industry and, says Trope, is infinitely preferable to any type of cloud-based system. “The cloud is the most insecure place on earth to put secure company information. No nuclear power company would put its cyber defense information in the public cloud.”

The views of Mr. Trope as expressed in this article are his own and have not been approved by and should not be attributed to the U.S. Military Academy, the Department of Defense, or the U.S. Government.

SEC officials are worried that Facebook might be trying to do an end-run on a rule that private companies can’t have more than 500 investors without having to disclose their finances. The special investment vehicle that Goldman is creating will allow some of its high-end clients to pool together and be treated as one of Facebook’s investors. The Journal says that, for now, the inquiry — which possibly could lead to a rule change — is at an “early stage.”

Even with little information available to them, investor response to the Facebook offering has been so strong that Goldman Sachs plans to stop soliciting more bids tomorrow, according to the WSJ. “It’s a blowout,” said one Goldman employee.

Gannett has told its papers that cover the SEC not to sign and an AP lawyer confirmed to E&P that it will not sign up for credentials with the limits in place. Conversations between news organizations and the SEC are ongoing, including a call scheduled for this afternoon. We’ll update as warranted. No immediate results from today’s call; another is scheduled for tomorrow.

The policy was coupled with an extraordinary effort to limit social media use on the part of fans, trying to turn the act of getting a ticket in a contract not to Twitter during games or conduct other social media activity that the conference fears will damage its broadcast rights. The SEC revised the policy after an initial public outcry but media organizations aren’t satisfied. Three organizations — the AP Sports Editors, AP Managing Editors and ASNE — protested by letter (pdf) to SEC Commissioner Mike Slive last week.

Among the limits and requirements imposed by the SEC in concert with its new online media partner XOS Digital:

– Still photos online would be limited to regular “print” news coverage and “shall not otherwise be posted, placed, or distributed on the Internet.” That would seem to exclude slide shows, galleries and archives.

– The SEC and its member schools would get a non-exclusive license to use news photos without extra charge.

– News orgs would be prohibited from blogging “real-time description” in game.

– Publishing video and audio highlights from SEC games online is prohibited for online newspapers but allowed in same cases for TV stations with websites, plus there are time limits on pre and post-game video and audio use.

U.S. District Judge Sidney A. Fitzwater granted Cuban’s motion for dismissal, explaining in the 35-page ruling that even if everything the SEC alleged is true, it had failed to prove Cuban “undertook a duty, expressly or implicitly, not to trade on or otherwise use material, nonpublic information” about Mamma.com’s plans. The SEC’s allegations center on information on he was given about Mamma.com’s plans for a stock offering that would dilute equity. Cuban sold 600,000 shares in the company before the news went public, avoiding, the SEC claimed, losses of more than $750,000. (We detailed the charges when the suit was filed.)

Cuban fought the charges loudly, using his Blog Maverick and other avenues to dispute the claims that he was an insider in that situation; he also charged an SEC employee with using the case to pursue a personal vendetta.

Disclosure: We sometimes republish Cuban’s Blog Maverick posts here with his permission.

Mark Cuban –

The SEC settlement calls for civil penalties of $500,000 for Kavelman; $425,000 for Loberto; $350,000 for Balsillie; and $150,000 for Lazaridis. They also must pay back proceeds from the backdating, already covered by payments to RIM totaling just over $843,000; of that, Balsillie paid $334,250 and Lazarides, $328,300. Kavelman and Loberto are banned from serving as officers or directors of any company with securities registered with the SEC or required to file with the SEC, and from practicing before the SEC as accountants for five years.

Release | Settlement | Complaint (pdf)

The complaint also alleges:

– that Kavelman and Loberto took steps to hide the backdating from regulators, RIM’s independent auditor and outside lawyer, and that all four attended a shareholder meeting where Kavelman denied that RIM was backdating options. The 2006 meeting took place at a time when backdating issues were in the spotlight.

– the execs repriced options at substantially lower backdated prices “at times” and that Kavelman and Balsillie agreed to adjust at least one hire’s offer to show backdated prices.

– that they intentionally avoided using the lowest price on some occasions.

Full SEC complaint after the jump…

SEC Vs. RIM

How it works: Each “fact” in a financial statement gets a tag that makes the information more searchable and more readable via software. SEC: “Investors will be able to instantly find specific facts disclosed by companies and mutual funds, and compare that information with details about other companies and mutual funds to help them make investment decisions.” The SEC provides open-source software for viewers.

When it takes effect: Voluntary XBRL filing is already in effect with 100-plus companies and some two dozen mutual funds taking part so far. The top 500 public companies have until the first earnings report for a quarter ending on or after June 15. That means Q209 for most of the largest companies. Other U.S. companies filing according to generally accepted accounting principles (GAAP) will be phased in over the next two years with December 2011 as the endpoint. Companies do not have to wait for the mandatory start. Mutual funds will be required to use data tags in 2011 and will have to post the data online if they have websites.

Video of the SEC’s open meeting