Madoff fooled Simons for 10 years. He told Stony Brook to invest in Madoff in 1991. In 2003, Renaissance decided that Madoff was a fraud and pulled out. Simons told Stony Brook to pull out, but they left in 50%.

Many people investing with Madoff thought he was a fraud, just that he was defrauding someone else (eg, frontrunning his brokerage clients). It's not clear that they pulled out because they realized he was a fraud or because they worried that Spitzer would investigate him. Their suspicions triggered a failed investigation of Madoff not because they complained to the SEC, but because when the SEC audited RenTech, it found emails discussing Madoff.

Oddly, the wikipedia article seems to be based on the first WSJ article I linked, not the Bloomberg one it cites.