The U.S. Securities and Exchange Commission failed to follow up on significant warnings concerning Ponzi scheme operator Bernard Madoff, a case audit said.

SEC Inspector General David Kotz's report, released Wednesday, said there were no personal tie-ins between Madoff and SEC personal that prompted the SEC to fail in following up on numerous warnings, some of which were available 16 years prior to Madoff's arrest and confession last December.

"The (Office of Inspector General) did not find that former SEC Assistant Director Eric Swanson's romantic relationship with Bernard Madoff's niece, Shana Madoff, influenced the conduct of the SEC," an executive summary of the report said.

However, "the SEC received more than ample information ... including six substantive complaints that raised significant red flags concerning Madoff's hedge fund," the report said.

While warned directly, the SEC also knew of two articles published in 2001 that questioned Madoff's operations, the report said.

The investigations that ensued were lackluster, the report said, using "inexperienced teams," and ending "with numerous unresolved questions." One early tip-off resulted in "a missed opportunity to uncover Madoff's Ponzi scheme 16 years before Madoff confessed."

In short, "the SEC never took the necessary, but basic, steps," the report said.