This movement is going to POP all the Short Interest
Auditor resignations are not always red-flags. In the post-ENRON/WCOM world it seems like they are, but if you are a student of financial history, you will find that companies in the past as fired their auditors, and auditors have resigned based on things as rediulous as professionalism and price. Sarbox changed a lot from the auditors perspective, and I think you make some valid arguements, but I can't see where the red flag is.
By the way, I don't think P/E is a good metric to use for this company. Insurance companies trade at sub 10 multiples becuase their earnings are a function of underwriting standards and interst rates. I just like the yield and the danger that xists when you are short a stock that has potential to crush you with a div hike and an auditor nameing. Maybe the shorts know something that we don't. Maybe they are short, but have some protection through options, don't know, I am long.