"is plotted with official exchange timestamps" suggests that they are doing it wrong. You can't compare apples to oranges without knowing how the exchanges are timed.
For those who do latency tests, this is a very important point: you should always be on the lookout for what clock is recording the 'start' and the 'stop' and to be sure to consider clock skew.
To get a sense for how far timestamps can diverge, OATS -- the reports that are sent to the Financial Industry Regulatory Authority -- require that machines be synced to within 3 seconds of NIST (which is nearly 7.5x longer than the 400ms quoted).
When you measure latency, you always have to be careful about clock issues at the point where you measure the start and the point where you measure the end. This is old-hat for sysadmins and others who deal with these types of issues. This is why round-trip latency numbers are easier to work with: both the start and the end times are taken on the same clock.
It's clear, given nanex's responses, that they depended on someone else to give the timestamps. Before concluding that someone had inside information ahead of time, they should check their processes. It's like someone claiming they built a perpetual energy machine because they confused power with energy (i want to say it was paul newman but the name escapes me -- this actually happened)
Could be completely explained by someone having the right relay for this data in the right place at the right time (which would have been the result of a considerable outlay of resources and compensation to establish, thus boosting economic output long ahead of any potential killing(tm) made here).
And I can't see any particularly efficient way to level the playing field with a government that barely understands facebook and fair use. Just try to explain microsecond latency to them, go ahead, really, should be even more fun than a series of tubes(tm).
Not disagreeing with you, but wanted to mention that I recently learned that quartz clocks typically drift half a second PER DAY, which was shocking to me. This seems to imply that computers are subject to the same drift unless they are syncing via NTP many times a day.
