Christopher Niebel and Gary McNeish made hundreds of thousands of pounds from Tetrus Telecoms by sending out the illegal messages offering compensation for accidents or payouts over payment protection insurance and then selling on the details of those who replied.
It is the first time Christopher Graham, the Information Commissioner, has used the power since it was approved earlier this year and three other firms are in his sights as he targets the illegal marketing industry.
He said: "The public have told us that they are distressed and annoyed by the constant bombardment of illegal texts and calls and we are currently cracking down on the companies responsible, using the full force of the law."
Tetrus, set up in December 2009, was using unregistered pay-as-you-go sim cards to send out up to 840,000 illegal texts a day before selling the information on to claims management firms and generating up to £8,000 a day, investigators found.
One of the text messages read: "CLAIM TODAY you may be entitled to £3,500 for the accident you had. To claim free, reply CLAIM to this message. To opt out text STOP. Thank you".
Another read: "URGENT! If you took out a Bank Loan prior to 2007 then you are almost certainly entitled to £2,300 in compensation. To claim reply 'YES'"
Mr Graham said Niebel and McNeish "made a substantial profit from the sale of personal information".
"They knew they were breaking the law and the trail of evidence uncovered by my office highlights the scale of their operations," he said.
An 18-month investigation found Tetrus was sending large volumes of unsolicited text messages from officers in Stockport and Birmingham, without the consent of the recipient and without identifying the sender.
Niebel, whose Manchester home was raided in February, was ordered to pay £300,000 and McNeish, who lives in Thailand, was fined £140,000 as it appeared he took less out of the business, a spokesman for the Information Commissioner's Office (ICO) said.
The pair are also facing prosecution for failing to notify the ICO that Tetrus Telecoms was processing personal information and face a fine of up to £5,000 if convicted in the magistrates court or a potentially unlimited fine in the crown court.
