SharePoint does not allow Site Members with Contribute rights to upload a flash file
Users must have Add and Customize Pages permissions to upload flash (swf) files in SharePoint Document Libraries.
If these permissions are missing, users will get an 'Access Denied' error message after uploading files.
An extract from techgrrl.wordpress.com - "swf files are considered web content, and therefore, must be uploaded by Designers"
- Take care while granting permissions.