A free riding violation occurs when a customer purchases securities and then pays for the cost of those securities by selling the very same securities.
For example, you have $500 cash in your account and place an order to buy $1,000 of XYZ with a representative on a good faith agreement to deposit another $500 for the securities by settlement. You do not make a deposit before settlement and instead sell the stock for $1,200. This is free riding because you never made a deposit for the purchase price of the securities, and sold them on the assumption that the proceeds would cover the cost.
We are required to place your account on a 90 Day Restriction if you incur a free-riding violation. Under this restriction, you can still purchase securities, but you have to fully pay for the cost of those securities on the trade date.
For more information, check out the SEC's website on Freeriding.