The point is that if they claim that they didn't know better, and that is to be taken at face value, then they're plainly not competent to hold their jobs.
So, if they testify that they knew - they're liable.
If they testify that they didn't know, and SEC can prove otherwise - same as above + perjury.
If they testify that they didn't know, and SEC cannot prove otherwise, then at least it is treated as them confirming their incompetence. So if they get, say, a bonus later, or a "golden parachute" for outstanding service on retirement, that is treated as evidence contradicting their claims.
So, if they testify that they knew - they're liable.
If they testify that they didn't know, and SEC can prove otherwise - same as above + perjury.
If they testify that they didn't know, and SEC cannot prove otherwise, then at least it is treated as them confirming their incompetence. So if they get, say, a bonus later, or a "golden parachute" for outstanding service on retirement, that is treated as evidence contradicting their claims.