The worrisome security flaw has been reported by respectable 9to5Mac site. You can call it a software bug, or you can call it a special feature. In any case, you should be aware on that, as it may cause you some unpleasant surprise if some notes, saved on your tablet, will get to somebody, they were not intended for.
And now watch the video:
As you can see in our video above, a Smart Cover can essentially unlock an iPad 2. The person who unlocks your iPad 2 will not have complete access to your iPad, but will be able to gain entry to whatever you locked your iPad 2 on. If your iPad 2 went to sleep in Mail, Safari, Messages, Contacts, or Maps, you can imagine the sorts of personal information that can be viewed on your iPad. If you left your iPad 2 on its home screen, the person can view which applications you have on your device, control media from the multitasking bar, but not much else.
How to re-create it:
1) Lock a password protected iPad 2
2) Hold down power button until iPad 2 reaches turn off slider
3) Close Smart Cover
4) Open Smart Cover
5) Click cancel on the bottom of the screen
Temporary solution is after the break: You can temporarily fix this bug by disabling Smart Cover unlocking in the iPad 2 settings menu under the General tab.