According to CNBC "Fast Money Halftime Report" trader Jon Najarian, thousands of Kate Spade's call options were purchased at 12:23 p.m. ET Wednesday — roughly 10 minutes before headlines of a potential sale hit. A call gives the buyer an option to purchase assets at an already agreed-upon price on or before a certain date.
When options activity spikes ahead of an announcement, it can indicate that someone had inside information. Kate Spade has been under pressure to sell its business, after activist firm Caerus Investors suggested the company do so last month.
"We are deeply concerned about the precipitous decline in the share price of Kate Spade over the last two and a half years brought about by management's inability to meet their own stated goals," Caerus said in its letter at that time.
The SEC declined to comment as to whether it would investigate Wednesday's trading activity.
Earlier, a spokeswoman for Kate Spade declined to comment on the potential sale, telling CNBC that "as a company policy, we do not comment on industry rumors or speculation." She did not immediately respond to a second request for comment regarding the trading activity.