• The SEC admitted last night that it failed to follow up on repeated warnings over the years to investigate Bernie Madoff's firm and says it plans to conduct an internal investigation; it also is looking into the relationship between Eric Swanson, a former lawyer at the agency, and Shana Madoff, a niece of Bernie, who later got married. [WSJ, NYT, ABC]
• A look at Walter M. Noel, the founder of the Fairfax Greenwich Group and the middle-man who handed over $7.5 billion to Madoff's firm. [NYT]
• More on Bernie's lifestyle, including his fondness for manicures, steak dinners at the Palm, and trips aboard his boat named Bull. [Bloomberg]
• Morgan Stanley reported a fourth quarter loss of $2.29 billion. [WSJ, CNN]
• To cut costs, Citigroup has announced that it plans to combine its corporate and investment banking businesses. [DB, Dealbreaker]