Countrywide and Goldman Sachs have both agreed to record settlements this week for their involvement in the mortgage crisis. The settlements, both of which are over $500 million, are just the tip of the iceberg as far as legal woes for both companies.

Countrywide Financial Corp., the former mortgage giant, was purchased two years ago by Bank of America.  In what is being described as the largest payout so far from the mortgage meltdown, Countrywide has settled several class-action shareholder lawsuits for the sum of 600 million. The suits were initiated against Countrywide Financial Corp. claiming that the mortgage lender concealed mounting risks from shareholders as it loosened its standards for loans during the housing boom. By law corporations owe a fiduciary duty to shareholders and are bound by numerous disclosure requirements. Failure to make adequate, timely disclosures can expose corporations and executives to the risk of litigation. In addition to Countrywide, former CEO Angele Mozilo, former President David Sambol, for CFO Eric Sieracki and former board members were named in the litigation. As part of the settlement defendants admitted no wrongdoing. According to the LA Times however, the company is being investigated by the Securities and Exchange Commission (SEC), which filed a lawsuit accusing Mozilo, Sambol and Sieracki of misleading investors. The company and Mozilo are also under criminal investigation by the Justice Department and the attorneys general of California. Other states have also sued on behalf of borrowers.

Goldman Sachs is also settling charges of misleading investors. In addition to the $550 million settlement agreed to with the SEC, Goldman Sachs must reform its business practices. Unlike Countrywide however, Goldman Sachs acknowledged that its marketing materials contained incomplete information.