Flash relies on standard browser and HTTP security features. If you want to support secure passwords in Flash, you need to establish your password authentication with a request to a web server. Essentially, Flash offers the same security that is available with standard HTML. You should follow the same rules that you follow when building secure HTML web sites.
For a password, request a password from the user and then submit it to a sever by using a Load Variables statement, using the Send using POST parameter, via an HTTPS: URL. The web server could then verify whether the password is valid. This way, the password would never be available in the SWF file.
For more information, see Obtaining variables from a remote file.