Social network analysis presupposes that observed social behavior is influenced by an unobserved network. Traditional approaches to inferring the latent network use pairwise descriptive statistics that rely on a variety of measures of co-occurrence. While these techniques have proven useful in a wide range of applications, the literature does not describe the generating mechanism of the observed data from the network. In a previous article, the authors presented a technique which used a finite mixture model as the connection between the unobserved network and the observed social behavior. This model assumed that each group was the result of a star graph on a subset of the population. Thus, each group was the result of a leader who selected members of the population to be in the group. They called these hub models. This approach treats the network values as parameters of a model. However, this leads to a general challenge in estimating parameters which must be addressed. For small datasets there can be far more parameters to estimate than there are observations. Under these conditions, the estimated network can be unstable. In this article, we propose a solution which penalizes the number of nodes which can exert a leadership role. We implement this as a pseudo-Expectation Maximization algorithm. We demonstrate this technique through a series of simulations which show that when the number of leaders is sparse, parameter estimation is improved. Further, we apply this technique to a dataset of animal behavior and an example of recommender systems. (C) 2016 Elsevier B.V. All rights reserved.