A senior Morgan Stanley investment banker was placed on leave after police accused him of hurling racial slurs at a taxi driver of Middle Eastern descent and stabbing him in the hand with a pen knife over a fare dispute.

William Bryan Jennings, co-head of North American fixed-income capital markets at the Wall Street bank, was arrested near his home in Darien, Connecticut, on Wednesday and charged with second-degree assault, sixth-degree larceny for not paying the fare and intimidation by bias or bigotry, Detective Mark Cappelli told Reuters.

Jennings was released after posting $9,500 bail and is scheduled to appear in Superior Court in Stamford, Connecticut, on March 9. Pen Pendleton, a spokesman for Morgan Stanley, said Jennings has been placed on leave.

Eugene Riccio, a lawyer for the 47-year-old banker, denied the charges and said Jennings stabbed the cab driver because he was afraid for his safety.

He categorically denies that he made any racially offensive statements to the cab driver, said Riccio.

Jennings, who started his career at Morgan Stanley in 1993 as an associate in the investment banking division, held the title of managing director at the time of the taxi cab encounter. He was one of the most senior executives in the bank's bond-trading business, which Morgan Stanley has been trying hard to bolster over the past few years.

The incident happened in December, when Jennings took a late-night cab ride of about 45 miles from Manhattan to his $2.3 million home at 39 Knollwood Lane.

Upon reaching the destination, the driver and Jennings, whom the driver said was intoxicated, argued about the fare.

The police said the two had agreed on a fare of $204 at the outset, but when the driver requested payment, Jennings refused. His lawyer, however, says the driver asked for nearly $300, which Jennings considered excessive.

There are differing versions of what happened next as well. According to the police, the driver began driving around the city with Jennings still in the car, looking for a police officer to resolve the dispute.

However, Riccio said the driver was not looking for police, but speeding down the road, door open, disregarding traffic signals and threatening to bring Jennings back to Manhattan unless he paid the fare.

The driver, who lives in Queens, New York, told police that Jennings began threatening him and using racial slurs. The banker then took out a pen knife and began stabbing at the driver through an open partition, police said. When the driver tried to close the partition, Jennings stabbed his hand.

The driver then stopped the vehicle and Jennings ran home, Riccio said, about 1.5 miles from the scene. The driver called police to report the incident around midnight on December 22.

The driver received immediate medical attention in Darien and later went to a hospital where the lacerations required six stitches, Cappelli said.

Police had been looking for Jennings since the incident, but because he did not contact them and there was limited information about his identity, detectives were unable to immediately find him, Cappelli said.

At no point did Mr. Jennings attempt to contact the Darien Police Department during the incident, police said in a statement. Mr. Jennings did contact the Darien Police approximately two weeks later.

The banker turned himself in at the Darien police station this week, after authorities had issued a warrant for Jennings' arrest, Cappelli said.

Jennings did not immediately report the incident because he was afraid for the safety of his family and did not want his personal information in the press, Riccio said.

(Reporting By Lauren Tara LaCapra; Editing by Tim Dobbyn and Paritosh Bansal)

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