Is Tesla Motors Inc (TSLA) CEO Elon Musk Violating SEC Rules?Author: Viraj ShahLast Updated: April 3, 2015 There is no executive who uses Twitter Inc (NYSE:TWTR) more often than Tesla Motors Inc (NASDAQ:TSLA) CEO, Elon Musk, even on disseminating highly sensitive news that many a times would call for an official channel. Musk’s wave of tweets essentially arouses questions on how often social media can be used to divulge highly sensitive information. It may be cheap, fast and tailored to reach people on a blink of an eye but is it the most appropriate way to disseminate news for the broader market?Early in the week Twitter was a buzz of talk after Musk tweeted about a major Tesla product line that is not a car. The impact of the tweet was evident as Tesla Motors Inc (NASDAQ:TSLA) shares jumped instantly, boosting the company’s market value by more than $1 billion. The news marked a turnaround for a stock that has been on a downward spiral since clocking highs of $300 a share.Is Twitter proper disclosure?Unlike Musk, many corporate executives and entrepreneurs don’t announce corporate news using tweets. Most of these executives only use social networks to react to general news and post comments regarding their companies, some are not even active like Warren Buffett CEO of Berkshire Hathaway. Buffett has to his name 6-tweets on over one million followers, Apple Inc. (NASDAQ:AAPL) CEO, Tim Cook, on the other hand, has 150 tweets and more than one million followersTesla Motors Inc (NASDAQ:TSLA) on its defense on the usage of Twitter to disseminate sensitive information maintains it ‘carefully’ follows SEC rules while remaining focused on long-term results and delighting Model S owners. The SEC forbids selective disclosure of corporate news having approved the use of social media as one of the arsenals of disclosures on meeting certain conditions.Is Tesla selecting its audience?Regardless of medium of use the SEC prohibits the disclosure of information just to certain groups without disclosing it to everyone, be it by accident or design. The use of tweets by Tesla Motors Inc (NASDAQ:TSLA) infringes on this principle as tweets alone reach limited audience while having the impact of providing market moving effect. All market moving tweets in this case should always be preceded by disclosures that reach the broader world.The SEC has already ruled that companies can use social media to disseminate news as long as investors are alerted prior, which medium will be used to disseminate such information.