The Financial Conduct Authority was first alerted about Neil Woodford's investment strategy in 2015, according to reports from the Financial Times.
But despite these warnings, the FT has reported the regulator did not intervene for almost another two years.
Woodford's flagship equity income fund was suspended in 2019 after he was left scrambling to meet a wave of redemptions from the increasingly illiquid fund.
The suspension meant hundreds of thousands of investors had their savings trapped in the fund, which was eventually closed down.
Last month Woodford announced he would be launching a new firm - Woodford Capital Partners - which will advise companies on their investments. It will not manage money for retail or advised clients.
The FT has reported concerns were raised about Woodford's investment strategy when two of Woodford Investment Management's founding partners - chief operating officer Nick Hamilton and chief legal and compliance officer Gray Smith - resigned after falling out with Woodford.
According to the FT, due to their seniority Smith and Hamilton were asked to sit down with the FCA for exit interviews in January 2015 but the regulator did not act on the information it was given.
It is understood Hamilton and Smith were particularly concerned with the amount of money being invested in unlisted - and therefore less liquid - companies.
Former FCA chief executive Andrew Bailey had previously told Parliament that the FCA first intervened on WIM was at the end of 2016 when it found a conflict of interest in the business’s valuation process.
Commenting to the FT, the FCA said: "Where we receive information relating to concerns about firms or individuals we follow up and take action where appropriate. But we do not conduct our supervision of firms or individuals in public."
Smith and Hamilton declined to comment, while a spokesman for Woodford said: "It is true that the FCA did not approach us after the interviews, and I am sure would have approached us had there been any concerns raised from the interviews."