In October we broke the news that anyone with an iPad 2 Smart Cover (or a magnet) could essentially break into any passcode protected iPad 2. With the release of iOS 5.0.1 beta, weve discovered that one of the new security fixes is a fix for this Smart Cover bug. It appears that Apple has fixed the issue by not allowing the iPad 2 to go to sleep by way of the Smart Cover closing while on the power off menu. The person who unlocks your iPad 2 will not have complete access to your iPad, but will be able to gain entrance to whatever you locked your iPad on.”]
Source: https://9to5mac.com/2011/11/02/apple-fixes-ipad-2-smart-cover-passcode-security-flaw-with-ios-5-0-1/