The negative reputational fallout from Westpac's anti-money laundering scandal appears to have done little to dampen the appetite of retail shareholders for the company's scrip.A capital raising announced before Austrac lobbed its bombshell civil claim against the bank on 20 November has closed heavily over-subscribed.Westpac had sought to raise A$500 million from the issue of new shares but the sharp fall in the company's market value over the last three weeks appears to have induced buying interest from small investors.The bank revealed last night that it had accepted applications for almost 32 million new shares worth $770 million through the placement at a discounted price of $24.20.Given the heightened litigation risk created by the scandal there was concern that the placement could unravel in the face of the public backlash against the company.Westpac directors amended the terms of the offer in late November to give existing shareholders who applied for more shares before the Austrac legal action was announced an option to cancel their subscriptions.However, the bank revealed last night only 3400 shareholders withdrew requests. The value of the cancelled subscriptions was $68 million.Retail shareholders might count themselves lucky because institutional investors who participated in a $2 billion placement on 4 November paid an average price of $25.32 for their allocations.