9to5Mac has pointed out a flaw in the locking feature of the iPad 2. Essentially, a malicious person could circumvent the passcode locking mechanism by holding down the power button while closing and then opening the smart cover and then swiping the cancel button. This has been confirmed for devices running the new iOS 5 but may affect earlier versions as well.
This is particularly concerning to enterprises that rely on the use of a passcode to protect and encrypt corporate data on iOS devices. Physical access to a lost device would be all that is needed to access data protected in this way. This kind of vulnerability highlights the usefulness of Mobile Device Management software, which allows devices that have been lost to be remotely wiped of corporate data.
For now, users can mitigate their vulnerability by following some advice from lifehacker. To fix this bug:
…go to Settings, then General Settings and switch the “iPad Cover Lock/Unlock” button to Off (http://lifehacker.com/5852064/how-to-prevent-someone-from-breaking-into-your-ipad-2-with-a-smart-cover)