James T Kwok

Anchal Gupta, Gleb Pappyshev, James T Kwok

"Double, double toil and trouble; Fire burn and cauldron bubble." As Shakespeare's witches foretold chaos through cryptic prophecies, modern capital markets grapple with systemic risks concealed by opaque AI systems. According to IMF, the August 5, 2024, plunge in Japanese and U.S. equities can be linked to algorithmic trading yet ab-sent from existing AI incidents database exemplifies this transparency crisis. Current AI incident databases, reliant on crowdsourcing or news scraping, systematically over-look capital market anomalies, particularly in algorithmic and high-frequency trading. We address this critical gap by proposing a regulatory-grade global database that elegantly synthesises post-trade reporting frameworks with proven incident documentation models from healthcare and aviation. Our framework's temporal data omission technique masking timestamps while preserving percent-age-based metrics enables sophisticated cross-jurisdictional analysis of emerging risks while safeguarding confidential business information. Synthetic data validation (modelled after real life published incidents , sentiments, data) reveals compelling pat-terns: systemic risks transcending geographical boundaries, market manipulation clusters distinctly identifiable via K-means algorithms, and AI system typology exerting significantly greater influence on trading behaviour than geographical location, This tripartite solution empowers regulators with unprecedented cross-jurisdictional oversight, financial institutions with seamless compliance integration, and investors with critical visibility into previously obscured AI-driven vulnerabilities. We call for immediate action to strengthen risk management and foster resilience in AI-driven financial markets against the volatile "cauldron" of AI-driven systemic risks., promoting global financial stability through enhanced transparency and coordinated oversight.

Quanming Yao, James T Kwok, Bo Han

Low-rank tensor completion problem aims to recover a tensor from limited observations, which has many real-world applications. Due to the easy optimization, the convex overlapping nuclear norm has been popularly used for tensor completion. However, it over-penalizes top singular values and lead to biased estimations. In this paper, we propose to use the nonconvex regularizer, which can less penalize large singular values, instead of the convex one for tensor completion. However, as the new regularizer is nonconvex and overlapped with each other, existing algorithms are either too slow or suffer from the huge memory cost. To address these issues, we develop an efficient and scalable algorithm, which is based on the proximal average (PA) algorithm, for real-world problems. Compared with the direct usage of PA algorithm, the proposed algorithm runs orders faster and needs orders less space. We further speed up the proposed algorithm with the acceleration technique, and show the convergence to critical points is still guaranteed. Experimental comparisons of the proposed approach are made with various other tensor completion approaches. Empirical results show that the proposed algorithm is very fast and can produce much better recovery performance.